Does 10% Ethanol harm engine?
 

They are starting to use 10% ethanol in Hawaii and I heard there are problems with water mixing. I heard of fuel lines and gaskets rotting, perhaps fuel tanks corroding. Is there anything to worry about or are the new Toyotas hardened for ethanol as a lot of places use it now? Is there anything preventative that can be done?

Here's some good reading on that subject from Chevron: Oxygenated Gasolines

If you aren't going to read much of it, be sure to read the part about water on the second page.

Assuming the E10 gasoline you use doesn't end up with a water/humidity absorption problem it should be OK in your xB, though your MPG will likely be reduced noticibly.

Thanks, sucks that my mileage is going down though. The price remains the same so I'm getting less Miles per dollar. It's a good start for our country though.

Since the state requires all stations sell E10, I hope they require them to take reasonanable precautions towards reducing water in their tanks.