It is not a flex fuel engine and as far as the poor MPG, my only guess would be the low speed rear gears. I traded a 2005 Colorado crew cab 4X4 with the inline 5 for this one and it didn't get that great of gas mileage either.
Hey GM, how about a hybrid for the 5.3 in the next Colorado?
We ought to be able to express our wishes since we now own a part of GM, right!!!

Mark