GAMI Unleaded gets approval

[1980Mooney]

1 hour ago, MikeOH said:

You misunderstand me.  I am NOT saying George will fix the price at the pumps.  What I am saying is that we will be forced to pay whatever he desires for licensing, STCs, and royalties as he IS in complete control of those. The refiners, distributors, FBOs will most certainly pass those costs onto us.

I think he's being very smart saying it's only going to be $0.65-$0.85 extra per gallon. To use your argument, how is he going to be in control of the final pump price, anyway!  But by throwing out a 'reasonable' number he minimizes blow-back BEFORE the EPA mandates his product's use.  By then, too late, too bad, so sad.

He is not saying the price will "be $0.65-$0.85 extra per gallon". In 2021 at AirVenture GAMI released a Q&A for G100UL .  They made a statement regarding "COST"...not price:

https://oac.ok.gov/sites/g/files/gmc221/f/GAMI Q and A 7 27 21 2 15 PM release.pdf

• "How much more than 100LL isG100UL avgas going to cost?
  • Current best estimates are that G100UL avgas will cost 60-85 cents/gallon more than 100LL as the fuel leaves the producer’s facility and begins to enter the stream of commerce. Estimates are based on crude oil pricing at 40-60 dollars/barrel, and will vary with the price of crude oil."

Note that his estimate is very dated and based upon $40-60/bbl crude oil prices. Crude has been and will be closer to $85-100/bbl.  His estimate was based on a median of $50 crude.  The current median is more like $92 crude. 

• That means the increased COST to produce G100UL will be more like $1.10 - $1.56 more than the cost to produce 100LL
• The PRICE that G100UL sells for is a whole different thing
  • Producers/Blenders will set a price to sell to the designated primary distributor, AvFuel
  • Wholesale price will be set by AvFuel first as they distribute to FBO's
  • Retail price to pilots/owners will be set by the FBO's

I am betting that G100UL will be priced about $2.00 above 100LL.  Some on Beechtalk think it will be $3.00 above.

Edited September 3, 2022 by 1980Mooney

[A64Pilot]

8 minutes ago, Fly Boomer said:

I doubt this is the end of GA, but ultimately corporations have more money than the FAA, and they will therefore prevail.

Yes, but. There is always a but isn’t there.

I don’t think it would be in their best interest to drive out a lot of piston aviation, remember anyone with real money is flying a turbine.

But who knows the short term profit from gouging may be too tempting.

See I’m a conspiracy theorist, I think a lot of our shortages were manipulated, once Corporations learned there were big profits in them.

[Fly Boomer]

1 minute ago, MikeOH said:

I'd put my money on the government prevailing over ANY company if it comes to EPA/"The Environment" issues.

Nah, corporations have been effing up the environment since the dawn of time.  The EPA sometimes finds an egregious offender they want to hang out to dry but, while they are doing that, a zillion other corporations are busy making money at the expense of anything that gets in their way.

[MikeOH]

@1980Mooney

Thanks for pointing out the pricing structure.  Yeah, I'm betting on over $3.00 more at the pump And, if greed prevails (and hard to see why it won't given the monopolistic situation the FAA approval has provided) who knows how much higher?

Others have asked at what price point will you stop flying?  For me, in today's dollars, my 'walk away' price is likely around $10 per gallon.  I fear G100UL may take us there.  I truly hope I'm wrong about that.

[A64Pilot]

If it’s priced too high, that drives 94UL to be sold as a lot can burn that, reason car gas never really caught on at airports wax that LL never got high enough to justify it.

‘Real high GAMI fuel will also kick start copy cats when they see the potential profit as I believe a chemist could analyze it and very quickly come up with their own proprietary recipe, and having been done once hopefully approval would be much faster, especially if the FAA sensed profiteering 

So I think there will be pressure to help hold the price down, but bet we will se at least a 2 or 3 dollar jump.

[MikeOH]

2 minutes ago, A64Pilot said:

If it’s priced too high, that drives 94UL to be sold as a lot can burn that, reason car gas never really caught on at airports wax that LL never got high enough to justify it.

‘Real high GAMI fuel will also kick start copy cats when they see the potential profit as I believe a chemist could analyze it and very quickly come up with their own proprietary recipe, and having been done once hopefully approval would be much faster, especially if the FAA sensed profiteering 

So I think there will be pressure to help hold the price down, but bet we will se at least a 2 or 3 dollar jump.

I hope you are right.  My concern is that Avgas is a pretty small market and I think, despite the GAMI approval, the amount of work involved is going to shy away others from trying the same thing...even at "too high" prices; just not enough incentive for the risk.  If the FAA cares at all, then, yes, they might do something proactive about profiteering.  I doubt they care.

And I, too, am a conspiracy theorist: I suspect the government/FAA would be just as happy to have "all the little planes" completely out of the sky!  (By that I mean individual citizens with planes, not commercial GA which has a useful purpose)

[Pinecone]

Since there are already several others working on other versions of unleaded 100, high prices incentivizes their continued development.

Lower cost makes it less likely that others will continue to work on others.

But, since any refinery can make this, or you can even make it without a refinery, just buy the components and mix it, there will be competition with only one formula.  And since it doesn't require special handling and storage and no potential contamination of other unleaded products, more refineries/blenders may make it.

[EricJ]

4 hours ago, MikeOH said:

He owns the IP and is a seasoned attorney…not seeing how he doesn’t have all the power in this situation!

He has very little power against distributors and refiners that don't need it, especially if they're working on their own blend or have been working a deal or financing somebody else to come up with one or if they see some production disadvantages or hurdles to G100UL.   He has to sell it to the industry, and the industry may have other ideas.   Maybe they don't, but I wouldn't assume it's a slam dunk by any means.

When I buy gas for my truck I insist on only HAND BLENDED fuel.  It can be difficult to find the true artisanal gasoline these days. 

[toto]

54 minutes ago, 1980Mooney said:

That means the increased COST to produce G100UL will be more like $1.10 - $1.56 more than the cost to produce 100LL

Is this based on the cost of the aromatics?  Do the additives track crude oil prices?  (Asking because I have no idea, and I was originally thinking that as the cost of oil increases, the cost of the additives to produce G100UL would actually go down as a percentage of the pump cost.)

[toto]

6 minutes ago, Pinecone said:

Since there are already several others working on other versions of unleaded 100, high prices incentivizes their continued development.

Iirc Swift already has a 100UL product in the works, and they already have a (very limited) distribution network.  I'd love to see more competition in the space, and if G100UL can provide a PoC to drive continued investment - all the better.

[toto]

53 minutes ago, A64Pilot said:

‘Real high GAMI fuel will also kick start copy cats when they see the potential profit as I believe a chemist could analyze it and very quickly come up with their own proprietary recipe, and having been done once hopefully approval would be much faster, especially if the FAA sensed profiteering 

 

I remember reading that the aromatics formula had been tested and discarded by many different R&D groups over the years.  I wonder how unique the GAMI innovation really is --- it's possible that many similar approaches could have been successful, but the producers thought that something more mainstream would be easier to certify (iow, they didn't want to spend twelve years on it).

[toto]

1 hour ago, MikeOH said:

Others have asked at what price point will you stop flying?  For me, in today's dollars, my 'walk away' price is likely around $10 per gallon.  I fear G100UL may take us there.  I truly hope I'm wrong about that.

I'm not sure if I'd walk away from aviation at $10, but $10/gal starts to make an LSA seem pretty attractive

[toto]

1 hour ago, A64Pilot said:

I just hope 94 UL also become available, it ought to cost less than LL, it’s just LL without the lead?

Didn't they originally plan to make 94UL out of switchgrass?

[A64Pilot]

14 minutes ago, toto said:

Is this based on the cost of the aromatics?  Do the additives track crude oil prices?  (Asking because I have no idea, and I was originally thinking that as the cost of oil increases, the cost of the additives to produce G100UL would actually go down as a percentage of the pump cost.)

I don’t know what the definition of aromatics is, but I bet it’s made from petroleum and if petroleum goes up then everything made from it does too

[toto]

2 minutes ago, A64Pilot said:

I don’t know what the definition of aromatics is, but I bet it’s made from petroleum and if petroleum goes up then everything made from it does too

I know I'm way out of my depth if I'm citing Wikipedia but here goes

https://en.wikipedia.org/wiki/Aromatic_compound

This reads basically "blah blah benzene blah blah" to me.

[MikeOH]

24 minutes ago, EricJ said:

He has very little power against distributors and refiners that don't need it, especially if they're working on their own blend or have been working a deal or financing somebody else to come up with one or if they see some production disadvantages or hurdles to G100UL.   He has to sell it to the industry, and the industry may have other ideas.   Maybe they don't, but I wouldn't assume it's a slam dunk by any means.

When I buy gas for my truck I insist on only HAND BLENDED fuel.  It can be difficult to find the true artisanal gasoline these days. 

Well, my premise is that the EPA is going to ban 100LL in the very near future now that G100UL has been approved.  Since I am unaware of ANY other approved suitable fuel I don't see how ANY distributors and refiners will have ANY choice but to NEED it!

IMO, we need some other alternative fuel to not just be developed, but approved.  That would ensure some competition at all levels of the supply chain.

[ArtVandelay]

I like to see how current prices have affected avgas consumption.

If we get to $9-10 I think you’ll see a end of high prices for used planes.

[EricJ]

17 minutes ago, MikeOH said:

Well, my premise is that the EPA is going to ban 100LL in the very near future now that G100UL has been approved.  Since I am unaware of ANY other approved suitable fuel I don't see how ANY distributors and refiners will have ANY choice but to NEED it!

IMO, we need some other alternative fuel to not just be developed, but approved.  That would ensure some competition at all levels of the supply chain.

A few months ago one of the notes about this coming out of the FAA cited some other efforts and implied more, which made me think that this might turn into a quagmire, or it might be good for competition.   That may have been just to make it look like they were doing more or that there was, in fact, competition when there might not be any in actuality, or something in between.   Regardless, we have little to no visibility into the production and distribution part of the problem, and given how that typically works in other industries I'm just assuming it's just as messy and potentially complicated here.   I don't know why it wouldn't be, actually.   Being a small market compared to the larger (and also declining) market seems more likely to work against us, but I don't think we'll be abandoned.

 

[1980Mooney]

1 hour ago, Pinecone said:

Since there are already several others working on other versions of unleaded 100, high prices incentivizes their continued development.

 

1 hour ago, EricJ said:

He has very little power against distributors and refiners that don't need it, especially if they're working on their own blend or have been working a deal or financing somebody else to come up with one or if they see some production disadvantages or hurdles to G100UL.   He has to sell it to the industry, and the industry may have other ideas.   Maybe they don't, but I wouldn't assume it's a slam dunk by any means.

 

1 hour ago, toto said:

Iirc Swift already has a 100UL product in the works, and they already have a (very limited) distribution network.  I'd love to see more competition in the space, and if G100UL can provide a PoC to drive continued investment - all the better.

Others working on other versions? "Distributors and refiners that don't need it, especially if they're working on their own blend or have been working a deal or financing somebody else to come up with one? Swift already has a 100UL product in the works?

Are we on the same planet? It's all talk and no product. Back in 2013 Shell announced that they produced Unleaded 100 Avgas and that they had been working on it for 10 years at that point. The only problem is that it doesn't work.  19 years of development and it doesn't work.  I bet you that Shell has given up.  Phillips doesn't have anything that works.  Swift doesn't have anything that works.  It is completely "crickets" from these companies.

If any were close they would be announcing it now while GAMI is the approved solution so that everyone doesn't sign exclusive deals with GAMI. 

This aviation gasoline market is in constant decline since 1980.  It is too small for the logistics and economics to be split with multiple suppliers.  Now that G100UL is approved there is low and diminishing incentive for Shell and others to continue to pour endless R&D spending into a replacement fuel.

https://www.aopa.org/news-and-media/all-news/2013/december/03/shell-unleaded

"Shell Aviation, a subsidiary of the multinational oil giant Royal Dutch Shell, announced Dec. 3, 2013 that a 10-year effort in the laboratory has produced a fuel that may put a long-sought goal—once thought to be unattainable—within reach: a lead-free “performance drop-in” replacement for 100LL that could power any aircraft in the piston fleet."

[Schllc]

Someone mentioned earlier that this could increase the price of fuel up to $3 per gallon. 
I wonder if the marker will tolerate that kind of increase. 
That is huge. 

[MikeOH]

10 minutes ago, Schllc said:

Someone mentioned earlier that this could increase the price of fuel up to $3 per gallon. 
I wonder if the marker will tolerate that kind of increase. 
That is huge. 

GA has already proven it will take a $3/gallon increase; that's exactly what has happened the last year, or so.  I think another $3 would be sustainable as well.  Beyond that, I'll likely be dropping out, but who knows what abuse others will take before calling it quits.

Ask yourself, at what price per gallon will you hang it up?

All in, my flying addiction had run about $15K per year.  This year is projecting to be $17-18K.  Another, $3 would add, roughly, $3K or $20K total.  That $15K number was based on avgas at the mid $3 range.  $10 avgas puts my total in the $23K range. I could swing that now, but I'm planning on retirement in the next year; an $8K delta may not be in the cards for a retirement avocation

[T. Peterson]

23 hours ago, MikeOH said:

Well, I'm probably the only one that thinks this is HORRIBLE news.

Mark my words, we are going to get really hosed on what we pay for G100UL. For the reasons stated above 100LL is going to disappear FAST; even before the EPA issues their mandate (which is inevitable!).  Especially here in Kalifornia!  My prediction is that this time next year we will be paying $2 to $3 a gallon MORE for G100UL than we do today for 100LL.  Of course, when this comes to pass, all the Braly fan-boys will jump up and say, "Oh, we'd be paying that for 100LL now, anyway because of blah, blah, blah."

Regardless of the minuscule amount of lead involved in aviation (someone said 'not even a pimple') there is no doubt lead is bad stuff to living things.  The public has been conditioned to think they are about to die if there's a molecule of lead anywhere within 5 miles....the ambulance chasing attorneys are going to be all over FBOs, refineries, airports, and anyone they can think of almost immediately.  The defense of there's no alternative just won't fly anymore.  This is going to be spun as rich airplane folk that want to continue to poison the population!  100LL is not going to be a survivor in that litigious environment.

The government has just handed ONE MAN, George Braly, the keys to a nationwide monopoly.  There is NO competition.

To believe he, his family, and his heirs are going to be benevolent 'dictators' of pricing is naive in the extreme.

Enjoy the next 6-12 months of low pice...I hope it takes longer.  But given how slow bureaucracies move (not just government ones) I hope the time frame is longer, but I'm not betting on it.

I sure hope you are wrong, but have a sickening feeling you are right on the money. I am beginning to wonder why I bought this airplane.

[1980Mooney]

27 minutes ago, Schllc said:

Someone mentioned earlier that this could increase the price of fuel up to $3 per gallon. 
I wonder if the marker will tolerate that kind of increase. 
That is huge. 

The introduction of unleaded automobile fuel with modern synthetic detergent oils has, in automobile engines, doubled oil change intervals, allowed spark plugs to last practically forever without maintenance and effectively doubled the lives of automobile engines.
 

In your plane,  imagine only one oil change per year, spark plugs that last the life of your engine virtually without maintenance and 3000 hour TBOs. 
 

That is huge. And it offsets the price of the fuel. 

[MikeOH]

6 minutes ago, 1980Mooney said:

The introduction of unleaded automobile fuel with modern synthetic detergent oils has, in automobile engines, doubled oil change intervals, allowed spark plugs to last practically forever without maintenance and effectively doubled the lives of automobile engines.
 

In your plane,  imagine only one oil change per year, spark plugs that last the life of your engine virtually without maintenance and 3000 hour TBOs. 
 

That is huge. And it offsets the price of the fuel. 

Is it legal to extend oil change intervals out to a year?  Platinum tip spark plugs were also a significant factor in extending automotive plug change intervals; and, they are already available for aircraft.  I'm at 2600 since OH, and for Part 91 non-commercial, TBO is only a suggestion. I do my own oil changes, but didn't think saving an oil change a year is going to offset the kind of avgas cost increases we are discussing.  I'm skeptical that saving a few oil changes, and eliminating plug changes (a stretch, me thinks), and that Lycoming/Continental are going to advertise 3000 hour TBOs is going to happen because of G100UL.

[ArtVandelay]

The introduction of unleaded automobile fuel with modern synthetic detergent oils has, in automobile engines, doubled oil change intervals, allowed spark plugs to last practically forever without maintenance and effectively doubled the lives of automobile engines.
 
In your plane,  imagine only one oil change per year, spark plugs that last the life of your engine virtually without maintenance and 3000 hour TBOs. 
 
That is huge. And it offsets the price of the fuel. 

You’re blaming lead for most of the wear and tear on our engines. Other than stuck valves and dirty spark plugs, I’m not sure about the major increase in engine life. They still will be operating at 100% power at takeoff and well over 50% for most of the tach time.

Be nice if the auto market (high performance cars) could embrace this fuel as well, then the volume would go up and prices to go down.