Advantages and Disadvantages of Using Ethanol The Consumer

Advantages and Disadvantages of Using Ethanol: The Consumer Viewpoint Ngo Anh-Thu Graduate student and Gale West Professor, Director of Consumer Science Programs AIEA 2 International Conference and WORKSHOP of the CAES Laval University Québec, August 24, 2004

On today’s menu…. . ¬Introduction ¬Brief review of consumer perceptions ¬Disadvantages of using ethanol ¬Advantages of producing & using ethanol ¬Conclusions & strategic implications

Why ethanol in Canada? ¬The Kyoto Protocol commitment: - by 2012, Canada has to return to 94% of its 1990 GHG emission level. ¬Canadian greenhouse emissions: - 73% from fossil fuel combustion; - 25% from on-the-road transportation.

Consumer perceptions today ¬In Canada - 86% of the population is concerned by the level of foreign oil imports & wants to reduce this dependence to foster national security; - 80% of the population is aware of climate change; - 78% of Ontarians agree to buy ethanol blend IF the price of the ethanol blend equals that of gasoline. - 72% of Ontarians support a mandate to blend ethanol into gasoline;

But what are the alternatives? ¬ Future energy choices of U. S. consumers Best fuel for future Worst fuel for future - Electricity 52% 15% - Ethanol 21% 28% - Hydrogen 15% 27% ¬ Future choices for reducing oil imports - Making energy efficient vehicles 48% - Tax rebates for higher efficiency vehicles 24% - Higher taxes on less efficient vehicles 11%

Practical consumers are ¬ Not that altruistic! ¬ They are mostly concerned with: - Traffic congestion (34%) - Availability and/or price of gasoline (28%) - Global warming (14%) - Local air pollution (12%) ¬ However, climate change and air pollution are important to some consumers.

Disadvantages of ethanol

Negative environmental and health impacts of ethanol ¬ Aldehyde, a function of ethanol volume, is a threat to nose, eyes, throat & possibly causes cancer. ¬ At volumes below 23% ethanol, aldehyde emissions can be well controlled by the catalytic converter: Gasoline Gasohol Ethanol Aldehyde (0% ethanol) (22% ethanol) (100%) Before converter 100% 120% 450% After converter 100% 120%

Negative cost considerations to consumers (Fuel Economy Guide 2004, U. S. Department of Energy) ¬ E 85 costs 33% more to consumer’s annual budget: Chrysler (Sebring convertible) Dodge (~ Mercury) (Stratus 4 door) GMC Sports Car (1500 Yukon 2 WD) Fuel use E 85 gasoline Annual fuel cost $1323 U. S. $ 900 U. S. $1323 U. S. $ 876 U. S. $1874 U. S. $1312 U. S.

Negative cost considerations (Canada) ¬ In Quebec, E 5 is available at certain service stations. Regular gasoline E 5 (5% ethanol blend) 88. 3 ¢/litre 91. 3 ¢/litre ¬ In Canada, since the cost of making ethanol is still high, ethanol prices at the pump are a function of % ethanol in the blend.

Negative technical dimensions ¬ Driving ability of ethanol is lower. - Lower per litre energy value (EV); - Takes more to drive the same distance; - Consumers have to fill their cars more often; - And they have to pay more for ethanol fuel. ¬ When blended above E 10, consumers : - Driving regular cars have to pay at least $1, 200 U. S. to have their engines adapted; and - Have to drive extra distances to special service stations to buy ethanol.

Negative technical dimensions (cont. ) ¬ Ethanol can absorb water & if water enters the fuel tank - It dilutes ethanol, reducing its value as a fuel; - It causes problems with corrosion and phase separation in the gasoline mixture. ¬ Ethanol dissolves almost everything. - It absorbs and carries dirt inside the fuel lines and fuel tank, thus contaminanting the car engine system. ¬ Ethanol is rich in octane content. - It is highly flammable and explosive compared to gasoline. - It requires more attention to handle in daily life.

Advantages of ethanol

Postive environmental impacts: Life cycle analysis (National Renewable Energy Laboratory, U. S. Department of Energy) Agri- product transport

Positive health and political impacts ¬ Health impacts Replaces bad gasoline additives (MTBE and lead), which are sources of surface and ground water contamination, and dangerous to human health; ¬ Political impacts to consumer-voters - It potentially replaces crude oil, which is a finite, non-renewable resource; - It can be domestically produced, thus reducing dependence on oil imports; - It can potentially cut oil import costs.

Positive socio-economic impacts ¬ Ethanol uses agri-products as a feed-stock; ¬ It is a renewable source of energy, which can replace fossil fuel in the future; ¬ It increases value added and price of agriproducts, ¬ which increases net farm income; ¬ It creates more jobs in the rural sector; ¬ Strengthens rural economies; ¬ It can potentially reduce government subsidies to the farm sector.

Positive impacts on greenhouse gases ¬ In Canada today, compared to gasoline, - E 10 can reduce GHG by up to 3. 9%; - E 85 can reduce GHG emissions by 37. 1%; ¬ If ethanol production can be expanded to 1 billion litres per year by 2010, - E 10 can reduce GHG by up to 4. 6%. - E 85 can reduce GHG emissions by 44. 5%; ¬ With respect to the Canadian Kyoto commitment - These figures represent approximately 0. 8 - 1. 0% of the total reduction required.

Positive impacts on exhaust emissions ¬ How ? - Ethanol, richer in octane, promotes more complete combustion of gasoline thus reducing exhaust emissions. ¬ Without catalytic converter, compared to gasoline: - Using E 6 lowers CO emissions by 27%; and - Also lowers other harmful emissions (ex. , HC, PM, VOC & SOx). ¬ However, with the catalytic converter : - Almost no difference in exhaust emissions between gasoline and ethanol blends.

Positive technical dimensions ¬ High octane content gives particular value to consumers using high performance engines. ¬ When used as a gasoline additive, ethanol is - not as poisonous as MTBE and lead, - a soluble deposit-controler, removing impurities in the fuel system and placing them in the filter; - an anti-icer, preventing fuel-line freeze up in the winter, and requiring less time (and energy) to start the vehicle; - richer in octane, an anti-oxidant to reduce gum formation in stored petrol.

Conclusions and strategic implications ¬ Given increasing consumer interest, there is a definite need to inform consumers of the advantages of ethanol. ¬ Changing consumer choice to ethanol can: – reduce dependence on foreign oil; – reduce local pollution and clean the atmosphere; – help respect Kyoto GHG commitments; – slow climate change; – provide a more renewable fuel source.

Conclusions and strategic implications (cont. ) ¬To overcome disadvantages (higher price, lower driving ability), the Canadian government should in the short run : – Provide price subsidies and/or consumer tax credits (as in Brazil, US, EU, China); – Limit ethanol blends to E 10 or less, to avoid massive engine reconstruction.

Conclusions and strategic implications (cont. ) ¬In the long run, the government should – promote technical research in ethanol production; – instate an education campaign to inform consumers of the purpose and benefits of ethanol. ¬The automobile industry will react to growing future demand for ethanol by producing new car engines.

¬Merci beaucoup de votre attention!!

Technical definitions ¬ In vehicles, ethanol can be used as: - a gasoline additive (blended into gasoline at 10% or less); - gasohol (blended at high volume of 20% to 85%); or - a high blend ethanol (blended at 85% up to 100% pure ethanol). ¬ Technical limit : Regular cars can handle up to 10% ethanol without engine reconstruction.

Cost considerations to consumers (Fuel Economy Guide 2004, U. S. Department of Energy) ¬ E 85 costs 33% more to consumer’s annual budget: Chrysler (Sebring converible) Dodge (~ Mercury) (Stratus 4 door) GMC Sports Car (1500 Yukon 2 WD) Chevrolet Sports Car (C 1500 Silverado 2 WD) Fuel use E 85 gasoline Annual fuel cost $1323 U. S. $ 900 U. S. $1323 U. S. $ 876 U. S. $1874 U. S. $1312 U. S. $1874 U. S. $1401 U. S.