UK, 0... I... "ICF has proven intellectual property to enable renewable alternative fuels to be made available at service stations in the same format as regular gas stations.These fuels have federal and state tax benefits which when handed down to the consumer offer 'home grown' secure environmentally efficient fuels at market comparitive prices. Executive Summary A UK-based company, ICF Industries, has developed patented technology to enhance the performance of fuels, including ‘typical’ hydrocarbons as well as environmentally-friendly renewable fuels (see attachments for details of the benefits of ICF fuel additive technologies). This company is reversing into a US Shell to form Fuel Corporation of America (FCA), with the intent of establishing the US market-leading renewable fuel brand. Renewable fuels are currently in limited use in the US, in the following applications: • E10 (10% Ethanol, 90% gasoline; aka ‘Gasahol’), is widely available across the US, and all cars are equipped for this fuel, but its use is still limited based on limited awareness and existing perceptions. • E85 (85% Ethanol, 15% gasoline) is available at 220+ pump locations mainly concentrated in the upper Midwest. Approximately 4million vehicles are currently equipped for this fuel (known as Flexible Fuel Vehicles), and 25% of Detroit’s 2005 production will add to this number. • B20 (blend of 20% soy-based fuel with 80% diesel) is in use in fleets across the country, but has very limited distribution in retail diesel applications. All diesel vehicles can use this fuel. Each of these renewable fuels offers significant environmental benefits and increased octane/cetane, but the fuels suffer from certain performance problems (decreased fuel efficiency, cold-start issues). FCA’s proprietary additive technologies minimize or eliminate these problems, creating fuels with comparable or improved performance relative to standard hydrocarbons at significantly reduced environmental impact. In addition, based on current tax incentives (expected to be in place for many years), the fuels can be priced at comparable or lower pricing relative to hydrocarbon-based fuels. FCA has established a business plan to introduce these renewable fuels to retail locations across the US, utilizing its proprietary technology to enhance the performance of the fuels. The business plan calls for partnering with existing fuel retailers to install new pump stations for the renewable fuels on existing and/or new sites. These retailers will be licensed to distribute the FCA branded renewable fuel/additive packages, sharing in the profit margin of the fuels. Introduction of the branded fuels will begin with a retailer in the Charlotte, NC area. This will be followed by rapid expansion in other states. To facilitate this expansion, FCA has partnered with Alliance Development Group (ADG) to rapidly develop retail outlets for the fuels. In addition, FCA will create a wholly-owned subsidiary to operate retail fuel locations across the US, procured and developed by ADG. This will speed the expansion and provide a source of free cash for additional US and international expansion. In addition, within the first 2 years of operation, it is expected that the business model will be reapplied to countries in Europe and South America, and to China. The DRAFT mission statement for FCA follows: Fuel Corporation of America is the leading worldwide commercial retailer of branded renewable Fuels. Our proprietary technology delivers environmentally-sound fuels with enhanced performance. Use of our fuels and additives decreases dependence on foreign oil, creates opportunities for local economies, and delivers a net-positive environmental balance. Fuel Corporation of America Better for You, Better for Your Country, Better for Your World Obviously, the initial branding is critical to the rapid expansion demanded by the business plan. To that end, FCA is currently working with a US advertising agency (Northlich – Cincinnati, OH) to develop the brand name, logo, and positioning. This will form the basis for the pump design, POS materials, and marketing plans to be executed upon introduction of the fuels in each local market. Funding for the startup will come from a combination of sources. Private placement monies are currently being solicited for the administrative expenses associated with the first 12-18 months of operation. Additional funding will be supplied via share offerings (as needed) following the reverse merger into the shell company currently trading on the US bulletin board. Dilution of the company will be limited by agreements from the majority shareholders to hold 51% of the outstanding shares for a minimum of 2 years and bleed only 10%/annum into the market thereafter. P/E Multiples for the industry average 15, supporting market capitalization in year 2 of approximately $50million, and in year 4 of approximately $400million. Revenue estimates are based on average comparative fuel volume and margins at approximately 125 US retail outlets in year 2, and 300 in year 4. Features and Benefits of ICF Products. Lubricity The additive will adsorb to the sides of the engine fuel system. This has the effect of coating the fuel system and reducing the friction created as the fuel flows through it. The reduced wear on the fuel system will lower maintenance costs on the engine, injectors and pump. In addition, this enhanced fuel lubricity will allow the engine to run with improved efficiency. Detergency Because surfactants are detergents, they will act to constantly clean the fuel system and engine. The detrimental deposits, which occur when using un-additized fuel, are prevented. Therefore the detergency effect, along with lubricity, will have a positive effect on the engine. The greatest effect of the additive is to lower the fuel’s overall surface tension. This allows for improved atomization of the fuel in the induction and combustion chamber, resulting in a more complete burn. The engine is, therefore, effectively maximizing the energy released from the fuel. Toxic Emissions Toxic emissions of carbon monoxide (CO), hydrocarbons (HC) and particulate matter (PM) are the result of incomplete combustion of the fuel in the engine. The improved atomization of the fuel, resulting from the use of ICF’s additives, provides for a more complete combustion of the fuel. As a result the amount of harmful CO, HC and PM emissions are reduced significantly. Greenhouse Gas Emissions Carbon dioxide (CO2) and nitrogen oxides (NOX) are both created by the combustion of fuel in an engine. They are greenhouse gases and contribute to global warming. The increased fuel efficiency and economy resulting from the use of ICF additives, means that less fuel has to be burnt for the same power output. Therefore, for the same power output, compared to un-additized fuel, less CO2 and NOX are released into the atmosphere. ICF’s additive technology also enables the utilization of ethanol in fuels (E85) which, because it is derived from biomass, can lower net CO2 emissions by over 50%. Co-Solvency An exciting benefit of ICF’s additive technology is the ability to hold ethanol and water in gasoline as a stable, homogeneous fuel. This is possible because ICF’s additives are based on surfactant chemistry. This enables the water/ethanol molecules to be distributed throughout the fuel in a stable and homogeneous manner preventing phase separation and enhancing uniform combustion. Microbial Contamination Use of ICF additives in fuel storage tanks and fuel systems helps to prevent microbial contamination. If water is present in the fuel, and phase separation occurs, aerobic and anaerobic bacterial and fungal growths may occur in the aqueous phase. These will then feed at the fuel/water interface and can lead to a contamination of the fuel by suspended organic matter. This can then block filters when drawn through the fuel system. The co-solving effect of the ICF additives prevents phase separation from occurring and eliminates the environment for microbial growth. This will reduce the need for biocides to treat the fuel, which can be expensive and difficult to handle. Corrosion Inhibitors ICF fuel additives are natural corrosion inhibitors. When the additive surfactant molecules adsorb to the side of the fuel system they provide a protective coating, as well as providing lubricity. Also, the ability to co-solve any free water in the fuel, and prevent phase separation, helps prevent any corrosion that may occur due to the aqueous phase. Reduced Maintenance The combined effects of improved lubricity, detergency, corrosion inhibition, and cleaner burn resulting from the use of ICF additive technology extend the service life of the engine while reducing maintenance costs. E85 Frequently Asked Questions Why should we use ethanol? Besides its superior performance characteristics, ethanol burns cleaner than conventional gasoline; it is a completely renewable, domestically produced, environmentally friendly fuel that enhances the nation’s economy and energy security. Today the U.S. imports nearly 60% of its petroleum, and our overall consumption continues to increase. By supporting fuel ethanol and use, U.S. motorists can help reverse that trend. What happens when E85 is not available? The FFV system allows the driver to use any combination of gasoline or ethanol-from 100 percent unleaded gasoline to 85 percent ethanol. A driver can therefore use unleaded gasoline if E85 is not available. What are the differences in an FFV compared to a regular gasoline-only model? Are different parts used? The primary difference is the fuel sensor that detects the ethanol/gasoline ratio. A number of other parts on the FFV’s fuel delivery system are modified to be ethanol-compatible. The fuel tank, fuel lines, fuel injectors, computer system and anti-siphon device have been modified slightly. Alcohol fuels can be more corrosive than gasoline. Therefore; fuel system parts have been upgraded to be ethanol-compatible. Does an FFV cost more than a gasoline-only model? When manufacturers offer a flexible-fuel engine as an option in their vehicles, there is little to no additional cost. In model year 1998, manufacturers began making flexible-fuel engines standard equipment on certain makes and models. What is the range of a flexible-fuel ethanol vehicle? Ethanol has a lower energy density than conventional gasoline. However, E85 also has a much higher octane rating (100+) than gasoline. FFVs are “flexible” and not dedicated to E85 and some drivers may experience a 5% to 15% drop in fuel economy. However, you'll find the economic, environmental and energy security benefits of E85 outweigh any variation. The fuel economy of any vehicle will vary with temperature, road conditions, driving habits and other factors. For comparison purposes, aggressive driving habits can result in a 20% loss and low tire pressure can reduce mileage by 6%. What is the price of E85? E85 prices vary by the market being considered. Typically, E85 is competitive with gasoline. However, as is the case with all forms of fuel, the larger the network of fueling outlets, typically, the more competitively priced is the fuel. Is E85 more toxic or dangerous than gasoline? No. 100% ethanol can be and is ingested by human beings. The fuel ethanol must be “denatured” or poisoned with gasoline or a bitter agent to prevent ingestion. Also, ethanol does not contain the same harmful carcinogens and toxins found in gasoline. Additional References: http://www.icf-industries.com/ http://www.e85fuel.com/ http://www.fueleconomy.gov/feg/byfuel/FFV2000.shtml http://www.eere.energy.gov/cleancities/ccn/archive/2_6pump.html http://www.edmunds.com/advice/specialreports/articles/100572/article.html http://www.greencar.com/index.cfm?content=topstory http://www.nextstep.state.mn.us/res_detail.cfm?id=184 Flexible-Fuel Vehicles (FFVs) Flexible-Fuel Vehicles are specially designed to run on regular unleaded or any ethanol fuel blend up to 85 percent. Special on board diagnostics “read” the fuel blend, enabling drivers to fuel with E85 or regular unleaded if E85 is not available. Therefore, any part of the engine that comes in contact with the fuel has been upgraded to be tolerant to alcohol. Normally, these parts include a stainless steel fuel tank and Teflon lined fuel hoses. Today, Ford Motor Company, General Motors, and DaimlerChrysler Corporation all offer E85 engines as standard equipment in certain vehicles—while little to no additional cost is incurred. The vehicles are proven reliable and come with the same factory warranties as gasoline vehicles. Chrysler Sebring Sedan and Dodge Stratus Sedan 2.7 liter V6 Flexible-fuel engine 4-speed automatic transaxle 5 passenger 16 gallon fuel capacity Dodge Ram 1500 Series Pickup 4.7 liter V8 Flexible-fuel engine 5-speed automatic 3 passenger 26 gallon fuel capacity Chrysler Town and Country and Dodge Caravans available in late 2004 3.3 liter V6 Flexible-fuel engine 4-speed automatic 7 passenger 20 gallon fuel capacity Ford Taurus 3.0 liter 2V, V6 Flexible-fuel engine LX, SE, SES sedan and SE wagon models 5 or 6 passenger 18 gallon fuel capacity Ford Explorer 4.0 liter SOHC V6 Flexible-fuel engine 4 door 5-speed automatic 5 passenger standard/7 passenger optional 22.5 gallon fuel capacity Ford Explorer Sport Trac 4.0 liter SOHC V6 Flexible-fuel engine 4 door 50 inch pickup bed 5-speed automatic overdrive 5 passenger 22.5 gallon fuel capacity Mercury Sable 3.0 liter 2V, V6 Flexible-fuel engine GS Sedan and Wagon 5 or 6 passenger 18 gallon fuel capacity Mercury Mountaineer 4.0 liter SOHC V6 Flexible-fuel engine 4x2 or AWD 5-speed automatic 7 passenger 22.5 gallon fuel capacity Chevrolet Suburban and GMC Yukon XL 5300 Vortec V8 Flexible-fuel engine 2WD and 4x4 9 passenger 32.5 gallon fuel capacity Chevrolet Silverado and GMC Sierra 1500 series in regular or extended cab, long or short box 5300 Vortec V8 Flexible-fuel engine 2WD and 4x4 34 gallon fuel capacity long bed 26 gallon fuel capacity short bed Chevrolet Tahoe and GMC Yukon 5300 Vortec V8 Flexible-fuel engine 2WD and 4x4 9 passenger 26 gallon fuel capacity Biodiesel Editorial by Dan Gilligan President, Petroleum Marketers Association of America As president of the Petroleum Marketers Association of America (PMAA), I would like to congratulate the biodiesel industry on successfully achieving all recognized technical, regulatory and infrastructure milestones that have resulted in its commercial success as a fuel and fuel additive. Biodiesel is a product with a great deal of promise, and petroleum marketers would be wise to learn more about it. Biodiesel is virtually the only alternative fuel to integrate seamlessly with diesel technology nationwide. Petroleum marketers are eager to deliver products to their local marketplace that their customers can benefit from, and biodiesel is one such product. As its use increases in the United States, petroleum marketers will continue to integrate biodiesel into their operations, adding both value and market differentiation into their product lines. This change should be welcomed as a new source of revenue and national energy security that will ensure the diesel industry continues to grow healthy and strong. PMAA is a federation of 42 state and regional trade associations representing 7,850 independent petroleum marketers nationwide. Collectively, these marketers sell approximately half the gasoline, 60% of the diesel fuel and 80% of the home heating oil consumed in America annually. In January 2001, PMAA was pleased to welcome the National Biodiesel Board (NBB) as a national partner. Renewable fuel is an important and timely topic in Washington D.C. PMAA appreciates the insight the biodiesel industry will bring to our discussions. What is E.O. 13149? E.O. 13149 aims to ensure that the federal government exercises leadership in reducing petroleum consumption through improvements in fleet fuel efficiency and the use of AFVs and alternative fuels. Under E.O. 13149, any federal agency with a fleet of 20 or more vehicles in the United States must develop a Compliance Strategy that documents how the agency plans to accomplish the required 20% reduction in petroleum consumption by 2005 compared with its FY 1999 fuel consumption. All vehicles (light-, medium-, and heavy-duty) are covered. What is EPAct? The goal of the Energy Policy Act (EPAct) is to enhance our nation's energy security. Several parts of the act were designed to encourage the use of alternative fuels to help reduce U.S. dependence on imported oil. EPAct requirements apply to certain fleets of 20 or more light-duty vehicles that are centrally fueled or capable of being centrally fueled and are primarily operated in a Metropolitan Statistical Area (MSA)/Consolidated Metropolitan Statistical Area (CMSA). Vehicles heavier than 8,500 lbs. gross vehicle weight rating (GVWR) or not located or operated primarily in a covered MSA or CMSA are exempt from the requirements of EPAct. Law enforcement, emergency, and military tactical vehicles are also exempt from this requirement. For FY 1999 and beyond, 75% of a federal fleet's covered vehicle acquisitions must be alternative fuel vehicles (AFVs). Reprinted from “The Charlotte Observer” - Wednesday, October 13, 2004 November 2, 2004 Contact: Michelle Kautz Phone: (573) 635-8445 Email: [ Please use our messaging system ] Doesn’t Take Rocket Science to Use E85 From left to right: Curtis Donaldson, National Ethanol Vehicle Coalition; Mike Dallas, DynCorp Technical Services/CSC; Astronaut Dr. Ellen Baker; Bill Heffner, GSA; William Gookin, NASA Transportation Program; and Joel Walker, Center Operations Directorate. Houston, TX...
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