Aside from all the other little problems (like starvation in poor countries) associated with ethanol production, gasoline blends using ethanol actually cost motorists more, even when the blend is cheaper per gallon. The Kansas City Star explains:
"...a gallon of E-10, which is a blend of 10 percent ethanol and conventional gas now widely available in the Kansas City area, there's an energy difference of about 3.4 percent [in energy content]. "
So motorists get lower mileage. In fact most of the people I know get mileage much worse than merely a 3.4% decline. And the Star quotes motorists to that effect. Ten percent seems to be the consensus among those whom I have heard comparing their experience with E-10 to ordinary gasoline.
In Missouri, E-10 is now mandatory. But in Kansas, where many suburbs of Kansas City are located, it is not mandatory, so people are buying ordinary 100% gasoline fuel there.
E-85 blend gasoline, with 85% ethanol gets much worse mileage. But vehicles need some fairly special minor special equipment to be able to operate with it. General Motors is betting heavily on "flex fuel" vehicles to sustain its green street cred. But now, with the rise in price for corn and other commodities, even with federal subsidies, it is turning out that fuel costs rise when motorists purchase both ethanol blends.
AAA now calculates a price for E-85 to adjust for its energy content. The national average pump price for the fuel on Thursday was $2.91 per gallon; regular gasoline was $3.56. But adjusted for its energy content, the price for E-85 jumps to $3.83, or 27 cents more than regular.
Hat tip: D.M. Giangreco