The evolution of gasoline has thus far brought us to this point:

Octane: (from http://auto.howstuffworks.com/fuel-efficiency/fuel-consumption/question901.htm)

The name "octane" comes from the following fact: When you take crude oil and "crack" it in a refinery, you end up getting hydrocarbon chains of different lengths. These different chain lengths can then be separated from each other and blended to form different fuels. For example, you may have heard of methane, propane and butane. All three of them are hydrocarbons. Methane has just a single carbon atom. Propane has three carbon atoms chained together. Butane has four carbon atoms chained together. Pentane has five, hexane has six, heptane has seven and octane has eight carbons chained together.

It turns out that heptane handles compression very poorly. Compress it just a little and it ignites spontaneously. Octane handles compression very well -- you can compress it a lot and nothing happens. Eighty-seven-octane gasoline is gasoline that contains 87-percent octane and 13-percent heptane (or some other combination of fuels that has the same performance of the 87/13 combination of octane/heptane). It spontaneously ignites at a given compression level, and can only be used in engines that do not exceed that compression ratio.

During WWI, it was discovered that you can add a chemical called tetraethyl lead (TEL) to gasoline and significantly improve its octane rating above the octane/heptane combination. Cheaper grades of gasoline could be made usable by adding TEL. This led to the widespread use of "ethyl" or "leaded" gasoline. Unfortunately, the side effects of adding lead to gasoline are:

When lead was banned, gasoline got more expensive because refineries could not boost the octane ratings of cheaper grades any more.  

Since Lead was harmful and polluting the atmosphere the EPA acted to ban Lead..  It was replaced with MTBE.. which was found to be carcinogenic.. and hence was phased out by the states... and hence today we use Ethanol as an Octane as well as Oxeygenate.

Gasoline has been described as a cocktail of components.. for instance we are approaching in most area's the switch to summer blended gasoline which must meet a lower vapor pressure point.. as such some components such as Butane will have to be reduced and replaced..

From Rapier's site: ( http://www.energytrendsinsider.com/2010/03/07/why-summer-gasoline-means-higher-prices/ )  Why Summer Gasoline means Higher Prices.

Spring is approaching, and gasoline prices are once again climbing. But you may not know that this ritual of climbing prices happens almost every year about this time. If you check the history of gasoline prices at the Energy Information Administration’s (EIA) website you can see that gasoline prices almost always rise between January and May.

The primary reason this happens is due to a seasonal switch in gasoline blends. There are two key (although not the only) specifications that refiners must meet for gasoline. The gasoline must have the proper octane, and it must have the proper Reid vapor pressure (RVP). While the octane specification of a particular grade is constant throughout the year, the RVP specification changes with the seasons. (See Refining 101: Winter Gasoline for a more detailed explanation of gasoline blends).

The RVP is based on a test that measures vapor pressure of the gasoline blend at 100 degrees F. Normal atmospheric pressure varies, but is usually around 14.7 lbs per square inch (psi). Atmospheric pressure is caused by the weight of the air over our heads. If a liquid has a vapor pressure of greater than atmospheric pressure, that liquid boils. For example, when you heat a pan of water the vapor pressure increases until it reaches atmospheric pressure. At that point the water begins to boil.

In the summer, when temperatures can exceed 100 degrees F in many locations, it is important that the RVP of gasoline is well below 14.7 psi. Otherwise, it can pressure up your gas tanks and gas cans, and it can boil in open containers. Gas that is vaporized ends up in the atmosphere, and contributes to air pollution. Therefore, the Environmental Protection Agency (EPA) has declared that summer gasoline blends may not exceed 7.8 psi in some locations, and 9.0 psi in others. The particulars vary, but key considerations are the altitude and motor vehicle density of a specific location.

The EPA publishes a schedule for the RVP transition:

Guide on Federal and State Summer RVP Standards for Conventional Gasoline Only

The schedule varies somewhat from region to region, but in general is as follows. After allowing vapor pressures as high as 15 psi in the winter, the limit drops starting on May 1st:

May: 9.0 psi
June – Sept. 15: 7/7.8 psi

More congested areas and hotter areas will tend to have a limit of 7.0 psi, while cooler climates generally opt for 7.8 psi. Some cooler climates maintain a 9.0 psi limit throughout the summer. One of the disadvantages of having different requirements for different areas is that summer gasoline is less fungible. This can cause price imbalances in different areas, and sometimes prevents product from flowing from one area into another to ease the shortage.

Refiners will start to pull down their inventory of winter gasoline well in advance of the May 1st deadline. On that date, all gasoline in the system has to meet the stricter requirements, and this “summer blend” is costlier to produce because it contains less butane.

Butane, which has an RVP of 52 psi, can be blended into gasoline in higher proportions in the winter because the vapor pressure allowance is higher. There are two advantages in doing this. First, butane is a cheaper blending component than most of the other ingredients. That makes fall and winter gasoline cheaper to produce.

But butane also adds to the total gasoline pool, so that means that gasoline supplies increase in the winter as more butane is added to the mix. Not only that, but this takes place after summer driving season, when demand typically falls off. These factors normally combine each year to reduce gasoline prices in the fall (even in non-election years). The RVP is stepped back down to summer levels starting in the spring, and this usually causes prices to increase.

One misconception some have is that they can save money by buying cheap gasoline in the winter and storing it for the summer. Remember that winter gasoline will pressure up as the weather heats up, and the contained butane will start to vaporize out of the mix. You will end up with less gasoline than you paid for, and that would also contribute to the air pollution problem that summer gasoline was designed to avoid.

If, on the other hand, you were to buy summer gasoline and try to store it until winter, you might find yourself having problems getting the fuel to ignite, due to the lower vapor pressure. This would be like putting a little bit of diesel in your gasoline – not very good for your car.  

Ethanol has a high Octane rating.. 113 so adding it to gasoline improves engine performance.  The drive for increasing fuel efficiency will require higher compression engines which will require higher octane.. So the outlook for ethanol is bright.  E 85 can sell for cheaper than Gasoline as it's sale generates Rin's in excess of the Renewable Fuel Standard which can be sold on the open market hence reducing it's price.  This is good for the environment as Ethanol is a cheaper source of Octane as well as a product that helps provide cleaner air. 

and ethanol is not carcinogenic...  ;-) 

edit add: thanks for the kudo's.. I just linked too good sites together.. as you can see.. Octane is related to outside temperatures as to the source of options..  I believe Butane is still higher than ethanol.. (???) but since the oil companies produce it.. they add "their own" product.. Now you can understand why places like Cali.. which can get pretty darn hot in the summer.. has stricter standards.. PLUS since it doesn't rain as much.. the MTBE toxicity was amplified since it was NOT washed off the driving surfaces as much.. If you fuel up in Cali.. they have a requirement that pumps have a return line to vacume the toxic vapors away from the person filling up..  Maybe a little overkill.. but you try living in the LA basin with it's smog which.. for the most part.. we've fixed.. and ETHANOL was PART of the solution..  I get that Solar farms.. wind farms etc.. and high tech electric powered cars may have an advantage out there.. but I still believe that for the rest of us.. and even out there.. NOT EVERYONE is gonna buy a.. Tesla..  Wanna go pull a pivot out with an electric vehicle??  Watch that mudhole.. although it probably would have great torgue.. till the battery ran down.  Pops bought a hybrid.. ???  Toyota.. Highlander.. which.. really was a TERRIBLE car for the middle of nowhere.. Hybrids work in city traffic.. filling the battery while braking.. and discharging when accelerating.. pops would lug a??  600..800 lbs battery around on his 400 mile excursions back and forth to Colorado.. might as well been carrying a lead anchor for all the good that did..  So Technology may fill a nich.. but.. it's probably not gonna be a universal nich.. at least for awhile..  Not withstanding the capacity of the power grid.. etc.. but golly he was sure proud of it.. One man crusade to save the planet.. yes sir.

anywho.. fwiw.

Cheers.