E85 (85% ethanol) is another whole ballgame. The ethanol thing is a strange mixture of economics and politics and I would question that it is really cheaper (especially on an energy content basis) compared to gasoline. Very much dependent upon farm and manufacturer subsidies, commodity pricing, taxes etc., weighed against political favor and desire for energy self-sufficiency in transportation fuels. Depends on how you do the math - not a simple formula.
Also in the equation is renewable (ethanol) vs non-renewable (petroleum) resources although ethanol production (fertilizer manufacture, farming, fermenting, distillation, purification) is very energy intensive. On one hand, it employs a bunch of people and on the other it removes huge tracts of arable land from food/animal feed production. Who knows how these economics will shift as oil availability dwindles and fuel prices rise? Ethanol another advantage as an anti-knock agent. Less environmentally damaging than tetraethyl lead, MTBE (methyl tertiary butyl ether) and MMT (methylcyclopentadienyl manganese tricarbonyl).
In any case, it appears that we are stuck with ethanol in gasoline at this point and for the foreseeable future . While many manufacturers say 10% maximum, E15 appears to be gaining traction in many areas. I'll stay with the E10 long as there is any choice and would happily switch back to E0 if it was readily available.
(Note: Trying to NOT turn this into a political discussion although any talk related to energy economics (fossil fuels, hydroelectric, wind, solar and nuclear) has significant environmental, sustainability, and political components.)