New Ethanol Gasoline Cuts Fuel Efficiency – Expert
Date: 02-Mar-06
Country: USA
Author: Matthew Robinson
Ethanol is replacing MTBE, a suspected carcinogen, in production of reformulated gasoline (RFG) because of concerns the fuel additive may contaminate water supplies and leave oil companies open to law suits.
But for motorists in regions where reformulated gasoline is required, the shift may mean higher bills at the pump because ethanol-blended fuel is about 3 percent less efficient than MTBE blends, Mark Routt, a senior consultant for Energy Security Analysis Inc, said.
"That means to go the same distance, one's energy consumption will go up 2.5 to 3 percent," Routt said. "If gasoline is currently $2 a gallon, which means there is an additional 6 cents per gallon charge to go the same distance."
The US Energy Information Administration has warned that the East Coast and Texas regions which use RFG could face local supply disruptions and price spikes as ethanol production lags growing demand.
The increase comes after US consumers faced record gasoline prices last year after hurricanes disrupted refinery operations in the US Gulf Coast.
Reformulated gasoline is used in about 35 percent of the United States, typically in polluted urban areas. Ethanol and MTBE are added to RFG to reduce emissions.
US ethanol is generally made from corn from the Midwest farming belt, where lobbying groups have been supporting the blendstock's use for years in part to curb US dependence on foreign crude and product imports.
Midwest refiners currently blend locally produced ethanol into conventional, non-reformulated gasoline streams.
But Routt said drivers in the farm belt may be hit with higher costs as that ethanol moves to areas where it is the only option available to make RFG.
"This means people in Iowa are going to have to replace those volumes that are in higher demand elsewhere, and the price of gasoline there is going to have to go up," he said.
