I think a lot of the old wives' tales about ethanol come from when it
was first introduced. Everyone had carburated cars, and most people had
a lot of water in their fuel tanks because they'd never used a fuel with
alcohol in it. The first thing that happened was everyone had fuel
system trouble because the ethanol collected all the water and drew it
into the fuel system. (This doesn't happen with regular use because the
water never has a chance to collect.) Once that was straightened out,
everyone started to notice lower power because their cars were running
lean. Like any oxygenating agent, ethyl alcohol requires a slightly
richer mixture. Fuel-injected cars with oxygen sensors will
automatically adjust.
This is just like the "biodiesel clogs filters" problem. It's mostly a
transitional issue.
Fuel with 10% ethanol was very common in Michigan, and was everywhere in
Minnesota, when I lived there. I never had any problems. I would
*much* rather deal with ethanol than MTBE, which contaminates ground
water and hardens rubber fuel lines.