One of my hobbies is muscle cars  and I have friends that are drag racing fanatics so I am around engines that run on ethanol weekly. Here is what I have learned, If an engine is carbureted and runs on gasoline then it can be converted to run on ethanol (corn liquor). First off a little info on ethanol, it is any distilled spirit in its pure form. Everclear is ethanol, its just expensive due to the alcohol tax the government imposes. Now the ethanol you buy has been denatured so as to make it poisonous to drink and therefore can not be taxed as spirits. Ethanol like gas burns readily under a flame but not with as much energy as gasoline. It burns clean and very dry with almost no reside after it is burned. It also loves to mix with water so making sure you store your ethanol in a sealed container is super important otherwise you will have to re-distill the spirit to remove the water. So here is the deal, you can not just pour ethanol into your gas tank and make it work but it is not that hard for a person with basic mechanical knowledge. First you need to figure out what parts of your fuel system is not ethanol friendly. This is usually the hoses as the ethanol will eat it in short order, I recommend soaking all parts of the fuel system in ethanol for a week to see if anything is affected. Once you know that your fuel system will handle it you can move onto the carburetor. Ethanol contains about 30-40% less stored power then gasoline per unit [of volume]. This is why flex fuel cars get fewer miles per gallon on E85  than pure petrol. This means that you will need to add that much additional fuel to make ethanol reach the correct air/fuel ratio that internal combustion engines love. On a car this means that you need to up the jet size to add more fuel. I usually run a 38-42% increase in my engines but your mileage may vary based on elevation and engine. So cars are easy since it is just a simple jet change but other things are a little more difficult like say chainsaws or small motorcycles. These will usually only have a small amount of jets available to compensate for elevation changes and not nearly enough change for the ethanol conversion, so you will have to improvise. You can buy a couple standard jets for the particular carb you are working on, then measure the opening in your current carb and add the 38% to the hole size and drill the jet out with the proper size drill. Once this is done you can reassemble the carb. Now based on the burning characteristics of ethanol you will need to advance your engines timing to the range of [spark plug ignition] 20 [degrees] before top dead center  (BTDC) to 45 [degrees] BTDC, again you will have to experiment with this because I have found that it varies widely based on what that particular engine likes. This is easy on a engine like a cars which is made to be adjusted but can be a huge pain on a smaller engine that has its timing set without adjustment. This is where you will have to investigate your personal engine and see how the timing is set. All engines have a “trigger” that tells it when to spark, to advance that you just have to trick the trigger into firing earlier by modifying the mounts or moving the spark trigger. On a single cylinder engine this is easy since there is only one “trigger” and that is usually based off the crankshaft, but again that varies by engine. That is it, test the fuel system, bigger jets, and advance the timing and now your engine will run on 100% pure ethanol.
Now as I said earlier ethanol does not contain as much stored energy as gasoline so doing the above modifications will result in an engine that will run on pure ethanol it will also run with a noticeable drop in power. So to make up for that you can exploit the fact that ethanol can withstand much higher compression ratios then gasoline without suffering detonation (pinging). Ethanol does not have an “octane” rating since it is not petroleum based but for comparison here I will use that style rating. Most gasoline has a 87 octane rating and ethanol has a “147” octane rating. So what does that mean? It means that you can run a higher compression ratio in your engine to make up for the loss of power. Now I must forewarn you that once you up the compression ratio you are no longer going to be able to run gasoline ever again in that engine. In the drag racing cars we have found that ethanol loves around an 17:1 compression ratio where commercial “pump” gas is around 9.5:1 ratio. Now that is really stout and requires really strong engine parts so I keep my chainsaw and roto-tiller at about 13.5:1 so I don’t break a crankshaft. You will be able to increase the compression ratio by either adding a higher compression ratio piston or by milling the heads down to provide a smaller combustion chamber thus increasing the compression ratio. Once you do this you will find that the engine actually has a lot more power then it did on gasoline.
Now for the downside of ethanol, like I said before it burns very clean with little residue, this also means it has very little lubrication properties for your pistons and valves. In a two stroke engine this is not a problem since you are mixing oil into the fuel anyway so I don’t worry about it at all, Actually I think two stroke engines are the best conversions. On a four stroke engine you will have to add some sort of lubricating additive. We use a little bit of Marvel’s Mystery Oil in the ethanol for the drag cars, but again there are tons of other products out there, Or you can do like me and just run pure ethanol in my roto-tiller since it is not a continuous use kind of machine and I figure the tines will wear out long before the valves.
It is also a little more finicky about storing then standard gasoline because it will absorb water right out of the air, but it also from what I understand has a pretty much indefinite storage life if it is kept sealed unlike petroleum.
We just buy our ethanol locally. You can find it anywhere that sells commercial fuels and kerosene but prices vary widely based on stores so shop around. But the best part is anyone can make their own ethanol right at home. Now I am not all that knowledgeable about this part as I am not a bootlegger (yet) But making ethanol is basically making moonshine. Now I must warn you that making illegal hooch is against the law and the ATF  [Bureau’s agents] will be at your door and I assure you that they have absolutely no sense of humor. So if you decide to do this make sure to get the proper permits to do this. From what I understand this is quite simple and is nothing like dealing with the firearms division of the ATF, just explain that you are using it as motor fuel and not spirits.
Once you have your still you can make ethanol out of anything that ferments, i.e. sugar, fruits, grass, hay, grain, corn, potatoes, berries, I think that anything with sugar content will provide the highest yield based on weight and that is why brazil uses sugar cane to produce theirs. Think about all the organic waste you have around you, un-ripened fruit on the tree, garden plants after harvest, grass clippings and soon you see what kind of renewable resource this, and it would be even more important in the event or TEOTWAWKI . Think about how much easier life would be with a roto-tiller, a chainsaw and a four wheeler that you can make fuel for indefinitely, when no one else around you has gasoline.
It is nice to be able to buy your ethanol now and get used to using it and storing it and work out all the kinks that you will run into before you are depending on it for your life. So I am of the opinion that you should do this now to figure out everything so the transition is seamless if something happens. Plus running ethanol is cheaper then gasoline, around a buck a gallon.
There is also a ton of information out there on converting engines, so do your research and learn all you can before jumping into it, remember I have friends that run ethanol so when I have problems I take it to their house. You might not be so lucky in your area.
So you do not need to buy a special engine to run on ethanol, you can just convert any engine with a carb. I have ran my roto-tiller for three years now on ethanol every spring, my chainsaw quite a bit for work monthly, and for the past five years I have ridden a two stroke motorcycle that runs on ethanol without much more of a problem than gasoline. The best part is that with a still you can produce your own fuel at your retreat with almost anything as your mash base. Also one more perk of this is that making ethanol is actually making drinking alcohol so that is another barter item that will be of great value after TEOTWAWKI , to an alcoholic spirits will be more valuable then gold.
JWR Adds: Some special precautions must be observed when making and operating an ethanol still, storing its product, and using it as either fuel or liquor:
1.) Use only uncontaminated ethanol-producing sugars. Otherwise–with wood, for example–you’ll run the risk of making methanol, which is toxic for consumption and causes blindness.
2.) Copper flashing to prevent lead contamination from any soldered pipe joints in the still
3.) General boiler safety (including pressure relief valves) to prevent boiler explosions
4.) In the United States, BATFE licensing is required if any ethanol produced that will be sold for sipping. And presumably the portion sold for use as fuel must first be denatured .
5.) Tightly capped containers for your finished product, since ethanol is highly hygroscopic–it rapidly absorbs moisture from the air.
6.) Most gasoline engine fuels tanks and fuel systems are not suited to alcohol. This one reason that I recommend buying “Flex Fuel” (E85 compatible) vehicles , whenever possible.
7.) Alcohol burns with an almost invisible flame, so any leak in a fuel system can cause a particularly dangerous vehicular fire.