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from Wikipedia:

Ethanol contains approx. 34% less energy per unit volume than gasoline, and therefore in theory, burning pure ethanol in a vehicle will result in a 34% reduction in miles per US gallon, given the same fuel economy, compared to burning pure gasoline. Since ethanol has a higher octane rating, the engine can be made more efficient by raising its compression ratio. In fact using a variable turbocharger, the compression ratio can be optimized for the fuel being used, making fuel economy almost constant for any blend.[25][26] For E10 (10% ethanol and 90% gasoline), the effect is small (~3%) when compared to conventional gasoline,[55] and even smaller (1-2%) when compared to oxygenated and reformulated blends.[56] For E85 (85% ethanol), the effect becomes significant. E85 will produce lower mileage than gasoline, and will require more frequent refueling. Actual performance may vary depending on the vehicle. Based on EPA tests for all 2006 E85 models, the average fuel economy for E85 vehicles resulted 25.56% lower than unleaded gasoline.[57] The EPA-rated mileage of current USA flex-fuel vehicles[58] should be considered when making price comparisons, but E85 is a high performance fuel, with an octane rating of about 94-96, and should be compared to premium.[59