My experience with E10 is that it drops mileage on the Matrix roughly 2 mpg. IMO this is an acceptable loss considering it burns cleaner.
I do not agree with the current method of ethanol production. However, cellulotic ethanol prodution is much more efficient and I believe should be used to supplement gasoline. This will inevitably be the way we go in the future.
My biggest beef with the whole ethanol thing is these flex fuel vehicles. Engines are (or should be) designed to work with ONE kind of fuel. This enables the designers to optimize the engine for that fuel type. Designing for more than one fuel type makes the designers make compromises that decrease the efficiency of the engine. For example, an engine that runs E85 can run over 17:1 compression ratio! You can't tell me a flex fuel engine that has a 10:1 compression ratio is anywhere near efficient when running E85, even if ignition timing is retimed.
