Ethanol Gasoline Blend Fuels: An Automotive Perspective

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1 Ethanol Gasoline Blend Fuels: An Automotive Perspective By Dean Drake Defour Group LLC Environmental and Energy Study Institute Briefing Protecting Public Health Through Cleaner Fuels and Lower Emissions December 14, 2015

2 Background in Automotive Industry Defour Group LLC Dean Drake: 34 GM Engine design/certification CA regulatory policy Industry/NGO dialogues Dr. Tom Walton: 25 GM Dr. Mike Whinihan: 28 GM Dave Aldorfer: 39 yrs@ GM Air Improvement Resource Tom Darlington: 25 EPA & GM Emissions modeling and analysis Fuels and vehicle testing Expert for auto, fuels & gov t Transportation Fuels Consulting Gary Herwick: 35 GM Emissions & fuels policy Fuel quality and alternative fuels Defour Group LLC 2015 Slide 2

3 What is the Automotive Industry Perspective? To Ensure that the Benefits of Individual Personal Transportation Outweigh Its Cost Purchase Price Operating Cost Social Externalities Performance Utility Convenience Defour Group LLC 2015 Slide 3

4 The Impact of Ethanol Gasoline Blends Today 10% Gasoline Ethanol Blend (E10) In the market since 1970 s Nearly all gasoline today is E10 Refineries: Blend Stock, not Pump Gas Blend stock: 84 AKI octane rating Ethanol added to boost octane Resulting pump gas = 87 AKI octane Question: What is the Public Impact? Cost to consumer Environmental % 10% 5% Fuel Ethanol Billions of Gallons % of Fuel Year Defour Group LLC 2015 Slide 4

5 84 AKI 91 AKI 87 AKI Price Price 84 AKI 113 AKI 87 AKI Ethanol Makes Gasoline Less Expensive Adding Ethanol to Gasoline Price per gallon at source Transportation cost to blender Octane rating Energy density OPIS prices 05 MAY 14 to 30NOV15 Ethanol Regular blend stock Premium blend stock E10 Saves Consumers 4 cents per Gallon $2.20 $2.00 $2.40 $2.20 $2.00 Blending Gasoline + = w/o Ethanol Pump Fuel Defour Group LLC 2015 Slide 5 + Reg. Blend Stock Reg. Blend Stock With Ethanol = Ethanol Pump Fuel Prem. Blend Stock

6 EPAct and the EPA MOVES Model EPAct Test Program Used Blends not Sold to Public EPA: different [results] if splash blends of ethanol in gasoline were utilized EPA s MOVES Model Vehicle Emissions in Real World Problems using MOVES data Does not properly represent spash blended fuels like E15 Particulate Matter Increases No: 5 Vehicles Yes: 10 Vehicles State Implementation Plans EPA: fuel properties interact with vehicle and engine design, controls, and/or calibrations. Required by Clean Air Act Deprives States Tools like E15 Defour Group LLC 2015 Slide 6

7 Percent Change By Adding 10% Ethanol to Gasoline Butadiene Benzene Ethanol Makes Gasoline Less Toxic 10% HC 5% 0-5% -10% -15% Criteria Pollutants Controlled by Regulation CO NOx PM2.5 Uncontrolled Toxic Emissions E10 vs E0 Adapted MOVES to Compare: 87 octane E10 87 octane pure gasoline E10 has much lower: Toxic emissions CO emissions Higher HC, NOx and PM Calibration not fuel? Addressed in Tier 3 by adding an E10 test fuel Defour Group LLC 2015 Slide 7

8 Added Cost Per Vehicle High Efficiency Engine Fully Utilized Technologies Hybrid (Prius) Battery Electric Vehicle (Tesla) Plug-In Hybrid(Volt) Higher Octane Fuel For More Efficient Engines High Efficiency Engine Needed MY 2025 Propulsion Technologies Greater Engine Efficiency = Higher Engine Pressure Engine knock limits pressure Higher octane reduces knock New Engine and Fuel Last Low Cost Way to Reduce CO 2 Higher octane fuel required $20K $15K $10K $5K Current premium gasoline too expensive $0 0% 40% 80% Percent CO 2 Reduction Defour Group LLC 2015 Slide 8

9 Price per Gallon Fuel of the Future: High Octane Mid-Level Blend Ethanol: The Low Cost Way to Increase Octane $2.45 E10 Premium $2.40 $2.35 E30 Super $2.30 Renewable $2.25 Premium $2.20 $2.15 E10 $2.10 Regular $2.05 $ AKI 87 AKI Octane Rating Logical Evolution of Ethanol Blends E10 shows adding ethanol to gasoline: Boosts octane for less money Reduces toxic emissions Reduces greenhouse gas emissions Displaces petroleum use E10 to E30: Pathway to Higher Octane All grades of gasoline have 93 octane New cars use high efficiency engines Legacy vehicles use E10 premium Defour Group LLC 2015 Slide 9

10 Backup Slides

11 Energy Adjusted Savings Per Gallon Cost Per Gallon E10 Input Prices vs Ethanol Benefits May, 2014 Dec., 2015 Hi Oil Lo Oil $3.50 $3.00 Regular Gasoline Blend Stock $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 -$ MAY14 Fuel Ethanol 01 DEC 14 Energy Adjusted Ethanol Benefit $0.15 $0.10 $0.05 $0.00 -$ DEC 15 Defour Group LLC 2015

12 Complications with EPAct Study Used Blends not Sold to Public Gasoline Ethanol Gasoline is Not Oil Blend of compounds extracted from oil Formula affects properties of final product Many different ways to get the same end EPAct blends not the same as pump gasoline From SAE Paper the results would have certainly been different had ethanol replace[d the] aromatics instead of the aliphatics, or if splash blends of ethanol in gasoline were utilized Some Vehicle Emissions Unaffected No PM Increase in 5 Vehicles Vehicle / Fuel Interactions Some PM Increase in 10 Vehicles Ethanol did not increase PM emissions in 1/3 of vehicles tested Suggests that vehicle design may confound impact of fuel differences From SAE Paper Five of the 15 test vehicles showed little or no sensitivity of PM emissions to ethanol fuel properties interact in important ways with vehicle and engine design, controls, and/or calibrations. Defour Group LLC 2015

13 Today s Arguments Aren t Tomorrow s Reality Competition Altered Ethanol s Economics Studies Before 2012 Not Always Reliable API s NERA study Recent CBO report Do Not Use if Written Before 2012 Others Are Recognizing Transformation There has been considerable innovation at existing biorefineries that produce corn ethanol [N]ew processes now integrated into about 80 percent of U.S. corn ethanol plants... [S]witching plant fuel to lower-carbon sources [L]owering the energy use of their plant [I]mproving the starch-to-ethanol yield through the use of corn genetically optimized for ethanol production. from Three Routes Forward for Biofuels, UC Davis, July 24, 2014 Defour Group LLC 2014

14 Neither Oil Nor Ethanol is Perfect Octane Rating Measure of fuel s resistance to pre-ignition Low octane rating limits ability to design high efficiency engines Gasoline High energy density (BTU per gallon) Low octane rating Ethanol Lower energy density Much higher octane rating Ethanol in Gasoline Blends Boost the Octane Rating of Gasoline E10 Saved Drivers $0.06 per Gallon in 2013 Ethanol s Octane Fully Utilized Replace Gasoline e.g., E85 in Flex- Fueled Vehicles Drivers Paid $0.32 per Gallon More for E85 than E10 in 2013 Ethanol s Octane Benefit Wasted Provides Energy Security Benefit = $0.46 per Gallon of Ethanol Used Defour Group LLC 2014

15 Automakers Want Higher Octane For Automakers: High Octane = More efficient high compression engines Common worldwide powertrains Lower CO 2 tailpipe emissions Automotive News Article April 14th Detroit 3: High octane has pluses It s a common-sense thing... We can put in higher compression ratios, and we won t be knock limited Concern: Current High-Octane Premium Gasoline is 30 cents per gallon more expensive than E10 A [high octane] fuel shared with Europe would allow automakers to design common engines which would cut costs. you can t deny the physics. Mercedes Now Testing Vehicles in Germany on High Octane E20/25 Defour Group LLC 2014