this is true, however you would need to have an engine that can take
advantage of the increased octane.  The carb would have to be jetted
much richer as well (or appropriate adjustments made to the FI system)
to not run lean as ethanol is an oxygenated fuel, and its energy
density is less as well (as you don't need the oxygen that it carries
with it, you can just get it out of the air as needed) so mileage as
measured in MPG would suffer even if efficiency remained the same.  I
believe that the energy density of pure ethanol is roughly half that of
pump gas but that's going off memory.

I'm not saying that ethanol is a BAD fuel - just that it has drawbacks.
Were it cheap enough (i.e. half the cost of gasoline) it could catch
on in a big way, because cleaner burning and increased octane are Good
Things.  (there's a reason dragsters use methanol, after all.)  The
only really insurmountable drawback is the decreased cruising range
when used in older vehicles without extra-large fuel tanks to
compensate.

nate

Not true, it is higher octane, but delivers less energy when burned.

"Ethanol has a 34 percent lower heating value than gasoline and tends to
mix with any water collected at the bottom of the tank. Thus 1.5 gallons
of ethanol are required to replace the energy in one gallon of gasoline."

   You can make more power with ethanol by increasing the compression
ratio, and burning more of it per mile, but less HP/gallon burned
compared to gasoline.  The whole thing is a subsidy to the farm states
and not much more. Someday we can produce a gallon of ethanol without a
net energy loss, but not yet.

 I have a copy of The "Ford Speed Manual", by Bill Fisher, from 1952.
There's a chapter about using alcohol in hot rods,  mostly flathead V8's,
for competition.  The idea was to use it at the track or "lakes" for the
extra power, (substantial, even without nitro-methane); and convert back to
gas for daily use.  Edelbrock sold "Alky-Conversion" kits for Stromberg "48"
or "97" carbs, @ $4.50 each.  The recommended way to spare the fuel pump
diaphragm was to use the pump to pressurize the fuel tank.  It pumped air
into the tank to force fuel out.  A small hand pump was used to supplement
it.
 Fisher said a lot of the power increase was because the intake charge was
cooler than with gas.  It was common to have frost form on the outside of
the intake manifold.
                                              Mike M.