Supply Impact of Losing MTBE & Using Ethanol

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Supply Impact of Losing MTBE & Using Ethanol. Joanne Shore Energy Information Administration OPIS National Supply Summit San Antonio, Texas October 2002. www.eia.doe.gov. ON THE BOOKS Low sulfur gasoline 2004-2006 Gasoline toxics controls (MSAT) 2002
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Supply Impact of Losing MTBE & Using EthanolJoanne ShoreEnergy Information AdministrationOPIS National Supply SummitSan Antonio, TexasOctober 2002www.eia.doe.govON THE BOOKSLow sulfur gasoline 2004-2006Gasoline toxics controls (MSAT) 2002Ultra-low-sulfur diesel (on- road) 2006-2010Limitation on ether use (States) 2003-2004UPCOMING?Increased ethanol use (mandated or otherwise)Improved diesel fuel quality (higher cetane, lower gravity)More ULSD (off-road)Further fuel type proliferation & associated distribution system strainOther product clean up (sulfur reduction jet fuel, home heating oil)Key Product Quality ChangesSource: DOE Policy OfficeWhere We Are TodaySource: EIARefinery Closures ContinueSource: EIAClosure Rate Slowed And Capacity Growth IncreasedNote: Historical shutdowns are for years 1990-1994 and 1995-1999.Source: EIAAtlantic Basin is Important Source of Gasoline ImportsSource: EIAPotential Increases in Gasoline Demand 2000 - 2007Source: EIATime PeriodAnnual Average Shutdown Capacity(MB/CD)Annual Growth of Continuously Operating Capacity1990-19951390.5%1995-2000962.0%2000-2007602.0%Historical shutdowns are for years 1990-94, 1995-1999. Domestic Capacity Is Expected To GrowSource: EIA2007 U.S. Balance With MTBESource: EIALosing MTBE – Not Just MTBE Volume Loss
  • MTBE represents over 10% RFG, 3% total gasoline supply
  • But physical & chemical properties are critical factor – No other hydrocarbon or oxygenate equals MTBE’s emission and engine performance characteristics
  • Emission Performance
  • CARB Predictive and Federal Complex models establish regulated emissions as function of chemical and physical properties
  • Emissions: VOCs, NOx, Toxics
  • Physical Properties that drive emissions:
  • RVP
  • Distillation profile (E200, E300 or T50, T90)
  • Chemical properties that drive emissions
  • Sulfur
  • Olefins
  • Aromatics
  • Benzene
  • Oxygen
  • Table Comparing Emissions (Complex Model)Note: Fractions of specific components in the hydrocarbon blend are the same in all cases. Emissions reductions are based on comparisons to 1990 industry average baseline fuel composition.Source: EIAMTBE and Ethanol Property Comparison
  • Both good octane and clean relative to other gasoline components
  • Issue is Ethanol relative to MTBE:
  • Higher oxygen content, so less volume needed for RFG oxygen requirement (5.8% v. 11.2% for MTBE)
  • Higher blending RVP than MTBE (VOCs problem)
  • Higher toxics than MTBE (MSAT issue)
  • Higher NOx in California model, not Federal model
  • LOSS OF GASOLINE YIELDSubstitute Ethanol for MTBEBut Only Need Half As Much Ethanol for Same OxygenRemove “Light Ends” to Keep RVP DownRemove “Heavy Ends” to Reduce Distillation Profile (Lower T50 & T90)BALANCE BY INCREASING:Crude Oil Throughput (utilization increase)Production & Purchase of Clean Streams (Iso-octane, alkylate)Volume of Ethanol UsedProduct Imports If AvailableMTBE Ban Gasoline Yield Impacts2007 Loss of Volumes When Moving from MTBE to Ethanol – Add Backs (Constant Inputs, MB/D)Assumes MSAT volume issues are resolved and rule does not hinder RFG production.Source: EIA2007 Loss of Volumes When Moving from MTBE to Ethanol – Further Losses (Constant Inputs, MB/D)(1) Assumes MSAT volume issues are resolved and rule does not hinder RFG productionSource: EIATo Make Up Volumes
  • Increase refinery crude oil inputs
  • Increase imports
  • Increase ethanol use
  • Increase alkylation production
  • Meeting U.S. Gasoline Demand: 2000-2007 Input and Import Increases With and Without MTBESource: EIAComparison of 2000-2007 Gasoline Imports and ProductionProductionNet Total ImportsSource: EIAConclusion
  • MTBE bans with ethanol create an RFG gap – at least 170 MB/D
  • MSAT adding another potential very large volume problem not accounted for in the 170 MB/D gap
  • Making up that gap is not easy
  • More alkylate than “readily available sources”
  • More imports from diminishing availability of clean streams
  • More crude inputs in tight U.S. capacity system
  • More ethanol blending
  • Challenges are large, and the nature of the solution is not clear at this time
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