If I lived in an area where E85 was available all the time at a reasonable price, I would consider building an engine for an older vehicle that would benefit from the ethanol's much higher octane rating. Maybe increasing the compression ratio to say, about 12 to 1 would increase the efficiency of the engine enough for it to be comparable to the conventional gasoline engine. But of course I would have to use E85 all the time, since I am sure with that high compression ratio the engine would detonate badly, even with unleaded premium. Some of the real high performance engines of the 60's had compression ratios over 10 to 1. I would bet that those engines, if they are still that high compression ratio, would work fine with E85 if the carbs were richened somewhat and the timing experimented with. I think that EFI would also work, but the computer would need some reprogramming. If I was shopping for an aftermarket EFI, I would ask for assurances that the whole system was compatible with ethanol. Some of the aftermarket EFI systems are supposed to be fairly easy to reprogram, using a laptop computer. All it takes is time and MONEY! I haven't read just how the current "flex-fuel" systems operate, but I suspect that they have some kind of sensor to identify the fuel being sent to the engine. Then the timing could be adjusted by the computer to a bunch more advance when alcohol is detected and maybe even change the cam timing. But I don't see how they could change the compression ratio in a flex-fuel engine, and that would mean that the efficiency would probably be quite a bit lower when using high alcohol fuel. But such an engine would still be able to run on conventional unleaded gasoline without pinging. I also wonder if E85 would work well in the Winter. Very cold winter starts can be difficult with gasoline unless it is a winter blend, which must have more easily vaporzed components. Not so much of a problem with port fuel injection, but it can be a real bear with a carb. I think that we will see more and more ethanol production in the future, due to the increases in petroleum prices. Petroleum has just been too cheap for too long to really consider alternatives, but now all that is changed. I am most interested in the possibility of economically producing ethanol from cellulose. Maybe all that straw and other crud out there will become worth something other than to become humus in the soil. These are interesting times!
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