United States
Environmental Protection
Agency
Office Of Solid Waste And
Emergency' Response
(5401G) :
EPA510-F-98-003
Januaary 1998
www.epa.gov/OUST/mtbe
v>EPA
Office Of Underground Storage Tanks
MTBE
Fact Sheet #3
Use And Distribution Of
MTBE And Ethanol
Background
Methyl tertiary-butyl ether (MTBE) and
ethanol are the most common oxy-
genates used to meet the requirements
for the U.S. EPA's Reformulated Gas-
oline (RFG) and Oxygenated Fuel
(Oxyfuel) Programs. Both additives
have been used in gasoline in the United
States since 1979. MTBE was
originally added as an octane-enhancing
replacement for lead. Ethanol was
originally introduced to make gasohol
(i.e., 10-percent ethanol in gasoline) as
part of a program to reduce reliance on
oil imports.
Summary Of Two U.S. EPA
Clean Air Programs
The Oxyfuel and RFG Programs were
initiated by the U.S. EPA in 1992 and
1995, respectively, to meet require-
ments of the 1990 Clean Air Act
Amendments. The Oxyfuel Program
requires the use of gasoline with 2.7-
percent oxygen (by weight) in areas with
high levels of carbon monoxide during
the fall and winter. When MTBE is
used to meet this requirement, it is used
at a concentration of 15 percent (by
volume) in gasoline. Because ethanol
has a higher oxygen content, it can meet
this requirement with a concentration of
7.3 percent (by volume). The RFG
Program requires 2.0-percent oxygen
(by weight) throughout the year in the
most polluted metropolitan areas.
MTBE meets this level with an 11-
percent (by volume) concentration, and
ethanol can be used with a 5.4-percent
(by volume) concentration.
Extent Of MTBE And Ethanol
Use In The United States
Approximately 30 percent of all gaso-
line in the United States contains fuel
oxygenates for compliance with RFG
requirements. An additional 4 percent is
used for compliance with Oxyfuel
requirements. MTBE, which is the most
common fuel oxygenate, is used in more
than 80 percent of oxygenated fuels.
Since 1993, MTBE has been the second
most produced organic chemical
manufactured in the United States.
Ethanol, which is the second most
common fuel oxygenate, is used in about
15 percent of the oxygenated fuels.
Other oxygenates, which constitute the
remaining 5 percent of the market,
include tertiary amyl methyl ether
(TAME), ethyl tertiary butyl ether
January 1998
1 MTBE Fact Sheet #3: Use and Distribution
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(ETBE), diisopropyl ether (DIPE), and
tertiary butyl alcohol (TEA).
In additional to its use as a fuel oxy-
genate, MTBE is widely used for octane
enhancement in mid and high-octane
blended conventional gasoline, typically
at concentrations ranging from 2 to 8
percent (by volume). It may also be
found in regular grade gasoline at lower
concentrations. The Oxygenated Fuels
Association estimates that about 70
percent of all gasoline in the United
States contains MTBE at varying con-
centrations. As a consequence of the
wide-spread use of oxygenated fuels,
underground storage tank regulators
cannot assume that the gasoline in their
region is free of MTBE just because the
tank is located outside an RFG/Oxyfuel
area.
Although it is difficult to predict the
type of oxygenate used in a specific
gasoline, there are general trends in their
use. Ethanol is used primarily during
the winter months to meet the require-
ments of the Oxyfuel Program. MTBE
is used throughout the year, but its use
increases in summer months as it re-
places ethanol in regulated areas. Three
major factors have influenced how these
two fuel oxygenates are used in
petroleum products.
Lower Vapor Pressure-MTBE
In addition to requiring that fuels bum
cleaner, EPA requires areas with high
levels of smog (including but not lim-
ited to RFG areas) to reduce the vapor
pressure of gasoline in the summer
months in order to decrease the volatil-
ization of petroleum constituents at
storage facilities and during fuel trans-
fer. Because MTBE-blended gasoline
has a lower vapor pressure than ethanol-
blended gasoline, MTBE is the preferred
oxygenate in warm weather.
Convenience-MTBE
The cost of transportation and the con-
venience of use favors MTBE over eth-
anol. Because MTBE is more compat-
ible with gasoline, it can be blended at
the refinery and distributed with gasoline
through pipelines. Ethanol, on the other
hand, must be shipped separately from
gasoline and added at the distribution
terminal soon before use. If ethanol-
blended gasoline is exposed to water or
even water vapor (as in pipelines), eth-
anol will bring the water into solution
and make the gasoline unusable. In
addition, if ethanol-blended gasoline is
stored for an extended period, the ethan-
ol will begin to separate from the gaso-
line. As a result, ethanol is often manu-
factured close to the point of use or ship-
ped by rail, increasing the cost of its use.
Tax Incentives-Ethanol
Market price and tax incentives play a
major role in the use of MTBE and
ethanol. Although the market price of
MTBE is typically lower than that of
ethanol, when the government subsidies
are included, ethanol often costs less.
The federal government provides a sub-
sidy of $0.54 per gallon of ethanol when
it is blended in gasoline at concentra-
tions between 5.4 and 10 percent (by
volume). Furthermore, 12 states (Alas-
ka, Connecticut, Hawaii, Iowa, Illinois,
Kansas, Minnesota, Missouri, North
Dakota, Nebraska, Ohio, and South
Dakota) have additional incentives for
ethanol production and use, making it
even more competitive for these loca-
tions. Specific price information for
MTBE and ethanol, including the effect
MTBE Bact Sheet #3: Use and Distribution
January 1998
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of federal tax subsidies, is provided in
Exhibit 1. ; ;
Additional Distribution Factor
Areas not required to use RFG/Oxyfuel
may still receive these fuels on occasion
if they are near RFG/Oxyfuel areas
because of the complexity and imperfec-
tions of gasoline distribution systems.
This situation, called "spillover," is
most likely to occur when there is a
shortage of non-oxygenated fuel and a
surplus of oxygenated fuel. The petro-
leum industry tries to avoid this situation
because RFG/Oxyfuel is more expensive
to produce than conventional fuel. There
are no accurate measurements of how
often this situation occurs, but it proba-
bly accounts for less than 10 percent of
total RFG/Oxyfuel sales.
Conclusion
MTBE is preferred by the petroleum
refinery industry over ethanol for octane
enhancement and RFG (2.0 percent
oxygen, all year) because it is less
expensive, is easier to use, and creates a
gasoline with a lower vapor pressure.
Although MTBE is also used in winter
months, ethanol is commonly used in
Oxyfuel (2.7-percent oxygen in the
fall/winter months) because govern-
ment subsidies make it price competi-
tive and because gasoline volatility is
not a major concern in cold weather.
Although these trends in the use and
distribution of oxygenated fuels are
useful in helping to determine what type
of additive to expect in a region, they are
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 Ethand1
Price Range
Ethand With Federal Subsidy
Price Range
1 January! 995 through October 1997.
January 1998
3 MTBE Fact Sheet #3: Use and Distribution
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