Before you say, "Isn't that true?" let's look at this with some facts.

A recent report by the Department of Energy (DOE), specifically states that ethanol can actually increase engine efficiency. And when your engine is more efficient, you get better fuel economy.

How is this possible?

As the DOE states, engine efficiency can be achieved through higher compression ratios. But compression ratios are currently limited because gasoline can auto-ignite or "knock" in high compression ratio engines. The way to get around this is by using a high-octane fuel.

As we all know, most people don't use high-octane gasoline because it costs more at the pump. So carmakers in general tune engines in their cars to use lower octane levels. 

But ethanol has an octane rating of 113. Moreover, it is cheaper than gasoline and would make purchasing a high-octane fuel at the pump a lot more affordable.

Indeed, here's what the DOE has to say about using high-octane fuels in an engine with a high compression ratio.

"Higher-octane fuel would enable downsizing, downspeeding, and charge air boosting of the engine to improve the fuel economy of the vehicles," the DOE said. 

In fact, it points that the optimum ethanol blend level would be between 25 percent and 40 percent for engine efficiency.

And the DOE says engine efficiency improvements can improve a vehicle's fuel economy by 35 percent to 50 percent. That's an astounding improvement for a vehicle using an internal combustion engine.

The reason why we aren't experience such fuel economy improvements at the moment is because the engines in the cars we use aren't optimized or tuned to a high compression ratio to maximize ethanol's benefits. And they won't be as long as oil remains the dominant fuel in the world and the industry resists opportunities to increase ethanol content in gasoline.

But the DOE predicts that could change in the next decade (when's there's no more oil?).

Last but not least, it's important to note that a vehicle's efficiency is also determined by the way we drive our cars. The DOE states up to 20 percent of a vehicle's fuel consumption is infleunced by the driver's driving style.

So, let's stop making ethanol the scapegoat for lower fuel mileage.