Posted from this link, ethanol is a great fuel alternative for vehicles, heaters, and small engines.

How to Make Ethanol
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By Jared Skye

Ethanol is a fuel that can be manufactured easily by anyone with some basic materials and a little common sense. Made easily with commonly-available materials, it can also have a genuine impact on your fuel bill. However, there are also disadvantages. This means it is important to do your research to help you decide if it will work in your situation.
Materials to Manufacture Ethanol at Home

There are many different materials that you can use to create ethanol.

One (1) 20 gallon plastic barrel with a lid
One (1) 10 ounce packet of brewer yeast or distiller yeast
One (1) stirring paddle
Forty (40) pounds of sugar
One (1) still

Steps for Making Ethanol

Making ethanol does not require many steps before you are ready to use it.

Mix Your Sugar Solution

The ethanol will begin as a simple solution of sugar and water. The water should be roughly 100 degrees Fahrenheit to ensure that all of the sugar melts. Fill the barrel half way and pour in the sugar at 10 pound intervals until it is all used. This will make the solution easier to mix. Once the sugar is fully dissolved, you can fill up the barrel with hot water until it is nearly to the top. Once the mixture is at roughly 80 or 90 degrees, you can mix in the yeast. Loosely affix the lid of the barrel. If you let the lid sit on the barrel loosely, then it will allow carbon dioxide to escape during the fermentation process without letting in dirt and bugs. Set the mixture in an area that has a consistent temperature of 70 degrees.

Let Nature Take Over

Fermentation will occur over the course of a week. During this time, the yeast is consuming the sugar that you've mixed in the water. As the yeast eats the sugar, it produces wastes in the form of alcohol and carbon dioxide. The carbon dioxide bubbles out of the mixture and needs to be released periodically to keep pressure from building up. This is why you put the lid on so loosely. These bubbles will also function as an indicator of when the fermentation process is complete. Once your mixture stops bubbling up with carbon dioxide, the process is finished.

Filter the Solution

There will be some wastes to filter out after fermentation is complete. Bugs and dirt can sometimes get into the mixture, but you will mostly need to filter out all of the dead yeast.

Distill Your Solution

What you will be left with is a mixture of dead yeast, water, and ethanol. To get the ethanol out of this mixture, you need to use a still to distill it out. There are many different types of stills and you can even make your own. The distillation of your solution should yield you a rough 3:1 ratio of original solution to finished ethanol.

Dehydrate Your Ethanol

The ethanol that you are left with after the distillation process will still have a minor impurity of water inside of it. To remove this water, you need to use a specialized fuel filter that can filter the water out. These filters are made out of specially-designed fabrics that allow ethanol molecules to pass through while trapping the water.

Using Home Ethanol

You will have to take a few precautionary steps in order to use your finished ethanol. First of all, you will have to make sure that there is no plastic or aluminum anywhere along your fuel system. Ethanol is highly corrosive to these materials. Also, you will have to either convert your engine to use ethanol or you will have to mix it with gasoline. Most commercially available ethanol and gasoline mixtures use a ratio of 85% ethanol to 15% gasoline. Gasoline and ethanol have different octane ratings and most car engines are built to utilize gasoline. If you're not sure about using ethanol in your vehicle, double check with the manufacturer before you fill up your tank.

Legal Issues in Home Ethanol Production

To make ethanol in your home legally, you will need to apply for a Fuel Plant Permit from the Bureau of Alcohol, Tobacco, and Firearms. This permit is required even if you are not intending to sell ethanol or produce large-scale quantities of it. It is a criminal offense to produce ethanol in your home without this permit. People in countries outside of the United States of America should check their local regulations regarding the home production of ethanol.
Putting It All Together

Knowing how to make ethanol will allow you to save money in more ways than just your car. It can be used in lawn mowers, and other gasoline powered tools. Ethanol can also be used in gas powered generators when mixed with gasoline. Be sure to research your engine and follow manufacturer's suggestions for best results.