Why is water a problem in ethanol fuel?

Question: Why is water a problem in ethanol fuel?

Answer: When water is mixed with ethanol and gasoline solutions it can induce what is called a phase separation, which means one type of solution will separate out of the other and sit on top of or below it instead of both solutions being mixed together. This occurs in ethanol and gasoline fuel mixtures because ethanol readily mixes and dissolves with a small amount of water, while gasoline does not dissolve in water. By adding the water some of the ethanol can separate from the gasoline to create a ethanol and water layer that sits below the gasoline and ethanol layer causing serious problems including possible engine damage.

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