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Petrol - $1.40-$1.50/litre by year end?

Re: Petrol - $1.40-1.50 / litre by year end?

10% ethanol blended with petrol is generally accepted in the oil industry as being acceptable for use in vehicles designed to run on unleaded petrol (ULP). This should cause no problems. This is known as E10.

Up to 23% may be used without major fuel system modifications. Using a higher concentration than this will require the replacement of rubber components etc.

100% ethanol is generally not considered to be acceptable for two reasons although it has been used. Firstly, people will drink the stuff. Seccondly, a fire in the open air during daylight hours is literally invisible. Ethanol burns with a pale blue flame. Since ethanol is highly flammable just like petrol, this is a significant safety issue especially at service stations etc. It's a bit hard to extinguish a fire that you can't see!

To overcome the problems with 100% ethanol, a blend of 85% ethanol / 15% petrol is used. This is known as E85. This deliveres most of the benefits of ethanol whilst preventing human consumption. E85 burns with a visible yellow flame just like petrol (but with less black smoke). This overcomes the fire safety issues.

Ethanol in various blends is used in many countries without undue problems. Media reports relating to the negatives of ethanol in Australia some years ago were ultimately a result of some independent fuel distributors suppying petrol blended with more than 23% ethanol, mostly in NSW. Other fuel blending incidents involved adding toluene to petrol. In both cases the motivation to do so is financial (in the case of toluene was purely tax avoidance). These practices will cause damage to vehicles and have unfortunately damaged the reputation of ethanol in general.

At the time of the public concern over ethanol, BP was selling E10 in Brisbane without problems. Demand slumped following the media publicity although the 10% blend that BP were selling appears to have caused no problems.

Ethanol blends CAN be used in two-stroke engines (lawn mowers, outboards etc.) although it is not an indeal situation. Use straight petrol for two-stroke engines wherever possible. (Better still, don't use two-stroke engines wherever possible, especially in urban areas, since they are incredibly polluting. That said, there's not much choice for chainsaws, brushcutters etc. but a four stroke mower will help air quality more than you might expect.)

Ethanol is an oxygenate and thus promotes more complete fuel combustion. To some extent this will offset the lower energy density of ethanol as compared to petrol such that overall volume fuel consumption changes are minimal. Overall energy consumption (no smart comments about energy not being "consumed" - you know what I mean :) ) would fall slightly due to the more complete combustion.

Various US states specify the use of reformulated gasoline (RFG) as a means of reducing vehicle exhaust emissions.. This must generally contain an oxygenate as a legal requirement. Whilst there are various oxygenates, MTBE (produced from methanol which is itself produced from natural gas) has historically dominated the market for financial reasons. Unfortunately, MTBE is particularly persistent as a ground water pollutant and most service station fuel tanks will at some stage leak (this is why you often see drilling rigs around old service station sites even in city areas. They are testing for (leaked) petrol and diesel). The MTBE ground water pollution problem has become serious and has resulted in the phasing out of MTBE as an oxygenate in the US.

MTBE also increases petrol MON and RON ("octane") thus permitting the purchase of lower grade petrol by wholesalers which can be sold as higher grade following the addition of MTBE. A well known Australian service station chain unsuccessfully applied to use MTBE in order to import low grade petrol and increase the octane via addition of MTBE.

Fortunately, ethanol is not only an oxygenate but is an octane booster as well. Ethanol is thus viewed as a replacement for MTBE although it is not the only option.

Point of use emissions will change with ethanol blends as compared to non-blended petrol. Exhaust hydrocarbon (HC) emissions in particular should be significantly reduced due to the more complete combustion. However, evaporative fuel losses during Summer in particular tend to increase. Depending on the location and the relevant standards, the meeting of reed vapour pressure (RVP) requirements is problematic with the use of ethanol blends.

The real environmental concern however relates to resource use and greenhouse emissions. The situation here is somewhat difficult to assess and is also controversial due to the vested interests involved in both sides of the debate.

Whilst the ethanol itself is exactly the same, the environmental and resource situation can be divided into two categories - ethanol produced from waste and ethanol produced from purpose grown crops.

In the case of using waste to produce ethanol, environmental impacts are limited to building the ethanol production plant, electricity to run it etc. They are minimal compared to the petrol consumption displaced such that there is little disagreement that the utilisation of waste in this manner constitutes an overall saving of resources and benefit to the environment.

The situation is very different where crops are grown specifically to produce ethanol. Agriculture is incredibly petroleum dependent. Nitrogen fertilizers are produced directly from natural gas. Most chemicals are produced from oil or gas. Farm machinery runs on oil. Then you have the non-fuel issues such as water, land degradation etc. And then there's moral issues about using land to grow automotive fuel whilst millions overseas are undernourished.

Various studies have been done into the issue. As a rough guide, it has been found that around two thirds of the energy content of the ethanol is used to produce it where crops are purpose grown. So, if you produce enough ethanol to displace 30 litres of petrol at the point of use (car) then it has taken the equivalent of 20 litres of oil (partly in the form of natural gas for fertilizer) to produce it. The environmental economics (as opposed to financial economics) of growing crops to produce ethanol are thus somewhat marginal once land use, runoff, chemicals etc. issues are included.

It has been suggested that the use of wood as an ethanol feedstock would deliver environmental benefits as compared to fast growing crops. I am unable to confirm this since it is fundamentally a debate about forestry versus broadacre farming.

Forestry is a contentious issue although I must point out that most farms are land that was once forested. Regardless of what crop is now grown, in most cases trees were cleared to enable it. Simply growing more trees and then cutting them down again is thus not that different to growing any other crop when viewed this way.

It would seem logical to use forest WASTES to produce ethanol rather than simply burning it in the open as is presently done. This would not affect the number of trees cut in any way but would produce significant volumes of ethanol from an otherwise wasted resource.

Whilst some have suggested using this wood to generate electricity it must be considered that electricity can be produced from numerous resources (coal, nuclear, hydro, solar, wind, geothermal, wave, tidal etc. and of course oil) whereas liquid fuels supply is becomming a far greater problem with most OECD countries (including Australia) affected by faltering domestic oil production and rising imports.

My personal view is that we should use the available agricultural and forest WASTES to produce ethanol as a matter of urgency. This would lead to a relatively low concentration of ethanol being added to petrol which should not cause problems. Benefits to regional Australia would occur due to the ethanol production plants being most economically situated near the source of feedstock. The option of growing crops specifically for ethanol production needs detailed study to increase certainty about the the benefits / disadvantages from a resource and environmental perspective. Such detailed studies should be undertaken as a priority matter IMO.

:2twocents
 
Re: Petrol - $1.40-1.50 / litre by year end?

krisbarry said:
I was watchin' the 20/20 program out of the states last week and its all a myth about high petrol prices. (MEDIA HYPE!) Prices are relative and are cheaper now than they have been for most of the last century. People need to factor in the key word "Inflation" 10 years ago my wage was half of what it is right now, and so were petrol prices. Now I get paid twice as much and pertol prices are twice as much. So go figure...Stop bitchin' and fill up!

Yep agree about the hype but what can you do? it's the market and we're not big enough to influence it. I've heard of an old trick that commodities advisors in the US use, they get a newbie futures client and tell them when it's approaching summer 'driving' season or winter 'heating' season that demand for oil will go up- invariably all the money gets put in at once and that's that. Funny how there is always some excuse for the market to go up, so much for fundamentals, it's all emotion and manipulation, we really only get to react a lot of the time rather than be proactive, thank god for risk management plans.
 
Re: Petrol - $1.40-1.50 / litre by year end?

thanks for that smurf
from the economic and environmental standpoint you mentioned, the cane grown already would go a long way to filling the ethanol demand as most is now exported i believe. If we distributed that sugar to feed starving kids we'd have to train a lot more dentists too! :D Good point though- never thought of that. Philanthropy will come from my back pocket though in time!

From my perspective we could grow more cane with several other good environmental and sustainability factors
- cane mulch is used for improving soils so it doesn't degrade the soil as much as they could.
- From what ive read; cane is a seasonal crop so it can be interspersed with peanut (any legume) plantings to improve soils
- It would be possible to replace existing crops (like bloody stinkin citrus- lost 400k last year for previous owners!) therefore not increasing water consumption/ soil degredation
-Biodiesel would become viable (eventually) which contains 3% ethanol ,generally, which would make it a better proposition

sound good yet? :)

oh and it eliminates deadly carbon monoxide- just CO2 for the cane to suck back up :)
 
Re: Petrol - $1.40-1.50 / litre by year end?

Driving home from work last night and got a rude shock petrol @ $1.25.9 cents, ouch now that has got to hurt!

Just glad I filled up the day b4 @ $1.13.9 and using those trusty woolies vouchers got 4 cents per litre off that price.
 
Re: Petrol - $1.40-1.50 / litre by year end?

krisbarry said:
Driving home from work last night and got a rude shock petrol @ $1.25.9 cents, ouch now that has got to hurt!

Just glad I filled up the day b4 @ $1.13.9 and using those trusty woolies vouchers got 4 cents per litre off that price.
What location are you in?

Price in Hobart last night was 121.9 for regular unleaded, up 3 cents in the past week or so. The recent rises in the oil price have yet to be passed through...
 
Oil 'within striking distance of $70'

Oil 'within striking distance of $70'
No end in sight to 'profound supply-demand imbalances'

Mark Shenk
Bloomberg News with files from The Canadian Press

August 13, 2005


Crude oil rose on Friday to a record high for a fifth straight day, touching $67.10 US a barrel in New York on speculation that increased fuel demand may outpace production.

At least 14 disruptions at U.S. refineries since July 20 increased concern that fuel supplies will be insufficient. U.S. refineries operated at 95 per cent of capacity as they tried to meet gasoline needs, which are heaviest in summer. Prices rose 53 per cent this year as producers failed to make up for declining output at older fields.

"There are concerns that supply is peaking," said Kyle Cooper, an analyst with Citigroup Inc. in Houston.

"Demand is still good and we are having a number of refinery hiccups. There are refinery problems every year but it does appear that they are occurring more frequently than usual."

Crude oil for September delivery rose $1.06, or 1.6 per cent, to close at a record $66.86 a barrel on the New York Mercantile Exchange.

Prices, which rose 7.3 per cent this week, are up 47 per cent from a year ago.

"People fear there won't be enough gasoline at a time when it's so greatly demanded, so they're just buying, buying and buying," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.

"There are profound supply-demand imbalances in the world and I see no sign of them being corrected anytime soon," said Stephen Leeb, who manages $140 million, including an undisclosed number of ConocoPhillips shares, at Leeb Capital Management in New York.

"I think we are in an early inning of a period where high energy prices will dominate the economy."

But some traders said purely speculative buying was a big factor behind the $10 per barrel surge in just over three weeks.

"This is a bubble that will have to burst at some point," said Mike Fitzpatrick, an oil broker at Fimat USA in New York. A large increase in supply or a noticeable dropoff in demand will be needed to end the buying frenzy, he said.

"The confluence of widespread refinery problems and outages in the North Sea and Gulf has raised supply worries," said Jim Steel, director of commodity research at Refco Inc. in New York.

"We are within striking distance of $70, but it's questionable we will breach it with the end of the driving season coming and apparently adequate heating oil supplies on hand."

Boone Pickens, the Dallas hedge fund manager and former oil company executive, predicted oil will reach $75 a barrel in the next 12 months.

Pickens, who correctly predicted in October that oil would reach $60 a barrel, oversees more than $2.5 billion in energy commodity and stock investments.

Natural gas futures soared to their highest point in more than four years as demand for the power-plant fuel, driven by above-normal temperatures, erased an inventory surplus.

Hot weather last week limited U.S. inventory gains to 43 billion cubic feet, 42 per cent below last year's addition, the U.S. Energy Department said.

That cut a surplus compared with year-ago levels to 0.9 per cent from 2.2 per cent the previous week. Utilities normally build up stockpiles this time of year to meet peak demand during the winter.

"In the next couple of weeks, the surplus will disappear versus last year," said Peter Linder, an energy analyst and senior adviser to DeltaOne Capital Partners, a mutual fund company in Calgary. "Everything's pointing to $10-plus summer gas."

Gas for September delivery soared 28.7 cents, or 3.1 per cent, to $9.588 per million British thermal units on the New York Mercantile Exchange, the highest closing price since Jan. 9, 2001. Prices rose 10 per cent for the second consecutive week.

The contract reached $9.91 during the session, the highest intraday price for a contract closest to expiration since gas rose to a record $11.899 on Feb. 25, 2003.

WHAT'S NEXT?

- A Bloomberg survey on Friday showed 39 of 70 analysts and strategists, or 56 per cent, said oil prices will gain next week. Twenty-four, or 34 per cent, said prices will fall and seven forecast little change.

- Last week, 24 of 48 respondents said oil would fall. Nineteen of the past 32 surveys have correctly forecast the market's direction.
 
Re: Petrol - $1.40-1.50 / litre by year end?

And rising..........
Doesn't seem as if it'll get any better - so we need to adjust and be thankful that we're not paying European prices.
Just paid the equivalent of $2.50 a litre in UK and Europe.
 
Re: Petrol - $1.40-1.50 / litre by year end?

Could these increases also hit Autralian Car manufacturers? These V6s guzzle compared to European counterparts? COuld be rocky times ahead for them.
 
Re: Petrol - $1.40-1.50 / litre by year end?

Definitely more economical cars on the roads in Europe - though I believe we're so different a mentality here that the gas guzzlers will survive. We have long roads - want comfort and get over the shock of price rises pretty quickly! Too easy going by far!
 
Re: Petrol - $1.40-1.50 / litre by year end?

I agree. But it is funny. SOme of those european cars are just as perfoming and need a third less fuel. Last time this happened didn't ford have to bring out a 4 cylinder version of the falcon or was that the camry?
 
Re: Petrol - $1.40-1.50 / litre by year end?

Profitseeker said:
I agree. But it is funny. SOme of those european cars are just as perfoming and need a third less fuel. Last time this happened didn't ford have to bring out a 4 cylinder version of the falcon or was that the camry?
Plenty of 4 cylinder camrys. Yes, performance and economy can be totally unrelated.
Wake up time!
 
Re: Petrol - $1.40-1.50 / litre by year end?

Profitseeker said:
I agree. But it is funny. SOme of those european cars are just as perfoming and need a third less fuel. Last time this happened didn't ford have to bring out a 4 cylinder version of the falcon or was that the camry?
Camrys were 4 cylinder for a long time. I think you're thinking of the 4 cylinder Commodore in the early 1980's?
 
Re: Petrol - $1.40-1.50 / litre by year end?

France, Germany, Belgium and the Netherlands are planing in lowering public taxes for gasoline and diesel to cope with the high oil prices that is pushing up transportation costs.
First pain signal!!! :swear:
 
Re: Petrol - $1.40-1.50 / litre by year end?

Smurf1976 said:
Camrys were 4 cylinder for a long time. I think you're thinking of the 4 cylinder Commodore in the early 1980's?

Yep. that is the one. Apparently they were flops.
 
Re: Petrol - $1.40-1.50 / litre by year end?

People in V8's, Large 4x4's etc used to point at me and laugh as I drove around in my little Ford Ka.

Hmm, I think the tables are turning.

Payback Suckers! :D




Does your car feature in Gran Turismo 4?
 
Re: Petrol - $1.40-1.50 / litre by year end?

Profitseeker said:
Yep. that is the one. Apparently they were flops.
In short, yes. A relatively heavy car with a seriously under powered engine that didn't actually save that much fuel. Might save the risk of a speeding fine though.

I'm told that Ford are reasonably well prepared to produce diesel Falcons. Depending on the technology of the engine that ought to work reasonably well. Should certainly save a lot of fuel and emissions (compared to present petrol models) without serious on-road performance problems IF they can get it right. :2twocents
 
Re: Petrol - $1.40-1.50 / litre by year end?

Smurf1976 said:
In short, yes. A relatively heavy car with a seriously under powered engine that didn't actually save that much fuel. Might save the risk of a speeding fine though.

I'm told that Ford are reasonably well prepared to produce diesel Falcons. Depending on the technology of the engine that ought to work reasonably well. Should certainly save a lot of fuel and emissions (compared to present petrol models) without serious on-road performance problems IF they can get it right. :2twocents

Indeed, relatively low emission turbo-diesels can be very fuel efficient. I recently read a report where a Peugot TD almost achived the same fuel economy on a long country run as one of the latest Toyota Prius hybrid cars. The big downside to diesel ATM is the PRICE - around $1.30-$1.40 already! ;o(

There is a discount service station in Wodonga selling LPG at around 43c ATM. Maybe more manufacturers should be doing full conversions to LPG or LNG (even cleaner).

A Toyota Prius hybrid converted to a turbo-diesel that is also further converted to run on LPG/LNG would be just the ticket!!! Would cost only a couple of bucks a week to run. For instance, my current Magna 3.5 V6 wagon costs me $75 a week in fuel. A Toyota Prius (running on ULP) would more than halve that to approx. $35. Converted to LPG (this has been done overseas) it would cost about $15. Converted to diesel running LPG (is that possible?) it might drop to less than $10 a week!

That would seriously hurt the big fuel companies so wont ever be allowed to happen, right?

Cheers,

AJ
 
Re: Petrol - $1.40-1.50 / litre by year end?

Aussiejeff said:
A Toyota Prius hybrid converted to a turbo-diesel that is also further converted to run on LPG/LNG would be just the ticket!!! Would cost only a couple of bucks a week to run. For instance, my current Magna 3.5 V6 wagon costs me $75 a week in fuel. A Toyota Prius (running on ULP) would more than halve that to approx. $35. Converted to LPG (this has been done overseas) it would cost about $15. Converted to diesel running LPG (is that possible?) it might drop to less than $10 a week!
From a technical perspective what is needed to get the maximum efficiency from LPG/CNG (there's a few issues with running private cars on LNG, CNG is a bit more practical) is a higher compression ratio than a standard petrol engine. This could be achieved by a relatively simple modification to the internals of the existing petrol engine at the factory (it becomes far less simple outside the factory though it can be done).

So, it should be possible to achieve roughly the same physical volume of fuel consumption using LPG as would be achieved with petrol. Likewise CNG would achieve similar results to LPG.

Practically all LPG conversions do not involve running the engine at optimal compression for that fuel and hence are considerably less efficient than necessary. Simply converting the Prius petrol engine to LPG without internal modification would fit into that category.

It's not all good news though. LPG is a minor component of natural gas and is normally removed for separate marketing although it can be, and in some circumstances is, left in the sales gas ("natural gas") stream. The physical volume of LPG available from this source is largely a function of the demand for natural gas. The other source of LPG is from oil refineries where it is produced from the refining of crude oil.

But production of LPG isn't really the issue. Since it is used primarily as a relatively easy substitute for conventional oil-derived products the price is substantially tied to the oil price. If oil crashes to $10 then at present prices much of the LPG demand would disappear immediately, thus forcing down the LPG price. If oil goes up then conversion becomes far more attractive and in due course the LPG price follows the oil price. There's also a linkage of worldwide LPG prices to natural gas prices in major markets (particularly North America) since any gas price surge encourages producers to cease stripping LPG from their sales gas stream in order to increase the volume of sales gas. And in turn the North American gas market is substantially tied to the oil market via the use of diesel and fuel oil in industry and particularly power generation. Since there are capacity limits to substitution the prices can get out of alignment but in general there's a linkage.

So... LPG may well offer financial benefits but ultimately it is not a solution as such to the fuel situation. It makes sense to use it rather than flaring it as was very common in the past but there are very real limits to available volumes. And by the way, whenever you see a figure quoted for world oil production / use then that figure includes LPG stripped from natural gas since LPG is considered to be oil.

CNG, on the other hand, makes far more sense in the medium term (25 years) since natural gas (methane) is abundant relative to propane and butane (LPG) and crude oil. Of course it's still a limited resource and most of it worldwide is in the Middle East and Former Soviet Union countries so there's still the geopolitical issues. And it's running out fast in North America and the UK. But for the moment it has an advantage over the others in terms of availability. And it will have an even bigger advantage if commercial exploitation of gas hydrates ever becomes reality, but that's another story... :)
 
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