Ethanol is not cut with water, but rather it is Hydroscopic and absorbs water just as brake fluid absorbs water. After some time, the ethanol becomes so bonded with water, that it separates from the fuel. Ethanol blend gas is a bad thing, but the only manufacturing process that is a failure is Ducati using a plastic that absorbs water and expands past the engineered tolerances of the fasteners and housing. Startron is a good product as it decreased the ethanols ability to absorb water.