The E85 cars can actually run on 100% Ethanol.
The reason they add 15% gasoline to it is for starting purposes. Pure Ethanol is hard to start in the cold weather. (You guys in Sweden should know this!).

In Venesualla, all of the cars run on 100% Ethanol. (It's hot down there!)



Ethanol is 100 octane but it is true it does have less energy, gal per gal ( or Liter per Liter ). so gas milage with E85 will be lower than pure gasoline. Depending upon where you are in the world, prices for E85 may be the same or a little lower than regular gas. However, you need to consider the reduced milage.
The advantage is that it reduces the amount of oil that is imported and supports local farmers.

I don't know why an E85 fire would be so different that gas. In fact, you can put out and alcohol fire out with plain water! It is much more safer that regular gas.