Ethanol has been known as a fuel for many decades. Indeed, when Henry Ford designed the Model T, it was his expectation that ethanol, made from renewable biological materials, would be a major automobile fuel. However, gasoline emerged as the dominant transportation fuel in the early twentieth century, because of the ease of operation of gasoline engines with the materials then available for engine construction, and a growing supply of cheaper petroleum from oil field discoveries.
But gasoline had many disadvantages as an automotive source. The new fuel had a lower octane rating than ethanol, was much more toxic (particularly when blended with tetra-ethyl lead and other compounds to enhance octane), was generally more dangerous, and contained threatening air pollutants. Petroleum was more likely to explode and burn accidentally, gum would form on storage surfaces, and carbon deposits would form in combustion chambers of engines. Pipelines were needed for distribution from area found to area needed. Petroleum was much more physically and chemically diverse than ethanol, necessitating complex refining procedures to ensure the manufacture of a consistent gasoline product.
Because of its lower octane rating relative to ethanol, the use of gasoline meant the use of lower compression engines and larger cooling systems.
Diesel engine technology, which developed soon after the emergence of gasoline as the dominant transportation fuel, also resulted in the generation of large quantities of pollutants.
However, despite these environmental flaws, fuels made from petroleum have dominated automobile transportation for the past three-quarters of a century. There are two key reasons: First, cost per kilometre of travel has been virtually the sole selection criteria. Second, the large investments made by the oil and auto industries in physical capital, human skills and technology make the entry of a new cost-competitive industry difficult.
Until very recently, environmental concerns have been largely ignored. But all of that is finally changing as consumers demand fuels, such as ethanol, which are much kinder to the natural environment, and human health.
It looks like Henry was just a half century ahead of his time!