Price Comparison of the MTBE and
In an effort to significantly reduce summertime smog pollution and year-round air toxic emissions, Congress required the use of federal Reformulated Gasoline (RFG) beginning in 1995 in the nations most polluted cities. As part of these clean gasoline specifications, Congress required that every gallon of RFG contain cleaner-burning fuel additives called oxygenates. The two most commonly used oxygenates today are Methyl Tertiary-Butyl Ether (MTBE) (used in approximately 85 percent of all RFG), and ethanol (used in approximately 10 15 percent of RFG). The primary ethanol/RFG market is the Chicago/Milwaukee area.
According to both the Congressional Research Service and the Department of Energy, ethanol is more difficult and expensive to blend into the new RFG specifications than MTBE. This is true for two principle reasons:
1. Pipeline Transportation: Ethanols high affinity for water does not allow blending at the refinery, nor transportation through the existing nation-wide gasoline pipeline infrastructure. Ethanol must be stored in segregated tanks, can only be transported by rail or truck to its final destination and must be blended into gasoline at the terminal or retail station. As a result, the cost of blending ethanol into gasoline is significantly more than gasoline without ethanol.
2. Blending Characteristics: RFGs clean fuel specifications call for limits on gasolines ability to evaporate quickly in the summertime. Because ethanol blends evaporate more readily than MTBE blends, refiners are forced to spend additional resources and capital to produce a gasoline blendstock with ultra-low evaporative properties especially for blending with ethanol. This is a very expensive process and adds significantly to the cost of producing summertime gasoline ready for ethanol.
MTBE has none of these particular characteristics. It can be safely and efficiently blended into gasoline at the refinery and quickly shipped via the interstate gasoline pipeline system. As witnessed by last summers gasoline prices, the differences in the efficiency and convenience between MTBE and ethanol are apparent.
NOTE: The Chicago and Milwaukee markets utilize ethanol for RFG, while Milwaukee typically blends ethanol into conventional gasoline. The remaining markets blend MTBE into RFG during the summer.