United States Office Of Solid Waste And EPA 510-F-97-016 Environmental Protection Emergency Response Januaary 1998 Agency (5401G) www.epa.gov/OUST/mtbe Office Of Underground Storage Tanks MTBE Fact Sheet #3 Use And Distribution Of MTBE And Ethanol Background volume) in gasoline. Be-cause ethanol has a higher oxygen content, it can meet this requirement with a concentration of Methyl tertiary-butyl ether (MTBE) and 7.3 percent (by volume). The RFG ethanol are the most common oxy- Program re-quires 2.0-percent oxygen genates used to meet the requirements (by weight) throughout the year in the for the U.S. EPA’s Reformulated Gas- most pollu-ted metropolitan areas. oline (RFG) and Oxygenated Fuel MTBE meets this level with an 11- (Oxyfuel) Programs. Both additives percent (by volume) concentration, and have been used in gasoline in the United ethanol can be used with a 5.4-percent States since 1979. MTBE was (by volume) concentration. originally added as an octane-enhancing replacement for lead. Eth-anol was originally introduced to make gasohol Extent Of MTBE And (i.e., 10-percent ethanol in gasoline) as Ethanol Use In The United part of a program to reduce reliance on States oil imports. Approximately 30 percent of all gaso- Summary Of Two U.S. line in the United States contains fuel EPA oxygenates for compliance with RFG Clean Air Programs requirements. An additional 4 percent is used for compliance with Oxyfuel The Oxyfuel and RFG Programs were requirements. MTBE, which is the most initiated by the U.S. EPA in 1992 and common fuel oxygenate, is used in more 1995, respectively, to meet require- than 80 percent of oxygenated fuels. ments of the 1990 Clean Air Act Since 1993, MTBE has been the second Amendments. The Oxyfuel Program most produced organic chem-ical requires the use of gasoline with 2.7- manufactured in the United States. percent oxygen (by weight) in areas with Ethanol, which is the second most high levels of carbon monoxide during common fuel oxygenate, is used in about the fall and winter. When MTBE is 15 percent of the oxygenated fuels. used to meet this require-ment, it is used Other oxygenates, which consti-tute the at a concentration of 15 percent (by remaining 5 percent of the market,

January 1998 MTBE1 Fact Sheet #3: Use and Distribution include tertiary amyl methyl ether fer. Because MTBE-blended gasoline (TAME), ethyl tertiary butyl ether has a lower vapor pressure than ethanol- (ETBE), di-isopropyl ether (DIPE), and blended gasoline, MTBE is the preferred tertiary butyl alcohol (TBA). oxygenate in warm weather.

In additional to its use as a fuel oxy- Convenience–MTBE genate, MTBE is widely used for octane enhancement in mid- and high-octane The cost of transportation and the con- blended conventional gasoline, typically venience of use favors MTBE over at concentrations ranging from 2 to 8 ethanol. Because MTBE is more com- percent (by volume). It may also be patible with gasoline, it can be blended found in regular grade gasoline at lower at the refinery and distributed with concentrations. The Oxygenated Fuels gasoline through pipelines. Ethanol, on Association esti-mates that about 70 the other hand, must be shipped percent of all gasoline in the United separately from gasoline and added at States contains MTBE at varying the distribution terminal soon before concentrations. As a consequence of the use. If ethanol-blended gasoline is ex- wide-spread use of oxygenated fuels, posed to water or even water vapor (as underground storage tank regulators in pipelines), ethanol will bring the cannot assume that the gasoline in their water into solution and make the gaso- region is free of MTBE just because the line unusable. In addition, if ethanol- tank is located outside an RFG/Oxyfuel blended gasoline is stored for an exten- area. ded period, the ethanol will begin to separate from the gasoline. As a re-sult, Although it is difficult to predict the ethanol is often manufactured close to type of oxygenate used in a specific the point of use or shipped by rail, gasoline, there are general trends in their increasing the cost of its use. use. Ethanol is used primarily during the winter months to meet the Tax Incentives--Ethanol requirements of the Oxyfuel Program. MTBE is used throughout the year, but Market price and tax incentives play a its use increases in summer months as it major role in the use of MTBE and replaces ethanol in regulated areas. ethanol. Although the market price of Three major factors have influenced how MTBE is typically lower than that of these two fuel oxygenates are used in ethanol, when the government sub-sidies petroleum products. are included, ethanol often costs less. The federal government provides a Lower Vapor Pressure--MTBE subsidy of $0.54 per gallon of ethan-ol when it is blended in gasoline at In addition to requiring that fuels burn concentrations between 5.4 percent and cleaner, EPA requires areas with high 10 percent (by volume). Further-more, levels of smog (including but not lim- 12 states (Alaska, Connecticut, Hawaii, ited to RFG areas) to reduce the vapor Iowa, Illinois, Kansas, Minne-sota, pressure of gasoline in the summer Missouri, North Dakota, Nebras-ka, months in order to decrease the volatil- Ohio, and South Dakota) have additional ization of petroleum constituents at incentives for ethanol production and storage facilities and during fuel trans- use, making it even more competitive for these locations. Specific price

MTBE Fact Sheet #3: Use and Distribution 2 January 1998 information for MTBE and ethanol, accounts for less than 10 percent of total including the effect of federal tax RFG/Oxyfuel sales subsidies, is provided in Exhibit 1. Conclusion Additional Distribution Factor MTBE is preferred by the petroleum refinery industry over ethanol for octane Areas that are not required to use enhancement and RFG (2.0 per-cent RFG/Oxyfuel may still receive these oxygen, all year) because it is less fuels on occasion if they are near expensive, is easier to use, and creates a RFG/Oxy-fuel areas because of the gasoline with a lower vapor pressure. complexity and imperfections of Although MTBE is also used in win-ter gasoline distribution systems. This months, ethanol is commonly used in situation, called “spillover,” is most Oxyfuel (2.7-percent oxygen in the likely to occur when there is a shortage fall/winter months) because govern- of non-oxygenated fuel and a surplus of ment subsidies make it price competi- oxygenated fuel. The petroleum tive and because gasoline volatility is industry tries to avoid this situation not a major concern in cold weather. because RFG/Oxyfuel is more expensive Although these trends in the use and to produce than conventional fuel. distribution of oxygenated fuels are There are no accurate measurements of useful in helping to determine what type how often this situation occurs, but it of additive to expect in a region, they are probably not predictive. MTBE may be found in new or old releases in virtually all areas of the United States.

Exhibit I. Price Ranges For MTBE And Ethanol 1

1.40

1.20

1.00

0.80

0.60

0.40

0.20

0 Ethanol Without Subsidy MTBE Ethanol With Federal Subsidy

Price Range Price Range

1January 1995 through October 1997.

January 1998 MTBE3 Fact Sheet #3: Use and Distribution