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I'll answer that question.....
What are people waiting for? Looks like one helluva
play that could go huge.
VICI merger with Ethos. This year 100 million in sales to China and Equador alone.
http://www.sandiegomag.com/issues/april05/business0405.asp
Clean Air Act
A small San Diego company is playing a big role in reducing air pollution in Beijing as China clears the air for the 2008 Olympics
By Larry M. Edwards
IN THREE YEARS, when athletes from around the world descend on Beijing for the 2008 Olympics, they can thank a San Diego company for the cleaner air filling their lungs. The same holds true for Shanghai, host of soccer’s World Cup in 2010.
The cleaner air will be due in large part to a fuel additive produced by Ethos Environmental Inc., near the Mexico border in San Diego.
Dubbed Ethos Fuel Reformulator, or EthosFR, the additive is an ester-based product that significantly reduces vehicle exhaust emissions by lubricating and cleaning engines that burn gasoline, diesel fuel or gasohol (a blend of gasoline and ethanol similar to that now required in Southern California).
“With the Olympics coming to Beijing, we want to show the world we are doing something to help the environment,” says Yi Li Wang, who, as chairman of human resources, is the highest-ranking woman in the Chinese government. She is also executive chairman of Globalization Economic Cooperation & Promotion Network Ltd., a company half-owned by the Chinese government.
“We are spending a lot of money on the Olympics,” says Wang, who was in San Diego in February to meet with Ethos executives. “We are confident that EthosFR will improve air quality for the event.”
But before they tackle Beijing’s infamous air pollution, the highly polluted Yangtze River region will benefit first. Emission standards have been adopted for the small container ships that ply the Yangtze and other rivers in China. Previously, the ships were unregulated and belched plumes of hydrocarbon-laden smoke, polluting the surrounding air. Although the use of EthosFR has not been mandated, so far it’s the only additive the government has approved for use, and a production facility in China is in the works.
About a dozen products were tested, but only Ethos passed muster. “Ethos is a natural, nontoxic product,” Wang says, “and has no afterburn” —meaning it does not create any additional emissions, as do petrochemical-based additives and ethanol. What’s more, it’s been found to reduce fuel consumption enough to pay for itself.
“The air-quality regulations in China were comparable to the 1950s in the United States, so we are a solution for them,” says Ethos president Enrique De Vilmorin. “If you take 15 percent off the emission rolls in any city, you’re going to make a difference.”
He expects to reduce emissions by much more, however. The product is formulated to reduce exhaust emissions 30 to 40 percent, and at least one company in San Diego has achieved emission reductions of nearly 80 percent in some of its equipment.
The ester-based EthosFR cleans and lubricates an engine’s internal parts without using petroleum-derived solvents. It acts like soap, removing carbon deposits and reducing friction.
This improves engine performance, reducing fuel consumption as well as harmful emissions. One ounce treats 10 gallons of fuel.
“It’s ashless,” De Vilmorin says, explaining that 99.99 percent of the patented product is consumed during engine combustion. In fact, emission tests show a significant increase in oxygen levels from engines with EthosFR in the fuel, further improving air quality.
Of the company’s name, De Vilmorin explains, “We’re an ethical company that has ethical customers, and we sell ethical products.
In addition to China, EthosFR is used in Thailand. In South America, Ecuador will begin adding it to fuel supplies in June to reduce air pollution in Quito. Peru and Chile are expected to follow suit later in the year, and a pilot program is under way in Mexico City.
ETHOS ENVIRONMENTAL is not only cleaning the air, it’s cleaning up. The company, which was slated to go public in March, reported $9 million in sales in 2004. This year, the company expects revenue of $100 million from China and Ecuador alone.
Sales in the company’s home country will only be a fraction of total revenue, however. A number of commercial truck fleet operators use the fuel additive, the U.S. Marine Corps adds the product to the fuel burned in its hovercraft, and the U.S. State Department ordered EthosFR for its Humvees in Iraq earlier this year.
But cracking the U.S. market has been difficult. De Vilmorin approached the U.S. Environmental Protection Agency more than a decade ago, hoping to convince federal officials that a product like his would do more to reduce air pollution than adding oxygenates to gasoline, a requirement in some regions since 1990. But he got the cold shoulder.
De Vilmorin says then–EPA chief Carol Browning told him, “You’re never going to get the U.S. government to mandate a product from one single company. It must be market-driven.”
Never mind that it’s environmentally safe, unlike the oxygenate MTBE (methyl tertiary butyl ether), which has since been banned, and ethanol, which reduces hydrocarbons but has been shown to increase the level of ozone, a primary component of smog.
The California Air Resources Board (CARB) contends that gasoline oxygenates are unnecessary with today’s emission-control technology. The state has been requesting an oxygenate waiver since 1999 —including an effort last year by U.S. Senator Dianne Feinstein—but the EPA says it needs to conduct more tests, says CARB spokesman Jerry Martin.
Martin says the Air Resources Board would prefer not to have any fuel additives, but it must consider all alternatives available to reduce air pollution, most of which now comes from diesel-powered vehicles. Meanwhile, the Midwest ethanol lobby, funded by Archer Daniels Midland Company and a handful of other large ethanol producers, continues to push Congress to mandate increased use of ethanol, the production of which is subsidized by the federal government and some states.
Ethanol, which typically costs about 50 cents a gallon more than gasoline at the wholesale level, adds about 4 cents to the cost of a gallon of gasoline to California drivers, and that’s after deducting the roughly nickel-per-gallon federal excise tax credit to oil companies that add ethanol to their gasoline, a de facto requirement since January 1.
DE VILMORIN SAYS he doesn’t expect to be granted a monopoly by the EPA. He’s willing to compete in the marketplace, although to his knowledge he has the only such ester-based product. But he’s convinced that this type of product will go further toward meeting federal and state air-quality standards—which will tighten again in 2010—than do current policies.
Ethos has a growing cadre of U.S. supporters. Among them is Jerry Schnitzius, general manager of Pacific Waste Services, the San Diego division of Houston-based Allied Waste Industries, the second-largest trash collection company in the nation. Locally, the company operates a fleet of trucks as well as the heavy equipment at the region’s landfills. It’s been using EthosFR for four years. Other Allied operations around the country also use the product. It pays for itself not only in lower fuel costs but reduced maintenance by extending engine life and increasing the likelihood of a vehicle passing state-mandated smog tests, Schnitzius says.
“It’s like gold,” he adds. “By combining it with biodiesel, it reduced emissions from our trucks by 64 to 66 percent, and after we added it to the crankcase oil, it improved another 12 percent.” The company’s cars have shown a 10 percent improvement in gas mileage. “It saves us money. It’s also the right thing to do,” Schnitzius says, noting that neither he nor the company has any financial interest in Ethos Environmental.
With more operating capital available through foreign sales, De Vilmorin plans to ramp up domestic marketing by partnering with national retailers, such as auto parts stores and supermarket chains. Consumers will save money at the pump, and it will help their vehicles pass smog tests, he says.
The irony does not escape De Vilmorin: “We had to go to China to open up the U.S. market.
http://www.ethosfr.com.
© 2005 San Diego Magazine
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