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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 ethanol

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


Key product quality changes

ON THE BOOKS

Low sulfur gasoline 2004-2006

Gasoline toxics controls (MSAT) 2002

Ultra-low-sulfur diesel (on- road) 2006-2010

Limitation on ether use (States) 2003-2004

UPCOMING?

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 strain

Other product clean up (sulfur reduction jet fuel, home heating oil)

Key Product Quality Changes

Source: DOE Policy Office


Where we are today
Where We Are Today

Source: EIA



Closure rate slowed and capacity growth increased
Closure Rate Slowed And Capacity Growth Increased

Note: Historical shutdowns are for years 1990-1994 and 1995-1999.

Source: EIA




Domestic capacity is expected to grow

Time Period

Annual Average Shutdown Capacity

(MB/CD)

Annual Growth of Continuously Operating Capacity

1990-1995

139

0.5%

1995-2000

96

2.0%

2000-2007

60

2.0%

Historical shutdowns are for years 1990-94, 1995-1999.

Domestic Capacity Is Expected To Grow

Source: EIA



Losing mtbe not just mtbe volume loss
Losing 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
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
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: EIA


Mtbe and ethanol property comparison
MTBE 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


Mtbe ban gasoline yield impacts

LOSS OF GASOLINE YIELD

Substitute Ethanol for MTBE

But Only Need Half As Much Ethanol for Same Oxygen

Remove “Light Ends” to Keep RVP Down

Remove “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 Used

Product Imports If Available

MTBE Ban Gasoline Yield Impacts


2007 loss of volumes when moving from mtbe to ethanol add backs constant inputs mb d
2007 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: EIA


2007 loss of volumes when moving from mtbe to ethanol further losses constant inputs mb d
2007 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 production

Source: EIA


To make up volumes
To Make Up Volumes Further Losses

  • 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 mtbe
Meeting U.S. Gasoline Demand: Further Losses 2000-2007 Input and Import Increases With and Without MTBE

Source: EIA


Comparison of 2000 2007 gasoline imports and production
Comparison of 2000-2007 Gasoline Imports and Production Further Losses

Production

Net Total Imports

Source: EIA


Conclusion
Conclusion Further Losses

  • 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