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ethanol & lead: a story of market failure



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Sometime ago some postings discussed the use of ethanol
as a petrol substitute. The use of ethanol in motor fuels has
a long history- starting with the invention of the internal combustion engine-
but a very recently uncovered story involving the use of ethnol as an
anti-knock

agent  makes fascinating reading and a great illustration of how in this case
market forces and the profit motive did NOT work for the greater good but
exactly the opposite to the greater detriment of the majority public, with the
worst excesses- collusion, monopolies, and squashing of competition- clearly
demonstrated.

The entire article by Jamie Lincoln Kittman can be seen at
 http://www.thenation.org/issue/000320/0320kitman.shtml
It makes fascinating reading.

For those lacking the net bandwidth or patience to read the entire article
[it runs about 10 pages], my [rather long] synopsis:

Petrol when used in internal combustion engines usually contains an
'anti-knock'

additive. This allows engines to have higher compression ratios resulting in
higher efficiency. The problem of knocking first became important as early as
1912 and research commissioned by general motors came up with two effective
antiknock additives: ethanol and tetra-ethyl lead. Contrasting the two,
ethanol
was cheap and easy to produce and very effective [it is currently in use
throughout the US and W. Europe], tetra-ethyl-lead [TEL] on the other hand
caused several problems- it clogged engine valves necessitaing the addition of
'scavenger' compounds containing bromine which are both toxic and corrosive to
engines and exhaust systems, and worst of all, TEL itself is extremely
toxic and

its addition to petrol causes the release of lead into the air and soil
leading
to toxic buildups in humans. The toxic properties of lead have been known for
over 3000 years in writings describing symptoms among lead smelters consistent
with what we now know to be the nerve/brain damage caused by exposure to lead.
More significant to this story, unlike ethanol that anyone can make with a
backyard still, the manufacture of TEL was patentable and hence more
profitable.

Based on internal memos, General Motors [GM] had every intention of furthering
engine efficiency by the use of ethanol, however, by 1920 the duPont chenical
company, awash in gunpowder profits from world war 1 had acquired a
controlling
interest in the fledgeling GM and pushed for the profitability of TEL despite
the problems. Later the Rockefeller oil company Standard Oil came up with a
manufacturing process that was better and the manufacture of TEL was spun
off to
a corporation jointly controlled by DuPont, GM, and Standard Oil.

Disasters followed- several workers died in the manufacturing plants in
separate

incidents and many more were disabled. The principals denied any danger
from the

use of lead and with few exceptions managed to buy or persuade all reserachers
studying the effects to produce pseudo-science favorable to them by
undertaking
to fund their research and threats to exercise influence in having them fired,
as well as to co-opt public health agencies from passing regulations or
publishing reports detailing the dangers of the use of lead. This continued
for
over 50 years and hired hacks of the lead industry continue to present the now
completely discredited data.

The phaseout of leaded petrol resulted from public not market pressure when in
the 70's rising concerns about air pollution from auto exhausts required
the use

of catalytic converters which could not operate with leaded fuel.

Significantly for India, leaded fuel continues to be used, as it does in
most of

eastern europe and south america. According to the World Bank, 1.7 billion
urbanites in developing nations are in danger of lead poisoning, including
neurological damage, high blood pressure and heart disease from airborne lead,
90 percent of which is attributable to leaded gasoline. Excessive exposure to
lead causes 200,000-500,000 cases of hypertension in the Third World, with 400
deaths per year attributable to lead exposure in the late eighties.

The result of the phaseout on US autos has been significant- fewer oil changes
are necessary, engine life has tripled, exhaust system life similarly
extended.
This is before the significant measurable heath benefits have been accounted
for. Blood-lead levels have dropped by a factor of 6.

This resulted not from market forces motivated by profit but from public
interest represented and enforced through government. For those who advocate
completely un-regulated 'free-markets', this story poses a counter argument.




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