Tony - there's plenty wrong with ethanol blended fuel, but there's problems with gasoline and pure ethanol too.
Partial oxidation of ethanol can produce harmful acetaldehyde. The International Agency for Research on Cancer (IARC) has listed acetaldehyde as a Group 1 carcinogen. Acetaldehyde is "one of the most frequently found air toxins with cancer risk greater than one in a million".
Oxidation of ethanol in an internal combustion engine is more complete than in open air, but neither gasoline or ethanol is completely oxidized in an engine using atmospheric air. Introduction of an oxidizing agent is required for complete combustion.
From a memo to the EPA:
SUBJECT: Water Phase Separation in Oxygenated Gasoline - Corrected version of Kevin Krause memo
FROM: David Korotney, Chemical Engineer Fuels Studies and Standards Branch
TO: Susan Willis, Manager Fuels Studies and Standards Group
On May 26, 1995, Kevin Krause finalized a memorandum describing the conditions under which water phase separation will occur in oxygenated gasolines. Recently, several errors were discovered in that memorandum. I have made the necessary corrections, and now resubmit the complete text of Kevin's memo for your review and approval.
Excerpt: "at 60 degrees F, water can be absorbed by a blend of 90% gasoline and 10% ethanol up to a content of 0.5 volume percent before it will phase separate. This means that approximately 3.8 teaspoons of water can be dissolved per gallon of the fuel before the water will begin to phase separate." A chart included in the memo shows that at zero degrees F .3% of water causes phase separation and at -20 the amount of water needed to separate alcohol from the gasoline is about .2%. The entire memo can be accessed here Alcohol Phase Separation
Each gallon of gasoline contains appx. 12 ounces of ethanol. Therefore, fuel line deicers are not needed or recommended when using ethanol blended fuels. HEET fuel line deicer is sold in 12 ounce bottles to treat 20 gallons of gas. 12 oz in 20 gal (2560 oz in a gallon) is putting .47% ethanol into the fuel. If .47% of ethanol in gasoline will melt ice in the fuel line, how much ice will 10% ethanol melt?
I'm done rambling now - I got to get back to work.