Advantages and Disadvantagesof Using Ethanol:

The Consumer Viewpoint

Ngo Anh-Thu Graduate student

andGale West

Professor, Director of Consumer Science Programs

AIEA2 International Conferenceand WORKSHOP of the CAESLaval UniversityQuébec, Québec, August 24, 2004

On today’s menu…..

Introduction Brief review of consumer perceptionsDisadvantages of using ethanolAdvantages of producing & using

ethanolConclusions & 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. consumersBest 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% 100% 120%

Negative cost considerations to consumers

(Fuel Economy Guide 2004, U.S. Department of Energy)

E85 costs 33% more to consumer’s annual budget:

Fuel use Annual fuel cost

ChryslerChrysler E85 $1323 U.S.(Sebring convertible) gasoline $ 900 U.S.DodgeDodge (~ Mercury) E85 $1323 U.S.(Stratus 4 door) gasoline $ 876 U.S.GMC Sports CarGMC Sports Car E85 $1874 U.S.(1500 Yukon 2 WD) gasoline $1312 U.S.

Negative cost considerations (Canada)

In Quebec, E5 is available at certain service stations. Regular gasoline E5 (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 E10, 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 Agri- product transporttransport

Positive health and political impacts

Health impactsReplaces 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 agri-

products, 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, - E10 can reduce GHG by up to 3.9%; - E85 can reduce GHG emissions by 37.1%;

If ethanol production can be expanded to 1 billion litres per year by 2010,

- E10 can reduce GHG by up to 4.6%.- E85 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 E6 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 E10 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)

E85 costs 33% more to consumer’s annual budget:

Fuel use Annual fuel cost

ChryslerChrysler E85 $1323 U.S.(Sebring converible) gasoline $ 900 U.S.DodgeDodge (~ Mercury) E85 $1323 U.S.(Stratus 4 door) gasoline $ 876 U.S.GMC Sports CarGMC Sports Car E85 $1874 U.S.(1500 Yukon 2 WD) gasoline $1312 U.S.Chevrolet Sports CarChevrolet Sports Car E85 $1874 U.S.(C1500 Silverado 2WD) gasoline $1401 U.S.