Now, if you analyze the amount of CO2 emitted from burning a renewable fuel relative to the amount of CO2 generated in processing and delivering that fuel to your gas tank, the recycling of CO2 in growing the fuel feedstock "upstream" of its production greatly offsets the emissions from the tailpipe. Actually, cellulosic E85 could potentially reduce CO2 well-to-wheel emissions by about 65 percent.

In the case of E100, that reduction is about 90 percent. On the flip side, when one burns petroleum, CO2 is being released into the atmosphere that was stored in oil reserves that took millennia to form, adding to the overall CO2 content in the atmosphere. When one burns cellulosic E100, any residual CO2 released by the burn is only replacing CO2 that was previously consumed by the plant before it became feedstock.

Methanol-Not Really Green
Concerning methanol, it's commonly made by converting natural gas through a high-pressure catalytic process in the presence of steam. This process is referred to as steam-methane reforming. Because natural gas isn't a renewable source, the carbon footprint is higher relative to ethanol. To conclude, in theory, if a country were to be able to produce ethanol in quantities sufficient for personal transportation needs, they could produce an endless source of energy that largely circumvents the global climate change debate.

To summarize the pros of ethanol with regards to energy security:
More power: The higher octane rating relative to gasoline delivers more power; in addition, the higher heat of vaporization results in better volumetric efficiencies
Significant well-to-wheels greenhouse gas reduction: Using ethanol greatly reduces the contribution of gases associated with global warming.
Renewable: Ethanol is plant/algae/energy crop based and therefore can be regrown.
Supports domestic markets and agriculture: If produced domestically, money that is normally exported to pay for oil stays local (today, nearly 60 percent of oil that the United States consumes is imported).

Now, we need to cover some of the drawbacks and issues associated with using ethanol, and yet demonstrate that they may be outweighed by the benefits.

One drawback associated with ethanol usage relative to petroleum-based fuel is the inherent lower energy content. E100 has a lower heating value (LHV) of approximately 26.9 mega joules per kilogram (MJ/kg) of fuel combusted, whereas gasoline has a LHV of 44.0 MJ/kg. Simply stated, this means that a gallon of ethanol has only 61 percent of the energy of a gallon of gasoline. The 15 percent of gasoline in E85 raises the energy content of the fuel to about 70 percent of that in gasoline.

Compared to ethanol, methanol has an even lower heating value of 20.0 MJ/kg. In other words, a gallon of ethanol has only two-thirds the energy of a gallon of gas, whereas methanol has less than half.

Real-world use of E85 relative to gasoline, however, shows an approximate reduction in mileage of only 25 percent, not the 33 percent expected from the energy content deficit. The reason for this lower percentage is that 15 percent of the energy in E85 is gasoline, in addition to a few other favorable characteristics of ethanol fuel that will be discussed in further detail.

The reason for the lower energy content is quite simple once one looks at the chemical composition of the fuels and compares the theoretical stoichiometric combustion relative to gasoline. For those unfamiliar with the term, stoichiometry refers to the balanced chemical reaction of a substance with another-in this case, combustion (which is an oxidation exothermic reaction). If we use some representative composition of C8H16 for gasoline, the equations in red above represent full combustion of ethanol vs. gasoline.