You are incorrect on a number of points. An engine burning ethanol gets about the same fuel economy as an engine burning gasoline, and the ethanol engine will actually get BETTER mileage compared to a gasoline engine when under heavy loads such as towing. The increase in compression over the gasoline burning engine is what makes this true. All gasoline engines use what's called an Otto cycle. The Otto cycle is more efficient than the diesel cycle when comparing the two using the exact same compression ratio. The increase in compression of the diesel cycle over the Otto cycle is what makes diesel engines more efficient. Anytime you can increase the compression ratio of an Otto cycle engine, you are actually increasing its efficiency.

Your definition of specific heat is also incorrect. Specific heat can be simply defined as the amount of heat required to raise a unit mass (or mole) of a substance by one degree in temperature. The specific heat of a substance does not define the energy available in a combustion process. You're mistaking specific heat for a heat energy value.

And you say most engines burning ethanol will lose power output when compared to a gasoline burning engine......that may be true if making the conversion to ethanol without any modifications but if one takes the time do increase the compression ratio as well as make other changes the power potential equals that of a gasoline engine. Don't take my word for it. Check the link:

http://www.westbioenergy.org/reports...55032final.htm

To summarize, the ethanol engine actually had a 2.5% torque increase over its "pre-conversion" state and hp numbers close to stock.