Ethanol Transition Raises Concerns About Reformulated Gasoline Supply
December 29, 2006
• by Staff
WASHINGTON, D.C. --- The Energy Department reported that in recent weeks, the changeover from methyl tertiary butyl ether (MTBE) to ethanol in reformulated gasoline continues to raise concerns about U.S. gasoline markets in the Northeast and parts of Texas. Those areas are the last remaining MTBE reformulated gasoline markets.
Issues of concern include whether there is enough ethanol and whether the logistics of transportation, storage and blending are adequate. Another concern is whether the supply of reformulated blendstock for oxygenate blending (RBOB) is adequate.
"Tight specifications for RBOB, especially Reid Vapor Pressure (RVP) limitations, make it more difficult and costly to produce, and some refineries in the U.S. may find it difficult to produce as much RFG when ethanol is used as they formerly made when MTBE was used," the Energy Department's Energy Information Administration reported. "While this doesn't necessarily mean that RFG supply will be reduced, it does imply that there will be a change in the pattern of supply."
What's more, the seasonal transition, coupled with the continuing effects of last fall's hurricanes on refinery operations, have further complicated the matter.
Originally posted on Fleet Financials