GASOLINE QUESTIONS REMAIN IN THE U.S.

To make reformulated gasoline in sufficient quantity and quality by the statutory deadline of last Jan. 1, U.S. refiners had to solve a tough set of technological and political problems. Now, in some areas, marketing the new fuel looks just as challenging.
April 24, 1995
3 min read

To make reformulated gasoline in sufficient quantity and quality by the statutory deadline of last Jan. 1, U.S. refiners had to solve a tough set of technological and political problems. Now, in some areas, marketing the new fuel looks just as challenging.

First there were the last-minute "opt-outs." These occurred in counties, most of them in the Northeast, that did not have to sell reformulated gasoline under the Clean Air Act amendments of 1990 but that initially volunteered for the program anyway. When reformulated gasoline arrived and pump prices rose, consumers in these areas suddenly preferred conventional fuel.

HEALTH CONCERNS

Then concerns grew about reformulated gasoline's effects on human health. Controversy focuses on methyl tertiary butyl ether (MTBE), which raises octane and helps meet oxygen requirements. Wisconsin, where the health issue is most intense, is trying to limit MTBE levels in reformulated gasoline. Health worries about MTBE arose earlier in Anchorage, where the pollution problem is wintertime carbon monoxide and the mandate is for oxygenated, not reformulated, fuel.

Price increases should surprise no one. Reformulated gasoline costs more than conventional gasoline does to make and so is bound to cost more at the pump. Health allegations about MTBE are more puzzling. Since they haven't arisen everywhere reformulated fuel is sold, they seem exaggerated if not fanciful. They may be concoctions of notoriously aggressive ethanol promoters, whose product also adds oxygen and octane to gasoline but relies on heavy tax subsidies.

Nevertheless, if fuel consumers think they're paying too much for a product that makes them sick, the people who mandate, make, and market that product have a serious problem. It's a problem that might turn political.

House Republicans, fresh from their 100 day legislative blitz over the Contract with America, might come to view overreaching Clean Air Act amendments as fodder for their limited-government agenda. Consumer reactions against reformulated gasoline and vehicle inspection requirements certainly energize the issue. So does the presidential candidacy of House Majority Leader Bob Dole, whose coziness with the ethanol lobby could become a pressure point useful to House Republicans wanting to prod him on the legislation they have sent his way.

Any new look at gasoline reformulation would renew questions about the need for oxygen in fuel designed to combat ozone pollution. While oxygenates do enhance combustion and boost octane, they also can aggravate ozone formation by raising gasoline volatility. By relaxing the oxygen requirement for reformulated gasoline, Congress thus could address consumer dislike of MTBE and avoid a new ethanol controversy without compromising the clean-air effort.

Refiners have good reason to hope this doesn't come to pass. They have invested much in their ability to meet current specifications for reformulated gasoline, which means MTBE. A steady congressional course on reformulated gasoline looks best.

MARKET PROBLEM REMAINS

But what if consumers continue to reject gasoline containing MTBE? The easy answer is a switch to oxygenates based on ethanol. Yet the costs of that strategy would quickly raise political questions and eventually steer the issue back to Congress anyway.

Refiners must sell gasoline, and gasoline needs octane. That much is certain. Less certain than anyone thought they would be at this point are the roles that politics and oxygen play in the business and chemistry of gasoline.

Copyright 1995 Oil & Gas Journal. All Rights Reserved.

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