The US refining and distribution system was preparing for gasoline without methyl tertiary butyl ether before federal lawmakers pulled defective-product liability protection from the 2005 energy bill. Its absence, and the mandated phaseout of the oxygenate requirement that led to MTBE’s use in the first place, accelerated the withdrawal process.
How hard it will be for the system to adjust by next summer’s driving season will be determined in the next couple of months, government and industry observers agree. Valero Energy Corp. already has said it plans to quit producing MTBE by next spring (see story, p.30).
“The issue always is one of transition,” said Joanne Shore, a senior analyst in the US Energy Information Administration’s petroleum division. “In the long term, people will find the means to replace supply. What we don’t know at this point is how many companies are going to move ahead [as Valero has announced] for the upcoming year.”
Ethanol’s contribution
Refiners will be seeking substitutes that match MTBE’s clean-burning and drivability characteristics. Ethanol comes close because it provides octane and doesn’t have sulfur. “But because ethanol increases Reid vapor pressure, you have to make adjustments in the summer to counter that impact,” Shore said.
Hypothetically, she continued, an East Coast refiner reducing its gasoline volumes by 11% with MTBE’s removal could replace 10% with ethanol. But it would have to remove 5% more of the fuel’s benzene and sulfur components to comply with the Mobile Source Air Toxics rule, resulting in a 6% net volume loss.
Shore noted that the Northeast already reduced its dependence on MTBE when New York and Connecticut banned its use. “People have done some learning as a result. Ethanol-blended products are being used on the East Coast, and suppliers have learned to deal with them. But that doesn’t mean there won’t be problems,” she said.
Less time to prepare
The difference, said Edward H. Murphy, downstream group director at the American Petroleum Institute, is that the New York and Connecticut bans gave refiners 4 years’ notice to prepare special reformulated gasoline blends. “Now, we don’t have that lead time. We’ll also no longer have an oxygenate requirement. So refiners may decide not to bring ethanol in,” he said.
He suggested that if many refiners quit adding MTBE, it could turn reformulated gasoline that includes the additive into a boutique fuel. That could lead to pipelines deciding not to transport product that includes MTBE, he said.
“Refiners are going to have to adjust, and not everyone is saying what they’re going to do. It’s too early to predict what the consumer implications will be. But there will be a lot of serious thought and effort over the next 9 months to make sure those additional supplies will be available,” Murphy said. ✦
