Liability vs. profits

A recent story by Michael Mooney, who is an aviation fuels supplier, states that the reason that no major oil company is supplying mogas to end users is because of liability.

When it was posted, several people commented that the liability issue is a myth and that they have been selling mogas in Europe with no liability problems. Well, it is not a myth and comparing European liability laws to the US system is like comparing basketball to football. They are both sports played with a ball, but there are significant differences, like contingency cases.

There are a lot of small issues with using mogas in aircraft, but the major issues are cost/profits, misfueling by the pilot, and a window of vulnerability that involves post-crash inspection.

The cost/profit concern deals with the amount of profit an oil company can make in a single automotive fuel dealer that pumps more than 100,000 gallons per month verses the number of FBOs and the liability exposure and equipment needed to sell the same amount of fuel at airports. It is called return of investment.

With mogas in aircraft, there are a number of handling concerns, but ethanol compounds increase the problems significantly. Now that ethanol in mogas is becoming so wide spread, it is becoming more and more difficult for people to find ethanol-free mogas. This means that even if a FBO sells non-ethanol fuel, the odds are fairly good that if a pilot adds fuel they purchased elsewhere, they may mistakenly put ethanol-containing fuel into their airplane.

If a pilot does get some ethanol fuel in their plane, and has a problem, here is where the liability problem with selling mogas at the airport becomes a concern.

100LL is a bottomed, unique fuel. If a sample of fuel is left in the wreckage — even just a few drops — a quick True Boiling Point (TBP) distillation by Gas Liquid Chromatography will quickly show if the fuel was pure 100LL or contained some mogas. If there is a large enough sample, it can be tested for ethanol, but that is rare.

An even worse scenario is if no fuel is available. Now investigators are dependent on tests and inspections of the engine and fuel system. Here, all they have to do is look at the exhaust ports. If they are black, it is an indication that the plane was burning mogas and the heavy ends in the fuel left a heavy black tar-like deposit in the port. If they had been burning 100LL, then there would not be a tar-like black deposit. Even if the plane was involved in a fire, an analysis of the deposit in the exhaust port will probably tell whether any mogas had been used.

In this case, if the deposits did not show any tar-like substance, and the FBO’s 100LL fuel samples were OK, then it is in a defensible position. If there is evidence of tar or coke-like deposits in the exhaust ports, and the FBO’s 100LL fuel sample checks out OK, then it is still in a defensible position, because it proves that the pilot had been adding mogas on their own. This mogas could have contained ethanol, which could have caused the problem.

Now let’s look at an FBO that is selling mogas, and the same thing happens where the pilot adds some additional mogas that does contain ethanol and an accident occurs. Here the burden of proof shifts to the FBO, especially if there is no fuel sample available. The FBO must be able to prove that it has samples from every delivery, no matter how small, and that every sample was without ethanol and on spec.

This may not seem like a big deal and I am sure that the mogas people will say it is nothing. But this shadow or possibility of ethanol causing the problem may be enough for a good lawyer to convince a jury that the FBO was partially responsible. And since the oil companies have deep pockets, it will not hurt them any to help feed this poor pilot’s family and keep them out of the cold.

The bottom line is always, “Will the oil companies make enough money selling mogas at airports to offset the liability exposure?” Again, I would not bet the family farm on it happening.

Comments

  1. Ken Deken says:

    Thanks.That was a useful article with a summary of some very good reasons why this aircraft gasoline issue is more complicated than it seems. I am not a believer in most of the conspiracy theories, so I appreciete the factual explanation.

  2. It seems as if the big fear is some off airport mogas with ethanol is “accidentally” introduced into a plane’s tanks.
    If we all got together and ethanol free mogas was offered along side 100LL then we would not have self fueling and have to get our fuel off airport. This would greatly displace the fear of “bad” gas.
    If an airport offers 100LL then in their minds 100% of the aircraft can use it. May not like it, but they can use it. If they have mogas then 20 to 30% of the aircraft can’t use mogas and have to use 100LL. So why should most of them add another fueling station? Is the cost benefit there?
    What we need is mogas at airports at a reasonable price. If mogas was sold with the same margins as 100LL then there would not be a great cost savings to the aircraft owner and many would self fuel to keep the cost down, this cuts out the FBO and we are back to square one.
    Any way one looks at it it is a complicated situation, not easily solved.

  3. What if they just went back to making the old 80/87 spec. If I remember right it had a “maximum” of .5 ml of tetralead per gallon, but if the fuel met the octane spec it had no lead added. It is an approved known spec that the insurance people should buy off on since they insured it for years, granted there would have to be separate tanks (the same as mogas). As long as the fuel supplier could meet the 80/87 spec without lead everone should be happy until they can come out with a 100 octane lead free that makes everyone happy. I know it wouldn’t be as cheap as the E0 mogas I burn now and procure myself but availability is everything when you need fuel.

  4. Kent, your comment that EAA could offer insurance for mogas retailers fits well with being abandoned by the “alphabets”. EAA despite being a “member” organization sells products to make money for the national organization they no-longer truly exist for the benefit of the members. EAA is, as you know, the holder of the first auto-gas STC (1983) and yet EAA no-longer promotes the use of mogas. They are happy to sell the STC but will not encourage the use of the fuel and join with the other big “alphabets” calling for a “drop-in” 100LL replacement. We are left on our own to effect change one pilot, one aircraft and one field at a time. In memory of Mr. Pete Seeger cue the music, “We shall overcome”.

  5. No one can dispute the effect liability has had on General Aviation over the past thirty years. Blood sucking attorney’s have managed to stifle innovation and to run a good many people out of business. Despite this and as previously mentioned, insurance coverage for FBO’s can be found easily enough which makes it possible for them to sell mogas if they wish. The fact that such liability insurance can be had at all speaks volumes on this subject. It still does not however do away with the perception of increased liability. This perception, however in error it may be, manages to give people pause to consider whether or not they will be entrapped by some attorney. This extends from the pilot to his mechanic to his FBO. The first STC’s for autogas came out in 1983, and there has yet to be any accident attributed to the use of ethanol free autogas. This alone ought to be sufficient to do away with the perception of increased liability and to some extent it has. Lycomings “approval” of 93AKI autogas demonstrates that at least one OEM with deep pockets and hence with plenty to fear, recognizes that the issue is, while not moot, certainly is close to it. The problem is that logic has nothing to do with how we perceive liability, but fear has everything to do with it. As long as we remain fearful of loosing everything to widows of deceased idiots there is still perceived liability. Maybe after another 30 years it’ll finally go away. And Mr. Davis – there is no overturning of laws in the US which favor lawyers because it is they who control the levers of power. If it were as simple as that we wouldn’t be having this conversation.

    • Kent Misegades says:

      Well put Todd. If we succumb to unfounded fears, then we ought to give up flying altogether. The best defense against fear is education and a strong offense. Our alphabets have failed miserably in this regard, and often only foment the problem through their ignorance and support of the cronies who are among their biggest donors. Glad you mentioned Lycoming, a company that seems to be well respected by the GA media. One wonders why so few have connected the dots – if Lycoming (and Continental, Rotax, Jabiru, ULPower, AeroVee, etc, etc., etc.) have Type Certificated aircraft engines for mogas, what do they know about liability that the Avgas producers don’t? Why does Lycoming talk about their support of mogas in Europe when displaying at AERO in Germany, but they down-play it in the USA? European gas stations also now sell ethanol blends.

  6. Good info by both Ben and Kent. I don’t really think that mixing ethanol fuel with non is really much of an issue. Surely the mogas supplier knows the difference. I think that most pilots know to obtain non-ethanol fuel from a reliable off-airport source. My main problem is that it’s hard to find 91 or 93 octane non-ethanol fuel. There are several sources in North Georgia including a name brand but they all sell 90 octane and I’m not going to take a chance with my Lyc 0-360A1A.

    • Kent Misegades says:

      Finding sources for E0 at a gas station is different than at fuel terminals, where the ethanol is first added. Call around to jobbers, and check out your local marinas where many offer ethanol-free. There is plenty of 91-93 AKI at the Spartanburg, SC terminal.

  7. Mogas is the FAA approved, unleaded aviation fuel. That a refiner/distributor would say the liability is too high to allow it to be sold is their choice. The risk there is that Jet A could be put in a “turbo” Bonanza or a “turbo” Commander, hint it’s proper in one of them. The same risk was there with grade 80 avgas, that was solved by refiners as not being “viable” to supply more than one grade of avgas. There is NOTHING wrong with a company making money. When making money, this quarter, is more important than providing the service and supporting the industry that the business is involved with however there is. Today money is the goal in the U.S. not making a product, we could make something , but at low profit this quarter, sell the company to foreign investors however and you get a great check every quarter, for the rest of the former owner/stockholders life, as the company is sold off piece by piece. How to justify this? simple it is the Liability, we can’t do that here etc. Some would say it makes cent$, money is business, Bill Boeing, Jaun Trippe, and William Piper, thought “business” was building and operating, they are gone, their companies have been sold and the stockholders are happy. Mogas is simple, available today, will work in +80% of pistons, but won’t make enough money TODAY to be worth doing.

  8. Kent Misegades says:

    Ben,

    We respect your wisdom and knowledge greatly.

    I think there is some confusion though concerning our claims that the liability issue is a myth. The comments from Avgas suppliers refer to fuel suppliers obtaining liability coverage for fuel. We are referring to airports obtaining coverage for fuel supplied by thousands of independent fuel jobbers, all of whom have coverage of course. We have spoken with many airports selling mogas in the US and none have mentioned problems getting coverage. Of course, an Avgas supplier is not going to offer insurance for mogas, a fuel he does not supply. But when we spoke with one of the largest aviation insurance companies, Falcon, they confirmed that they are happy to offer the overage. A simple review of NTSB accident reports on fuel-related issues will reveal few, if any incidents caused by poor quality mogas that was purchased at an airport. If there is truly greater risk, those who claim this need to show the evidence. I just shopped around for a new life insurance policy. Most companies would not cover private pilots, especially those who fly homebuilts or aerobatics as I do. Then I came across PIC who found me a great rate with ING. There will always be an insurance company for niche businesses that the big companies ignore.

  9. Norman Davis says:

    A typical response that I would expect from a modern American business person. Your article sounds so much like cowering in the corner and whining rather than standing your ground and overturning liability laws via your state legislators. No wonder little gets accomplished when you make these flimsy excuses.

    Same goes with 100LL. Your industry knew the days were numbered for this fuel, but chose to ignore it and then fumbled around half heartedly thinking about a replacement. The lot of you are a disgrace to the flying community.

    • Kent Misegades says:

      With all respect, Ben Visser has been one of the few people from the aviation fuel industry who has spoken in favor of mogas, and for many years. I suggest people review his blog here for his excellent contributions to the subject. He does raise important points here from the perspective of major fuel suppliers. Our point though is that the existing supply chain for mogas has not had great difficulty getting such coverage for distributors or airports selling mogas. Here again is a topic where our alphabets could be helping, just as they work hard to provide us coverage for our aircraft despite GA being such a tiny sector of the industry. The EAA offers insurance to pilots – they could offer insurance to FBOs for mogas coverage, and make some money at the same time. This would be a far greater use of their time and members’ money, instead of chasing another myth – a low-cost, lead-free, drop-in replacement for 100LL.

  10. Ben, your article is on point however your methodology is wrong. In your article you referred to a “good lawyer” need I say more?

  11. Ben,

    Great article. There’s lots of great debate on whether mogas is a viable fuel for GA, but I think you’ve identified the real issue – liability and risk/reward. This is an incredibly litigious industry – with a small user base. And while mogas is probably a great alternative fuel for many piston planes, it’s not worth the risk for the petrol industry or FBOs. Without a statutory limit to their liability, mogas won’t become a widely available aviation fuel – regardless of its merits. Especially while another, purpose-built fuel is out there.

    Thanks for the article!

    Aleks

    • Kent Misegades says:

      But liability coverage is not the reason more airports do not offer mogas. It is primarily the lack of will on the part of airport commissions, managers and FBO managers. Often the biggest and only impediment is strong opposition by existing AVGAS suppliers, who threaten to stop supplies of fuel, liability coverage or a lawsuit. When an airport decides it wants to offer mogas, in most cases they make it happen. Where there is a will, there is a way.

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