With gas prices continuing to stay high, many people are looking at other fuel options. In previous blogs, we discussed hybrids and diesel fuel. Ethanol is another alternative fuel option that can also save you some money at the pump.

Ethanol, grain alcohol made mostly from corn in the U.S., has seen a resurgence in interest lately, including new federal mandates to produce at least 36 billion gallons of biofuels by 2020. Most ethanol today is blended into gasoline in a mixture called E10, 10 percent ethanol to 90 percent gasoline. All new cars can use E10.

More controversial is a small amount that is blended into a mixture of 85 percent ethanol and 15 percent gasoline called E85, which only a small percentage of cars can use without damage to their fuel systems.

Engineers are developing ways to make ethanol out of material other than food stocks, such as wood chips and old tires. This cellulosic ethanol will be needed to meet upcoming mandates for ethanol production, and will work in cars the same way corn ethanol does.

Pros More than 7 million vehicles today can run on E85, and new biorefineries are increasing capacity. Reduces dependence on foreign oil.

Cons Cars running on E85 get 27 percent worse fuel economy than they do on gasoline in our tests. Less than 1 percent of U.S. gas stations sell E85. Federal fuel economy credits for ethanol may actually be reducing fuel economy in cars overall. And increasing demand for ethanol has been blamed for driving up food prices.

For more information on alternative fuels and fuel economy, see our Guide to driving green.