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Originally Posted by maxSaleen
A fuel with such a high octane rating is going to need a lot of oxygen for proper combustion. Normally aspirated engines are not capable of this.
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Incorrect on both counts. Octane rates a fuel's willingness to burn and has little to do with the stoichiometric ratio for complete combustion. For a given mass of fuel, ethanol requires much less oxygen than gasoline. Converting a gas engine to alcohol requires that the carb jets or fuel injectors be approximately doubled in capacity, which allows proper fueling for the same amount of air. Without making this change, the engine would run terribly lean - if it would run - even without a turbo.
Alcohols actually have less energy density than gasoline, but using twice as much fuel allows greater power to be made. Doesn't help cruising range with an X-gallon tank, though.
Check out this table.
Alcohol will allow more aggressive tuning than gasoline. This can come from more compression, boost, and/or timing. It's also somewhat more tolerant of lean mixtures, though this is more of a convenience for the tuner than a performance advantage per se.