I agree that tuning for ethanol helps mpg. However, E10 is still 87 octane, so it has the same limits as if you bought E0 87 octane. Therefore, there WILL be a mpg loss.
However, E85 is about 105 octane, so you can raise compression and increase timing to optimize burn efficiency. By doing that, it's possible to extract a greater percentage of the energy from the fuel, which an actually lead to running E85 with only a small mpg loss, despite the lower energy content. The only disadvantage is that it will REQUIRE E85 or other high octane fuel to run.
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Call me crazy, but I actually try for mpg with this Jeep:
Typical driving: Back in Rochester for school, driving is 60 - 70% city
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