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Is ethanol a good gasoline substitute? Not really. It is hard to ignite, has lower BTU's per pound and is more costly to produce than gasoline.

For every 1 gallon of ethanol, there is a net energy loss of 54,000 Btu. Ethanol from corn costs about $1.74 per gallon to produce, compared with about 95 cents (in 2006) to produce a gallon of gasoline. If it were not for our government subsidizing the alcohol producers, ethanol fuel would be more expensive than pure gasoline. If the industry would capture the energy used to produce ethanol, the net result would be more fuel at a lower cost.

Gasoline is hygrophobic (will not mix with water) - Ethanol is hygroscopic (not only mixes with water, but attracts and absorbs water from the atmosphere)

From https://www.thoughtco.com/definition-of-hygroscopic-605230:

Definition of Hygroscopic
A hygroscopic substance is able to absorb or adsorb water from its surroundings. Typically, this occurs at or near ordinary room temperature. Most hygroscopic materials are salts, but many other materials display the property.

When water vapor is absorbed, the water molecules are taken into the molecules of the substance, often resulting in physical changes, such as increased volume. Color, boiling point, temperature, and viscosity can also change. When water vapor is adsorbed, the water molecules remain on the surface of the material.

Examples of Hygroscopic Materials
Zinc chloride, sodium chloride, and sodium hydroxide crystals are hygroscopic. Silica gel, honey, nylon, and ethanol are also hygroscopic.

Storing Hygroscopic Materials
Hygroscopic chemicals require special care. Typically, they are stored in airtight containers. They may also be maintained under kerosene, oil, or within a dry atmosphere.

Uses of Hygroscopic Materials
Hygroscopic substances are used to keep products dry or to remove water from an area. Hygroscopic materials may be added to products because of their ability to attract and hold moisture. These substances are referred to as humectants. Examples of humectants used in food, cosmetics, and drugs include salt, honey, ethanol, and sugar.

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So, in gasoline, the alcohol absorbs water from the atmosphere, becomes heavier than the gasoline, separates and settles on the bottom of the fuel tank. In a steel fuel tank it causes rust and in a plastic tank it causes the plastic to expand and soften slightly. Certain plastics will dissolve when in contact with alcohol for an extended period of time.

A very good article detailing the effects of Ethanol on various polymers can be viewed HERE. Common neoprene fuel line will melt into a substance resembling uncured silicone sealant. Neoprene fuel line cannot be used with ethanol blended fuel.

If you have read this far: What is the best and most abundant source of fuel for use in internal combustion engines? Answer: Water

Water is made of Hydrogen and Oxygen - you can separate the hydrogen and oxygen by electrolysis (pass an electric current through the water). Water is an insulator (neither Hydrogen or Oxygen conduct electricity) so to pass a current through the water, an electrolyte needs to be added. An electrolyte can be salt, sodium bicarbonate (baking soda), any number of acids and others. For safety, baking soda is a good choice.

Hydrogen can be burned in a gasoline engine without modification. Only the fuel delivery system need to be modified.

Hydrogen is 57 times lighter than air than gasoline vapor. Hydrogen has about 66% more energy per pound than gasoline so a vehicle getting 30 miles per gallon (about 5 miles per pound) on gasoline would get about 8.3 miles to the pound on Hydrogen.

Water is about 11% hydrogen and 89% oxygen - the byproducts of hydrogen combustion is mostly carbon dioxide and water.

20 gallons of water (8 pounds per gallon) would yield approximately 16 pounds of Hydrogen to power a vehicle 130 miles - fill ups would be more frequent or more water would have to be stored on board, but fire hazard due to a ruptured tank would be eliminated and fuel cost would be dramatically reduced.

Impact on the economy? Gasoline and internal combustion engines decimated the horse and buggy industry as would water for fuel impact the peteroleum industry, but it would not put refineries out of business. The refineries would suffer an economic setback, but the petroleum industry would adjust with increased production of other products such as jet fuel, pharmaceutical chemicals and "petroleum distillates".Petroleum distillates include gasoline, naphtha, mineral spirits, kerosene, paraffin wax, and tar. They are the primary ingredient in many consumer products, including certain furniture polishes, paint solvents, adhesives, and automotive chemicals.

I could write a tome on this subject, but I'm not a writer.
 
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