The future of avgas has been a hot topic for almost 20 years. I recently reviewed some of my past columns and found that I was not too far off in some of my past predictions, but I thought I would try to update them with a touch of reality.
The recent Super Bowl reminded me of a quote from Coach Vince Lombardi who, when asked if winning was the most important thing in football, replied, “It is not the most important thing, it is the only thing.” This quote can be paraphrased for today’s business types who run almost every major corporation and who believe that the next quarter profit statement is not their most important priority, it is their only priority.
Many years ago, the president of General Motors was asked to comment on the fact that when he started as CEO, GM had a 42% market share and eight years later when he retired it only had a 28% market share. He said something to the effect, “So? We were profitable every quarter,” and we all know how that turned out.
You are probably wondering what this has to do with the future of avgas. It has everything to do with it.
To start with, there’s a lot of talk about whether tetraethyllead (TEL), the lead antiknock additive, will be available in the future. There is only one company in the world that produces TEL, Innospec, which is based in England. There have been protests at the plant, as well as concerns that the market is getting smaller, which may lead to the company stopping production of the additive.
But, in reality, as long as there is a profit, it will produce the additive. And if it stops, there are plants in Russia and China that could be started up, for a price. I do not see 100LL going away because of a lack of TEL.
There is also concern that the number of 100LL producers keeps decreasing. In actuality, there were probably too many producers for the volume of business. If there is a business where one or two companies can easily produce all of the 100LL needed in the U.S., and there are five producers, then most of them will not be making an “acceptable” profit margin and may get out of the business. But as long as a few companies can make an “acceptable” profit, there will be a supply of 100LL to meet demand. The price, of course, will reflect the “acceptable” profit margin.
Is TEL going away? I have been answering that question for more than 25 years — and the answer is yes, some day. When is that day? That depends on the EPA and the FAA.
It is one of those vicious circle things. The environmentalists petition the EPA, which make a ruling, then the FAA realizes there is not a drop-in replacement, so they look at the liability and problems that could happen, so it cancels the EPA regulation. This upsets the environmentalists, who manufacture more data and the wheel goes round and round and, while the consultants get richer, the whole thing goes nowhere.
This whole mess is the main — or maybe the only — controlling factor in what will happen to 100LL. I know that the EPA has set a deadline for the removal of TEL from avgas. But, in politics, it is all about power and/or money. And a lot can change between now and then.
This can go either way. They may take the safe way out and let 100LL sales continue, which will only upset a few environmentalists. Or they may take the risk of removing the TEL and let the lawsuits and planes fall where they may. An airplane crash makes a great news story and would also make a really effective political ad.
So, in review, TEL will be available as long as we are willing to pay for it. 100LL will be available as long as it is legal to sell it, and we are willing to pay for it. Prices may go up — I put the may in there just to make you all feel good. And the outlawing of TEL is anyone’s guess.
I hope you all don’t think I am pessimistic, I am one of the most optimistic people you will every meet. But occasionally I like to throw a little reality into the mix just to confuse the pundits and soothsayers.