Printer Friendly

NEW CLEANER GASOLINES NOW BEING MARKETED IN 39 MAJOR U.S. CITIES; STUDY PREDICTS GROWTH FOR MTBE, FUEL ETHANOL USE IN U.S. GASOLINE

NEW CLEANER GASOLINES NOW BEING MARKETED IN 39 MAJOR U.S. CITIES;

STUDY PREDICTS GROWTH FOR MTBE, FUEL ETHANOL USE IN U.S. GASOLINE
 WASHINGTON, Oct. 30 /PRNewswire/ -- President Bush's announcement earlier this month targeted to resolve outstanding technical issues for reformulated gasoline (RFG) sold during the summertime months starting in 1995, now sets parameters for projections of total RFG demand for oxygenate components methyl tertiary butyl ether (MTBE), tertiary amyl methyl ether (TAME), ethyl tertiary butyl ether (ETBE) and ethanol use in gasoline. The president's announcement also directed EPA to release long awaited oxygenated fuel regulations for the nation's first 39 city carbon monoxide reduction program, which begins Sunday, Nov. 1. Methyl tertiary butyl ether (MTBE) and ethanol will be the major oxygenates used by refiners in U.S. gasoline to comply with the new EPA regulations.
 The Clean Air Act Amendments of 1990 (CAA) regulations will have an enormous impact on composition of motor fuels across the United States, and have already prompted the refining and petrochemical industries to invest billions of dollars in new plants and equipment. Petroleum marketing is changing considerably with the advent of reformulated and other "clean" fuels now being marketed. According to Frederick L. Potter, president, Information Resources, Inc. (IRI): "Fuel reformulation is the refining industry's number one technical priority. Refiners are now designing strategies to ensure low cost regulatory compliance without disrupting traditional supply and distribution patterns established to maximize premium gasoline profitability. The increased use of oxygenates will increase gasoline yields, contribute to the octane supply pool and generally lower refinery octane values," Potter emphasized.
 The upcoming EPA oxygenated fuel program will raise the fuel standard in 39 cities that do not meet the Environmental Protection Agency's (EPA) air quality standards for carbon monoxide (CO). Beginning Nov. 1, three commercially available oxygenated fuels, MTBE, TAME and fuel ethanol, are expected to meet this new surging demand for cleaner gasolines.
 According to a new multi-client study released today by IRI, the Clean Air Act Amendments of 1990 will increase oxygenated fuel demand from 195,946 barrels per day (b/d) MTBE equivalent (ME) during the summer of 1992, to 764,279 b/d ME by the year 1997.
 The new IRI study, "Implementing the Clean Air Act: Fuel Reformulation and Regulations in the 1990s," analyzes the current EPA motor fuel regulatory agenda and forecasts resulting changes for the petroleum marketing, refining, oxygenated fuel and automotive industries.
 Gasoline Affected by CAA Legislation
 For the study, IRI defined the gasoline market affected during carbon monoxide (CO) and ozone (RFG) control periods. IRI determined that 62 billion gallons of gasoline are now marketed in areas that are in violation of CO and/or ozone standards. If these areas do not improve air quality, the national market for RFG could grow to over 70 billion gallons annually by the year 2000.
 Carbon Monoxide Non-attainment Areas
 Beginning Nov. 1, 1992, gasoline marketers in 39 cities are subject to CAA provisions that require that gasoline sold in these CO non-attainment areas to contain oxygenate such as MTBE, ethanol, TAME and ETBE. Over 16 billion gallons per year (bgpy) of gasoline, or about 13 percent of the nation's total sales, will be affected annually by the new oxygenated fuel standard. In most cases, EPA has proposed in its guidelines to states to implement oxygenated-fuel control periods from Nov. 1, through Feb. 29. Next winter, a number of these CO non-attainment areas will enforce longer program control periods beginning as early as September and ending as late as April. California, New York, Arizona and Washington state will have the longest CO control program periods.
 Ozone (RFG) Non-attainment Areas
 Beginning Jan. 1, 1995, nine major metropolitan areas and 11 states will require reformulated gasoline (RFG) standards to reduce ozone-forming emissions from automobiles. Approximately 22 bgpy of gasoline are solid in these nine metropolitan areas (IRI estimates net requirements affect only 15.3 bgpy of additional gasoline demand for oxygenates because many of these areas are also in non-attainment for CO and will already be governed by oxygenated-fuel programs for at least four months each year, beginning with the 1992-1993 control period).
 However, in addition to the federal nine-city RFG program, 11 states and the District of Columbia have already announced their intention to "opt-in" to RFG or expanded existing oxygenated fuel programs. These states (California, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, Pennsylvania, Rhode Island, Vermont, Virginia) represent reformulation requirement for an additional 25.5 bgpy of gasoline.
 By 1997, the IRI study assumes that the remaining ozone non- attainment areas will "opt-in" to the federal RFG program and will do so because next to EPA's enhanced inspection and maintenance program, the federal RFG program is the most cost-effective and least restrictive means of complying with EPA's ozone reduction standards. Other options to an RFG program would include shutting down or curbing output of certain industries, mandatory car pooling, odd-even drive days, bans on wood burning stoves or banning outdoor barbecuing. To dissuade cities from opting into the federal RFG program, refiners may voluntarily reduce Rvp below RFG requirements and EPA's existing Phase II volatility regulations. By the year 1997, over 70 percent of the nation's gasoline could contain oxygenated fuels.
 U.S. Oxygenate Supplies
 Demand for oxygenated fuels is projected to increase from 195,946 b/d ME in 1992, to 764,279 b/d ME by the year 1997. MTBE demand will increase from 91,053 b/d in 1992 to 468,610 b/d by 1997. Ethanol demand could increase from 56,699 b/d in 1992 to 159,820 b/d in 1997.
 If the projected increases in U.S. oxygenated fuel capacity and the demand for oxygenated fuels are realized, demand will begin to outpace supply beginning in 1995. If IRI's worldwide MTBE capacity projections are realized, expected worldwide MTBE supplies could be sufficient to meet U.S. demand until the 1997 RFG opt-in program requirements begin. Ethanol demand may reach a 8,632 b/d short fall by 1995 and could escalate to 72,410 b/d by the year 2000.
 U.S. oxygenated fuel demand will be met by domestic production of MTBE, TAME, ethanol, ETBE and oxygenate imports. By the end of 1992, the United States will have the capacity to produce 200,000 b/d of MTBE, 71,754 b/d of fuel ethanol and 10,000 b/d of TAME. MTBE imports are expected to increase annually, reaching 100,000 b/d by 1997-2000.
 Oxygenates and Alternative Fuel Use
 Overall, the United States consumes approximately 7 million b/d gasoline. Oxygenated fuels could reduce U.S. hydrocarbon gasoline consumption by 10 percent by the year 2000. In addition to the CAA, other legislative initiatives to reduce gasoline consumption and pollution also include the Comprehensive National Energy Policy Act of 1992, which the U.S. Congress passed earlier in the month before it adjourned. This energy legislation establishes a range of new initiatives, programs and incentive to replace gasoline and diesel fuels, with domestically produced "alternative fuels" such as compressed natural gas (CNG), methanol, ethanol, biodiesel, hydrogen and electricity.
 Federal fleets, as well as many state and local fleets will be affected as the programs take shape in the next few years. Eventually, private fleets of 10 vehicles or more will be phased-in requiring the use of clean burning alternative fuels.
 IRI is a Washington-based market research and data analysis organization specializing in providing U.S. motor fuel information services to the U.S. petroleum industry and the federal government.
 -0- 10/30/92
 /CONTACT: Frederick L. Potter of Information Resources, Inc., 202-554-0614 or 800-USA-FUEL/ CO: Information Resources, Inc. ST: District of Columbia IN: OIL SU:


IH -- DC002 -- 7068 10/30/92 11:18 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 30, 1992
Words:1293
Previous Article:WEICHERT, REALTORS APPLAUDS NEW RESPA RULING FOR REAL ESTATE INDUSTRY
Next Article:FINA REPORTS THIRD QUARTER FINANCIAL RESULTS
Topics:


Related Articles
AMOCO OIL ANNOUNCES ALL OF ITS GASOLINES SOLD IN THE RICHMOND, VA., METROPOLITAN AREA MEET 1992 FEDERAL EMISSION STANDARDS
AMOCO OIL COMPANY ANNOUNCES ALL OF ITS GASOLINES SOLD IN THE WASHINGTON METROPOLITAN AREA MEET 1992 FEDERAL EMISSION STANDARDS
ARCO CHEMICAL COMPANY ANNOUNCE SUCCESSFUL STARTUP OF ETBE PRODUCTION FACILITY
OXYGENATED FUELS ASSOCIATION FUNDED STUDY AT UNIVERSITY OF ALASKA FAIRBANKS PROVIDES POSSIBLE REASON FOR FAIRBANKS' REACTION TO OXYFUEL
FARM ORGANIZATIONS DISAPPOINTED WITH COURT RULING
N.J. RESISTANCE TO RFG TIED TO 'MEDIA BIAS'
MTBE AND OTHER OXYGENATES PROVIDE POSITIVE REFORMULATED GASOLINE BENEFITS
Tosco Selling Ethanol Gasoline in California; MTBE to Be Replaced in Six-Month Bay Area Test
New Report Gives Ethanol a Clean Bill of Health to Replace MTBE in Gasoline.
LOSSES IN THE MTBE SECTOR WILL PROVIDE OPPORTUNITIES FOR ETHANOL PRODUCERS.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters