Phase separation occurs in E10 gas, when only 0.5% water or 3.8 teaspoons water per gallon of fuel is absorbed.
When phase separation occurs, 2 layers (sometimes 3) of liquid are visible. An upper ethanol-deficient gasoline layer and a lower ethanol-rich (up to 75% ethanol) water layer. Most marine engines draw fuel from the lower portion of tank.
Ethanol alcohol is a great solvent and cleaner, that can dissolve engine parts (rubber, plastic, aluminum, and certain fiberglass tanks), dry out hoses, remove lubrication, and more.
Engine seals and hoses shrink, swell, or lose strength when exposed to ethanol reformulated gasoline.
The amount of ethanol blended in at the pumps, is not closely monitored. Checking gasoline meets safe and legal alcohol guidelines (10% or lower), seems necessary now, until more stringent and protective laws are passed.