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Advantages and Disadvantages of Using Ethanol: The Consumer Viewpoint Ngo Anh-Thu Graduate student and Gale West Professor, Director of Consumer Science.

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Presentation on theme: "Advantages and Disadvantages of Using Ethanol: The Consumer Viewpoint Ngo Anh-Thu Graduate student and Gale West Professor, Director of Consumer Science."— Presentation transcript:

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2 Advantages and Disadvantages of Using Ethanol: The Consumer Viewpoint Ngo Anh-Thu Graduate student and Gale West Professor, Director of Consumer Science Programs AIEA2 International Conference and WORKSHOP of the CAES Laval University Québec, Québec, August 24, 2004

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

4 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.

5 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;

6 But what are the alternatives?  Future energy choices of U.S. consumers Best fuel for future Worst fuel for future - Electricity52%15% - Ethanol21%28% - Hydrogen15%27%  Future choices for reducing oil imports - Making energy efficient vehicles48% - Tax rebates for higher efficiency vehicles24% - Higher taxes on less efficient vehicles11%

7 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.

8 Disadvantages of ethanol

9 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 converter100%120%450% After converter100%100%120%

10 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 Chrysler ChryslerE85 $1323 U.S. (Sebring convertible)gasoline$ 900 U.S. Dodge Dodge(~ Mercury) E85 $1323 U.S. (Stratus 4 door)gasoline$ 876 U.S. GMC Sports Car GMC Sports CarE85 $1874 U.S. (1500 Yukon 2 WD)gasoline$1312 U.S.

11 Negative cost considerations (Canada)  In Quebec, E5 is available at certain service stations. Regular gasoline E5 (5% ethanol blend) 88.3 ¢/litre91.3 ¢/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.

12 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.

13 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.

14 Advantages of ethanol

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

16 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.

17 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.

18 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.

19 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.

20 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.

21 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.

22 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.

23 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.

24  Merci beaucoup de votre attention!!

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26 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.

27 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 Chrysler ChryslerE85 $1323 U.S. (Sebring converible)gasoline$ 900 U.S. Dodge Dodge(~ Mercury) E85 $1323 U.S. (Stratus 4 door)gasoline$ 876 U.S. GMC Sports Car GMC Sports CarE85 $1874 U.S. (1500 Yukon 2 WD)gasoline$1312 U.S. Chevrolet Sports Car Chevrolet Sports CarE85 $1874 U.S. (C1500 Silverado 2WD)gasoline$1401 U.S.


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