A Closer Look At Ethanol And Fuel Mileage

Ever since I wrote about ethanol and fuel mileage for the first time I have received emails from readers about how they have experienced larger losses than what can be explained by the difference in the BTU content of ethanol blended gasoline and regular gasoline. A couple of days ago another email came in and I asked permission to republish it here. Below is the email I received on February 4, 2009.

Don't know if you care but I track our two vehicles pretty accurately and
both have now seen 10-12% milage reductions from ethanol inclusion.

RAV 4 pre-ethanol: 25-26mpg month after month in mixed driving. Now 23mpg+-

Ford Focus pre-ethanol: 36-38mpg month after month. Now 33 mpg.

Both cars are standards, the RAV has 194k miles, the Focus 138k miles. Both
maintained consistently, tires rotated every 7,500, neither uses oil, etc.

Both show loss of power as well.

How can this be a positive step forward given the adverse economic and
environmental impacts of ethanol; corn diversion? runoff of pesticides into
water resources, etc.

This email is fairly typical of the emails I have received concerning ethanol and fuel mileage. The first thing I would note is that they always contain a range of mileage on gasoline such as the 25-26 miles per gallon on the Rav 4. We all understand that variables in driving style, weather, mix of city and highway driving and others can effect fuel mileage and that is why people always give a range of mileage. But there is one variable that you don't hear talked about much and that is the BTU content of gasoline.

Most people think that all gasoline is the same. But that just isn't the case. Gasoline varies quite a bit in it's BTU content.

According to the EPA summer gasoline varies from 113,000 BTU per gallon to 117,000 BTU per gallon. That is a difference of 3.4%. Winter gasoline varies from 108,500 BTU to 114,000 BTU. That is a difference of 4.8%.

Unlike gasoline which is mixture of many different hydrocarbons, ethanol is a consistent product. It has a BTU content of 76,100 BTU per gallon. That considerably less than gasoline but the difference between gasoline and gasoline blended with 10% ethanol is generally around 3.5% less BTU. Generally you would expect fuel mileage to mirror the BTU content of fuel.

Since we know that adding 10% ethanol to gasoline raises it's octane level by about 2 points we know that if we are comparing 87 octane unleaded with 87 octane E10 that the base fuel is different. To get 87 octane E10 the fuel supplier would have started with a base fuel that had 85 octane.

So the question is how much of the fuel mileage loss was due to ethanol's lower BTU content and differences in the base gasoline's BTU content?

As I have always said there are variables that the average user cannot control when trying to compare the fuel mileage of one fuel to another. That is why I put more faith in formal studies and less in user testimonials. Formal studies attempt to control as many variables as possible. Studies generally buy ethanol and gasoline separate and blend their own so there is no difference in the base gasoline BTU content. And the formal studies like this one from the state of California have consistently shown between a 1% and 3.5% loss in fuel mileage.

Fleet average fuel consumption increased by 1.4% when ethanol content was increased from the zero to the high level.

And as far as your cars having less power on ethanol. If you are experiencing a decrease in power on ethanol you should have your car looked at by a qualified mechanic. Any fuel that contains oxygen such as ethanol, methanol, nitromethane, and others should result in increased power.

Is The Underwriters Laboratory Biased Against Ethanol?

That is the question being asked by the American Coalition for Ethanol (ACE) in a recent letter from Ron Lamberty, ACE’s Vice President / Market Development, to August Schaefer, UL’s Senior Vice President & Chief Operating Officer.

The Underwriters Laboratory (UL) has made a couple of moves in the last few years that seem to support such a claim. On October 5, 2006 they suspended certification of E85 dispenser even though no safety issues had been reported.

After studying the problem for about a year they issued new requirements on October 16, 2007 for E85 dispensers and began accepting applications for approval. To date no E85 dispenser has received approval. One can only wonder how the lack of UL certified dispensers has slowed the spread of E85 refueling locations but it is fairly well known that Walmart was considering adding pumps at their 300 plus gas stations before certification was pulled.

Now just as the ethanol industry is pushing for ethanol blends higher than 10% to be made legal for use in non flex fuel vehicles, the UL has issued a release saying that current dispensers are only certified for up to 10% ethanol content. This is somewhat odd because a look around their website shows that previously their position had been that dispensers can handle up to 15% ethanol content. Just look at this quote from when they suspended certification on E85 dispensers.

On Oct. 5, 2006, Underwriters Laboratories Inc. (UL) suspended authorization for manufacturers to use UL Markings (Listing or Recognition) on components for fuel-dispensing devices that specifically reference compatibility with alcohol-blended fuels that contain greater than 15 percent alcohol (i.e., ethanol, methanol or other alcohols).

To make matters even worse the UL had this to say in their release.

If new Federal guidelines are established that approve higher ethanol blend levels for public use, UL will review products currently certified under UL 87 to determine whether UL can provide data enabling the authorities having jurisdiction to approve such use.

In other words once the limit is increased we can expect a similar delay in getting new dispensers certified as we have seen with the process the E85 dispensers have gone through. It almost looks like they are trying to slow ethanol's progress.

I have to admit that I have also wondered about the their impartiality because of these things and one other event involving biodiesel. Recently the UL released a statement that B5 biodiesel blends could be used in equipment certified for use with diesel or home heating oil. They really didn't have much of a choice since B5 meets the exact same ASTM specification. To say that B5 couldn't be used under their certification would be to say that the equipment wasn't certified for use with a fuel that it was certified for. So instead they took the opportunity to point out potential issues which they admit are outside of the scope of their standards.

The findings indicated no adverse safety effects. It is acknowledged however that introduction of biodiesel may potentially affect fuel quality, mobilize contaminants in the fuel system, or increase the potential for microbial contamination. These performance issues are outside of the scope of UL standards and certification.

Unless I am reading the signs wrong it looks like The UL has a bias against not only ethanol but biodiesel as well.

VeraSun Energy Obtains Bid from Valero For Five Facilities

VeraSun Energy Corporation today announced that the Company filed a Bid Procedures and Sale Motion in the United States Bankruptcy Court for the District of Delaware seeking authority to sell substantially all of the assets of VeraSun Energy Corporation and 24 of its affiliates through a court-approved sale process.

As part of the sales process, the Company has signed an agreement with Valero Energy Corporation to sell substantially all of its assets relating to the VeraSun production facilities in Aurora, South Dakota; Charles City, Fort Dodge, and Hartley, Iowa; and Welcome, Minnesota; and a development site in Reynolds, Indiana. The Valero purchase agreement provides for a purchase price of $280 million, plus the value of inventory and certain pre-paid expenses, subject to certain customary adjustments. Having entered into the Valero agreement, the Company is now required to hold an auction to determine if other bidders will offer more favorable terms than Valero’s bid, referred to as a “stalking horse” bid.

Under the proposed Bid Procedures, the Company is seeking to sell all of its production facilities and operations in separate or combined transactions. While the Company has received expressions of interest with respect to assets other than those that are the subject of the proposed Valero transaction, the Company has not yet negotiated a definitive agreement to sell any other facilities.

“Given current difficult industry conditions and continued constrained credit markets, we believe that commencing a sale process is in the best interest of Company stakeholders,” said Don Endres, VeraSun’s Chief Executive Officer.

Through the sale process, the Company is offering for sale substantially all of its assets, which may be generally characterized as four distinct operating groups:

• The “VSE Group” consisting of production facilities subject to the Valero bid.

• The “US BioEnergy Group” consisting of production facilities in Central City and Ord, Nebraska; Albert City and Dyersville, Iowa; Hankinson, North Dakota; Janesville, Minnesota, and Woodbury, Michigan.

• The “ASA Group” consisting of production facilities in Albion, Nebraska, Bloomingburg, Ohio, and Linden, Indiana.

• The “Marion Group” consists of the production facility in Marion, South Dakota.

The Company believes it has sufficient liquidity to maintain its production facilities and workforce through the anticipated conclusion of the sale process.

“We continue to be optimistic about the long-term viability of the renewable fuels industry,” added Endres. “Ethanol is a valuable, clean, high-octane, low-carbon fuel that is reducing America’s reliance on foreign oil, creating jobs and stimulating the economy.”

Pursuant to the proposed Bid Procedures, interested bidders must submit qualifying bids by March 13, 2009. If qualifying bids are received, the Company would conduct an auction on March 16, 2009 and, following Bankruptcy Court approval at a sale hearing, expect to complete the asset sales by March 31, 2009, or early in the second quarter, subject to regulatory and other customary closing conditions. The initial hearing for approval of the proposed Bid Procedures is scheduled for February 19, 2009 at 9 a.m. in Wilmington, Delaware.

Rothschild, Inc. is serving as VeraSun’s financial advisor on the transaction and will be managing the sale process. Credit Suisse is acting as exclusive financial advisor to Valero Energy Corporation.

VeraSun and 24 of its subsidiaries filed petitions for relief under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Wilmington, Delaware on October 31, 2008. The chapter 11 cases are being jointly administered under Case No. 08-12606 (BLS). For more information, please visit www.verasun.com.

Source : VeraSun Press Release

Kinder Morgan To Transport Biodiesel By Pipeline

Kinder Morgan Energy Partners said Wednesday it expects to move fuels blended with five percent biodiesel across the South in the Plantation oil products pipeline this year.

The company, one of the largest pipeline companies in the United States, recently moved 20,000 barrels of the blended fuel via a Mississippi-to-South Carolina segment of the line in a test it called a success.

The Plantation line moves oil products from refineries along the Gulf of Mexico to the Southeast. Kinder expects to move the blends, known as B5, to markets in Alabama, Georgia, the Carolinas, and Virginia.

Source : Reuters

Wesley Clark To Join Growth Energy

The Politico is reporting that retired General Wesley Clark will be announced as the co-chair of the ethanol industry group Growth Energy at a press conference to be held tomorrow.

Source : Politico

Growth Energy press release on the announcement.