I am puzzled by these statements about getting 2-5% more power from E85, but only if we develop 100% E85 engines from scratch. Saab is already doing much better with a flex-fuel car. The Saab 9-5 biofuel reportedly gets up to 20% more horsepower on E85 and suffers no loss in miles per gallon compared to gasoline (search my posts on the SAAB 9-5 for references). What's more, this is not a 100% E85 car, but a flex-fuel car that can run on 100% ethanol-free gasoline in case E85 is not available. The key is its variable turbocharging. It adjusts the boost for different ethanol content. This car is on the road in Sweden and could be coming to the U.S.
USATODAY.com - Is ethanol the answer?: "Your vehicle wouldn't make the most of the fuel. FFVs are able to burn E85 but are tuned for best performance on gasoline because it's abundant and E85 isn't. An engine would have to be designed from scratch to fully exploit E85's higher octane and overcome its inferior energy content.
'If you were using 100% E85, you could tune the engine and ... maybe get 2% more power,' says Ken Kridner, the GM engineer who helped adapt GM V-6s to E85 capability. The Energy Department is more optimistic, suggesting gains of 3% to 5%."