This is not a new component for gasoline. Gasoline blenders have been using oxygenates in gasoline since the late 1970's. The two oxygenates that have survived to this point in time are MTBE (Methyl Tertiary-Butyl Ether) and ethanol (or ethyl alcohol as it is sometimes called). They were first used to extend the supply of gasoline, and improve octane quality, but in the late 1980's, vehicle testing showed that oxygenates reduced exhaust emissions.
The revised Clean Air Act (CAA) of 1990 required that oxygenates be used in all "non-attainment" areas of the United States. This was good because oxygenates helped to reduce emissions at a time when it was becoming very hard to meet the emissions standards of the day.
MTBE is an ether and is soluble in gasoline. This means that is mixes well with gasoline, and does not separate from gasoline when moisture is present. Normal amounts of MTBE in gasoline are from 11 to 15%, which converts to 2.0 to 2.7% oxygen.
Ethanol is an alcohol, the drinking kind. "Fuel Grade" ethanol usually contains from 1 to 2% gasoline (or some other undesirable components) so people will not be drinking it. Normal amounts of ethanol in gasoline are from 5.5 to 10.0%, which converts to 2.0 to 3.7% oxygen. From a technical point of view, ethanol is less desireable than MTBE. If moisture gets in an ethanol containing gasoline, the moisture causes the ethanol to separate from the gasoline. This is very unsatisfactory.
Both of these oxygenates will contribute to reduced exhaust emissions in carbureted vehicles and in fuel injected vehicles made up into the mid 1990's. The oxygenates will also contribute to increased engine output (horsepower) when the carburetion / injection is adequately to take full advantage of the oxygen in the gasoline.
The increased power comes from the fact that the gasoline containss an oxygen component. It works as if the barometric pressure was higher which provides more oxygen which translates into more power.