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Allch Chcar -- re: "...an appropriate engine..." The rapidly increasing use of turbocharged engines (ie: variable compression-ratio) can overcome the HP differences between straight-gasoline (indolene) and ethanol-laced mixtures (E85, etc.) but they will NEVER overcome the MPG losses because the energy content differential is too great.
Octane (knock resistance) is totally different from energy content (BTU).
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