Monday, August 26, 2013

Returning to the Roots of Ethanol's Importance

Ethanol Protects Our Most Vulnerable By Providing Cleaner Gasoline.

Critical in forming public opinion on any issue is the use of paradigms -- an explanation "model/view" of how something works. With paradigms it often doesn't matter if the underlying facts/logic are incorrect or not objective (cherry-picked), its only what the Public perceives as correct or true that matters.

With many public perception paradigms there is usually a strong underlying cause as to why certain beliefs can often be so easily accepted -- such as mistrust by Conservatives in "big government" taking away individual freedoms (spawning conspiracy theories). Two current examples of this affecting public health policy are efforts to eliminate fluoride in drinking water (for dental health) and vaccinations (for children's health).

In today's world of mass communication (e.g., the Internet, battle of viewer ratings, etc.), forming public paradigms can be easily accomplished by the use of simple "sound bites" -- where something can be quickly "demonized".

An example of a highly effective quick sound bite demonization is Sarah Palin's use of fruit fly research to define a paradigm of ubiquitous wasteful Government spending (even though this science research is critical in finding cures for genetic diseases in humans, such as childhood autism).
(Click for the sound bite)

In forming public perception paradigms, a highly effective technique is to "cherry pick" aspects of an issue in order to "frame" the public debate -- forcing opponents to always be on the defensive to specific charges/claims. In the current "War on Ethanol" this is exactly what's happening as ethanol supporters constantly find themselves fighting a public perception of another highly subsidized, big-government, and wasteful program.

Ethanol Supporters must recognize that a strategy limited to "only" refuting claims point-by-point (e.g., engine damage, diverting crops for fuel use resulting in high food costs and world hunger, etc.) is not likely to be successful -- something more is needed.

In the classic movie comedy "My Cousin Vinny", a New York City lawyer (Vinny, played by Joe Pesci) defends his cousin on false murder charges in the State of Alabama (a pretty tough place for a Brooklyn lawyer). In one funny scene, Vinny objects to the Prosecutor's question, where the Judge responds to him: "That is a lucid, intelligent, well thought out objection -- OVERRULED!"

Often, even the best of well thought-out and factual arguments can not overcome ingrained prejudices and biases -- especially in today's Red State versus Blue State culture wars.

In the "Court of Public Opinion" on ethanol what is needed is a "Paradigm Shift" to change the playing field. A good starting place is to return to the original public health benefits roots of why ethanol use was needed in the first place:

Octane: Octane is an additive needed to reduce the reaction of unblended gasoline to combust/ignite under pressure in a car's engine cylinder (called anti-knock). Without proper octane levels in gas, engine performance levels will decrease and will cause engine damage. For decades, the principle source of octane was lead, which according to every World Health Organization was resulting in severe health problems (e.g., central nervous system damage, neurological development in children, fertility problems, high blood pressure, kidney damage).

Ethanol has a high octane rating (~113), where the majority of gasoline today is blended with ~10% ethanol (called E-10) to achieve the needed regular grade octane rating level of 87 for proper engine performance:

Ethanol (E-100)
Unblended Gas (E-0)
Gas @ Pump (E-10)

Cleaner Air from Less Smog: If you live in a metropolitan area, have you noticed that there is less smog air pollution (severely impacting lung functions of children and the elderly) than a decade ago? This was accomplished by adding an oxygenate additive in gasoline, making it cleaner burning. First an oxygenate called MTBE (derived from fossil fuels) was used, but was found to be probably carcinogenic (cancer causing). Ethanol has replaced the use of MTBE.

Health Benefits Vs. Costs: While the health benefits (e.g., reducing rates of cancer, child autism, asthma, etc.) of cleaner gasoline from ethanol blending are immeasurable, what is the cost that consumers have to pay for these benefits by using ethanol? To answer this question, we need to look to non-ethanol alternatives for (1) oxygenates (ethers) and (2) octane additives (alkylates).

A first step is to compare the wholesale commodity price of un-blended gasoline (E-0) versus ethanol (E-100) -- where currently, ethanol is trading at a "discount" of $0.92 per gallon (yes, you are reading this right, a discount not a premium).

Commodity Price of Gas Versus Ethanol
(per gallon)
Removing ethanol as the source of a needed oxygenate and octane additives would eliminate this "discount", resulting in an ~9¢ per gallon price increase at the pump (e.g., price difference of $0.92 per gallon times the typical 10% blending ratio). But in doing this, the ethanol-free gas would then have a performance problem as it only contains 84 octane (versus minimum requirements of 87).

To estimate what the additional costs would be to make up for this short-fall in octane level, we can look to current pump prices where the higher octane levels in mid and premium grades are achieved by non-ethanol additives (alkylates, aromatics and reformates).

Comparison of Average U.S. Gas Prices by Octane Grade

(87 Octane)
(89 Octane)
(91 Octane)
Pump Price Per Gallon
Octane Level Vs. Regular
Increased Cost Over Regular

Using the above market data, eliminating ethanol blending in gasoline (for oxygenate and octane requirements) would result in a pump price increase of ~34¢ per gallon:

Consumer Cost Impact:
Increase in Price per Gallon:
Elimination of Ethanol Discount
Non-Ethanol Octane Additives
25¢ (1)
Pump Price Increase
(1) Based on the above pump premiums for mid and premium grades, for each incremental increase in octane level of 1, the increased price is ~8¢.

Thus, contradictory to the paradigm presented by opponents of ethanol (e.g., recent actions by the State of Florida to eliminate blending requirements), ethanol use "reduces" the cost to consumers in achieving health objectives versus other alternatives.

Conclusion: In a culture of increasing ideological divides and short memories (what have you done for me lately?), the ethanol story of health benefits (especially for children) must be re-emphasized and re-told -- and that its just not another "big government" wasteful program shoved down the public's throat.

Also the current myopic view of the environmental community in criticizing ethanol should be taken to task on these health issues. What do they propose to use for the massive octane and oxygenate additives needed to cleanly sustain U.S. transportation?

Only by achieving a fundamental "paradigm shift" in attitudes will the general public even listen to the "point-by-point" argument rebuttals being made in support of ethanol.

Reuters News Article Analysis of Ethanol
Life Without Ethanol
How Stuff Works: How Gasoline Works

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