I wonder how much phase separation is unavoidable over time and if this is at all factored into business decisions. Clearly it is not factored into ethanols energy balance (more energy needed to repair/replace engines damaged or corroded by ethanol over time)
Nate,

This analysis seems to fall into the category of searching out every little thing you can conceivably count against ethanol, but not counting positives or charging negatives equally against existing systems.

Corn-based ethanol, especially as applied in the US, is a farce. However, if the US were to import Brazilian ethanol, or ethanol produced in other tropical regions, the 80% reduction in greenhouse gasses over gasoline would certainly compensate for replacing a couple of valves.  

Every single car recently built by major manufacturers can be operated with 20% ethanol content with no impact (although the owner's manual probably only says 10%). The retrofits you are talking about would only pertain to a very small portion of the fleet. Engineer Poet has discussed using newly designed engines that inject ethanol separately and further improve performance.

Brazil has had a major ethanol industry for 30 years. Phase separation as such is, as far as I can tell, is never mentioned as an issue that has impacted business.

Hello Jack,

You may be right on automobiles, but this link talks about expensive and disasterous problems on some boats:
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A serious problem a CORNY solution

Ethanol has been linked to the weakening of fiberglass gas tanks, clogged fuel filters and carburetors. E10 has a shorter shelf-life than gasoline and also attracts water, causing yet another set of problems. But most alarming is the deterioration of certain gas tanks.

BoatU.S. Magazine reported in January that the ethanol in E10 gas was dissolving a limited number of older fiberglass tanks with potentially disastrous consequences. Independent laboratory tests sponsored by BoatU.S. Marine Insurance have now confirmed that the resins used in some fiberglass tanks are leaching from the tank walls, weakening the tanks.

The resin released by ethanol makes its way through the fuel system where it sticks to valves and other internal engine parts. The buildup of this sticky black substance has bent pushrods, clogged intake valves and ruined some engines. Affected engines may run rough, stall or bog down under load.
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The article goes on to list other problems with ethanol in marine engines.

This potentially could be very scary if you and your family experience engine problems while in a shipping lane, or out on the ocean.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

dissolving a limited number of older fiberglass tanks with potentially disastrous consequences.

I do agree that in a "limited number" of applications in boats, cars motorcycles and other existing (primarily old) equipment, the problems can be severe. I would not advocate mandatory, across the board use of ethanol and do think that people should be made aware of this issue.

I have never claimed that I think ethanol is perfect, can by itself be a major solution to dimishing oil supplies, or will be much more than a temporary band aid.  

However, if we think that waning oil resources will threaten our lives, it does not make sense to overlook those applications of ethanol that exist now and are net positive (i.e. sugar cane, not corn or technologies that are not yet developed).

I believe that direct conversion of biomass to electricity will eventually prove to be a much more effective way to utilize plants to offset oil use, but that's not going to help your fiberglass tank owners much either.

I am a part time mechanic at a boat dealership.

Yesterday, a boat with a newish Yamaha F150 was in the shop. The owner said is "quite running".

We were draining the fuel into clear buckets (since the fuel filter did not look good). You could see the clear seperation of the alky and gasoline in the buckets. About 10 percent by volume. He filled up the boat about a month ago from a gas station on the highway. Looks like the fuel absorbed water and seperated after sitting for a month.

I expect to see alot these problems surface.

I am retired living in the country and keep my trips to town to a minimum.  This makes me wonder about the gas/ethanol blend sitting in my gas tank for a couple of weeks in my garage before another fillup.  Is separation something (else) I need to start worrying about?
The key is to keep moisture out. The water is readily absorbed by the alcohol, and that facilitates the seperation.

Obviously a problem in the marine industry.