Posted: 03/10/2004 at 12:00:00 AM PST

by Larry M. Edwards

SAN DIEGO -- Four years from now, when athletes from around the world descend on Beijing, China, for the 2008 Olympics, the air quality will be noticeably better due to reduced emissions from the city's buses and other vehicles. The same will be true in Shanghai for soccer's World Cup in 2010.

The cleaner air will be due in large part to a local manufacturer of a fuel additive that reduces exhaust emissions 30 to 40 percent or more.

The additive is an ester-based product dubbed Ethos Fuel Re-formulator and is produced by Ethos Environmental Inc. in South San Diego.

"The air quality regulations there are comparative to the 1950s here, so we are a solution for them," said Ethos President Enrique De Vilmorin. "If you take 15 percent off the emission rolls in any city, you're going to make a difference."

And with the price of gas at record levels in this country, Americans can also benefit from using the product, its proponents say.

In some cars, the addition of Ethos FR has improved gas mileage 50 percent or more, but the company's official line calls for a 7 to 19 percent improvement, depending on a number of factors, De Vilmorin said.

He stresses that a person's driving habits have a huge effect on gas mileage, so someone who drives with a lead foot on the accelerator is not going to see the improvement that someone driving more conservatively will.

But it's the reduced emissions he really wants to talk about, not improved mileage.

"That's really the only fair way to do a test, because there are a lot of variables that affect gas mileage," he said. However, because reduced emissions means that more of the fuel is converted into energy rather than going out the exhaust pipe, that also translates to reduced fuel consumption and improved gas mileage.

It pays for itself not only in lower fuel costs, he said, but because it will extend the life of the engine, and it will increase the likelihood of a vehicle passing the state-mandated smog test.

The product works because it is a super lubricator, explains Jerry Schnitzius, the general manager of Pacific Waste Services, the San Diego division of Allied Waste Industries, the second-largest trash collection company in the nation.

For three years, Allied has been adding Ethos FR to its truck fuel, reducing exhaust emissions, fuel consumption and maintenance costs. The product is also added to the power steering and transmission fluids.

"We're absolutely sold on it," Schnitzius said. "It reduced emissions from our trucks by 65 percent.

"It saves us money," he added. "It's also the right thing to do."

Two years ago, Allied received the Earth Day Corporate Award for making a difference to the environment and saving valuable resources, including money, crediting Ethos FR.

The company's cars have benefited from about a 10 percent improvement in gas mileage, Schnitzius said.

The ester-based Ethos FR removes carbon deposits and cleans and lubricates an engine's internal parts without using petroleum-derived solvents.

An ester is a tiny molecule that is smaller than a hydrocarbon, so it penetrates hydrocarbon residue and breaks it up, sending it out the exhaust pipe.

"It's a cleaning process; it gets between the carbon and the metal and the carbon falls away," De Vilmorin, adding that it's good for environment because 99.999 percent of the product is consumed during engine combustion.

Esters occur in nature, and the primary one used by Ethos Environmental originated in palm oil, although the company develops its esters synthetically.

"Otherwise, we'd have to cut down all the palm production in Central and South America," he chuckled.

However, even being in an environmentally conscious country and state that have mandated clear-air policies, most of Ethos Environmental's business is with foreign customers.

"Our sales are 10 times greater outside the United States," De Vilmorin said. "We have huge sales in China, Taiwan, South America and Europe."

The company has strategic partnerships with Thai and Chinese governments, as well as deals with the national oil companies in Peru, Ecuador and Mexico. It has production plants in Malaga, Spain, and Bangkok, Thailand.

That's not to say Ethos is not gaining recognition in the United States. The U.S. Marine Corps at Camp Pendleton is using the additive in the jet fuel that powers the huge LCAC air-cushion landing craft that transport equipment from ship to shore.

The Air Force is also initiating a product evaluation later this year.

De Vilmorin would not disclose the company's annual sales, citing the "quiet period" preceding the company's initial public offering, slated for sometime in the next few months.

However, the company is "fine financially," he said. "We're not in search for monies. We just need to take care of the private investors. It's time they see some of the rewards."

Ethos is also developing new engine technology, power sources that will significantly change the century-old internal combustion engine. "It's very futuristic, and we probably won't be around to make them, but the basis for the technology is already here," he said.

The company, which has 40 employees, settled in San Diego in 1997 and began commercial production of the fuel re-formulator after being snubbed by the Environmental Protection Agency.

The product was patented in 1992, and De Vilmorin approached the EPA with the notion that the fuel re-formulator could be used as an oxygenate added to fuels to reduce emissions. It would have replaced MTBE, which is now being phased out and replaced by ethanol.

But he got the cold shoulder in the nation's capital. "We spent time chasing politicians down, but we found out they don't spend much money. All they want is your money," he said, pointing out that Archer Daniels Midland Co. spent more than $50 million getting bio-diesel approved for use.

AMD also just happens to be the largest producer of ethanol, a product whose value as a fuel additive is being scrutinized and has been described by some researchers as a "hoax."

In July, Senator Dianne Feinstein asked the state and federal EPAs to investigate the use of ethanol-blended gasoline after smog levels in Los Angeles increased following the switch from MTBE-blended gasoline.

"Ethos does the same thing, and it's better for the environment," De Vilmorin said. "Technologies from 1980s were included in Clear Air Act of 1990, but today we're 20 years down the road, and there other ways of making things more efficient."

So why hasn't this miracle product taken California by storm, especially in light of the record gas prices?

Ethos FR is offered sale to the public on the Ethos website for $19.95 a pint, but the company is not actively promoting it. The ratio is 1 to 1280, or one ounce per 10 gallons of fuel.

"It is packaged for consumer use, but marketing is too expensive. Sometime in the future I would suspect it's going to be readily available to everybody, especially with the price of gas going up," he said.

"We're a quiet company," he added. "We have a slogan, we're an ethical company that has ethical customers, and we sell ethical products."