Turbo Buick guys are well known for using alcohol injection when running rediculous boost levels. The injection of alcohol in these applications has a few beneficial results.
The number one benefit, for this application, is that the alcohol increases the octane of the fuel making the fuel less likely to pre-detonate. This allows for running higher boost (essentially, higher compression) without pumping more expensive fuels into the car.
Other benefits include cooling off the engine internals when the alcohol flashes, thus reducing cylinder temperatures. In addition to that, the alcohol acts to subcool the air charge.
Given what I have learned from reading about alcohol injection and seeing some mention of water injection in those discussions, I would go out on a limb and say that it isn't really too useful to improve FE. It can certainly come in handy when the goal is to produce huge power/torque numbers.
chevy at one time wanted to do that with the cruze. that is probably all on the backburner since they whole possible bankrupcy thing. it was going to have a 1.4liter turbo engine which couldn't get out of it's own way until the boost kicked in. kind of the best of both worlds. you get power if you need it and MPG when you didn't (power is relative too, I am sure that even with boost, it wasn't a speed demon of any sort.)
has anyone heard if GM filed for bankrupcy?
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And now they'll totally screw it up, just like the gov't always screws stuff up. They did not need gov't intervention. All they needed was to file for bankruptcy reorganization so they could drop the expensive union contracts. The US automakers couldn't compete because of the contracts the UAW has forced down the automaker's throats. Why do you think when Foreign automakers build factories here in the states, they don't build them in Detroit? Its always Tennessee, Kentucky, Alabama, etc. They try to be as far from Detroit and the UAW as possible.