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The following is from a report from the Minnesota Office of Legislative Auditor.

Minnesota’s Ethanol Programs

Under some circumstances, ethanol has value as an octane enhancer. Ethanol can be blended with a cheaper, lower grade of gasoline and the resulting product meets higher octane specifications. We talked to representatives of the three refiners serving the Minnesota market.

One company says they do not blend ethanol with a special low-octane blend in order to get regular-grade gasoline. (Regular gasoline accounts for about 70 percent of gasoline sold.) Two refiners said they did blend lower octane gasoline with ethanol for the Twin Cities, but not the outstate market. The lower-octane gasoline costs .5 to 1.25 cents less than regular grade, but induces additional storage and handling costs.
Pure ethanol has an octane rating of 129. It is used in the IndyCar Racing League. E10 contains 3% less energy than pure gasoline. If your car runs poorly on E10, or has a mileage drop of more than 3%, now you know why.
 

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The following is from a report from the Minnesota Office of Legislative Auditor.

Minnesota’s Ethanol Programs



Pure ethanol has an octane rating of 129. It is used in the IndyCar Racing League. E10 contains 3% less energy than pure gasoline. If your car runs poorly on E10, or has a mileage drop of more than 3%, now you know why.
E10/urine has performed poorly in our 2004 Impala 3.4, 2001 PT 2.4, and 2007 Kia Spectra 2.0.

A lot of the fuel around here is now mandatorily-contaminated by E10.
I am still finding non-E10, but to mandate it in all pumps is like walking backwards on a treadmill.
 

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Don't confuse octane rating and energy content. In fact higher octane gasoline blends often contain less energy, because the chemicals used to boost the rating obviously displace some of the gasoline, and they contain less energy.

Blending lower octane gas with ethanol is not a problem, unless the overall octane rating is so low that your engine starts pulling timing.

It's not as easy as saying "E10 contains 3% less energy, so the mileage should only drop by 3%", because that only applies if the engine is designed to extract all of it. An engine optimized for E0/E5 will experience a bigger drop, simply because the compression ratio is a bit too low to get the most from E10. If you redesigned this engine with E10 in mind, you mileage would only drop by 3%.
 

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E10 has caused all of the Varnish, in the Poly tank of my boat, to dislodge and run up into my outboard's fuel filter.

Most outboard manufactures have adjusted to the use of E10, since the early 90's. But have not factured in the slime and varnish left by non Enthanol gas before E10.

The other facter, is the less than 3 month of shelf life of E10, it does not have much effect on Autos, but does on Boats, RVs, and even Generators.
 

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E10 has caused all of the Varnish, in the Poly tank of my boat, to dislodge and run up into my outboard's fuel filter.

Most outboard manufactures have adjusted to the use of E10, since the early 90's. But have not factured in the slime and varnish left by non Enthanol gas before E10.

The other facter, is the less than 3 month of shelf life of E10, it does not have much effect on Autos, but does on Boats, RVs, and even Generators.
Out of that list, its probably hitting two-strokes.
 

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Don't confuse octane rating and energy content. In fact higher octane gasoline blends often contain less energy, because the chemicals used to boost the rating obviously displace some of the gasoline, and they contain less energy.

Blending lower octane gas with ethanol is not a problem, unless the overall octane rating is so low that your engine starts pulling timing.

It's not as easy as saying "E10 contains 3% less energy, so the mileage should only drop by 3%", because that only applies if the engine is designed to extract all of it. An engine optimized for E0/E5 will experience a bigger drop, simply because the compression ratio is a bit too low to get the most from E10. If you redesigned this engine with E10 in mind, you mileage would only drop by 3%.
That 30% less energy quoted is at identical compression ratios as gas. Higher levels of ethanol are in fact capable of higher compression ratios closing that energy gap.

And the higher octane rating will cause your engine to run with less knock, allowing your engine to be more aggressive with its combustion cycle. You shouldn't really even see the 3% drop.

Like the original post, your efficiency dropping can be for other reasons. You're car is too old to detect and adjust to the fact its running ethanol. You're not staying with E10. It could take several tanks to tune into a different fuel mix depending on the car's computer. Lastly, ethanol will let you mix absolute garbage in terms of gas with it. It will mask most of the signs of bad gas, except lower energy. So an unscrupulous gas dealer could be mixing crud with the ethanol.
 
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