This was something I posted in another chat group and I thought it was a good thing to add here . . .
Lets break it down a little so you fully understand what is going on. Gasoline is made of Hydrocarbons meaning there is some Hydrogen atoms and some Carbon atoms in the fuel and the introduction of ethanol adds some oxygen atoms to the mix too. The gasoline "burns" which breaks down the HydroCarbons into Hydrogen+Oxygen = water and Carbon+Oxygen=CarbonDioxide (CO2)and CarbonMonoxide (CO). If you have enough Oxygen combine with the HydroCarbons you should get less CO and more CO2 which is preferred since it is less poisonous and can be converted back to O2 by plants reacting with sunlight. However the Hydrogen will combine with the available O2 first giving you pretty consistant amounts of water but you can still get lots of CO2 and if there is not enough O2 get some CO and even less O2 get some C carbon coming out the tailpipe even though you are getting the water H2O out. Giving it too much O2 will also form some Nitrous Oxides NO2 from the Nitrogen that is 87% of the incoming air so getting the correct amount of O2 into the engine is key to getting low emmissions and a clean burn.
That is why I was asking if there was soot in the tailpipe. The O2 Sensor monitors the exhaust O2 levels and gets the Air Fuel mixture closer to the ideal clean burning mixture ratio. The CAT makes any engine unburned HydroCarbons and Carbon combine with the unused Oxygen in the exhaust before it reaches the second O2 sensor. Having a bad old tired CAT will result in less of that O2 Combination in the CAT, more O2 reaching the O2 Sensor and end up lowering the A/F mixture making it burn richer and costing you mileage. SO you see having a properly operating CAT is important to getting good mileage and of course having it allow the exhaust gasses pass through it easily reduces back pressure in the engine too.