Michael Briggs writes:

>
>Gasoline as a denaturant would ruin it for use in making biodiesel.

Not at all -- I've done it many times and run it successfully in my
Beetle TDI for months on end.

"Fuel-grade ethanol" is 200 proof (actually 99.5% anhydrous)
grain-derived ethanol, denatured with 2% or 4% gasoline. So little
gasoline poses no problem whatever to the biodiesel reaction or
subsequent combustion in your diesel engine.
It's cheap because it's (almost) exclusively  sold in railcar quantities
for turning gasoline into gasohol. Occasionally you can find a
producer who will sell you a drum at railcar prices, and then you
really will pay only  $1.50 a gallon or so. Short of you finding such
a windfall, I'd take the advice of another poster who suggested you
get an Alcohol Fuel Producer permit. Then you can buy or distill
pure ethanol with no tax hit.
If your interest is environmental, though, be sure your alcohol is
always fermentation-based. The so-called "synthetic" ethanol from
ethylene is as bad as using petrodiesel.

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