United States
Environmental Protection
Agency
Office Of Solid Waste And
Emergency Response
(5401G)
EPA510-F-97-016
Januaary 1998
www.epa.gov/OUST/mtbe
xvEPA
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. Eth-anol 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 require-ment, it is used
at a concentration of 15 percent (by
volume) in gasoline. Be-cause ethanol
has a higher oxygen content, it can meet
this requirement with a concentration of
7.3 percent (by volume). The RFG
Program re-quires 2.0-percent oxygen
(by weight) throughout the year in the
most pollu-ted 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 chem-ical
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 consti-tute the
remaining 5 percent of the market,
January 1998
MTBEl Fact Sheet #3: Use and Distribution
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include tertiary amyl methyl ether
(TAME), ethyl tertiary butyl ether
(ETBE), di-isopropyl 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 esti-mates that about 70
percent of all gasoline in the United
States contains MTBE at varying
concentrations. 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
requirements of the Oxyfuel Program.
MTBE is used throughout the year, but
its use increases in summer months as it
replaces 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 burn
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
ethanol. Because MTBE is more com-
patible 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 ex-
posed to water or even water vapor (as
in pipelines), ethanol will bring the
water into solution and make the gaso-
line unusable. In addition, if ethanol-
blended gasoline is stored for an exten-
ded period, the ethanol will begin to
separate from the gasoline. As a re-suit,
ethanol is often manufactured close to
the point of use or shipped 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 sub-sidies
are included, ethanol often costs less.
The federal government provides a
subsidy of $0.54 per gallon of ethan-ol
when it is blended in gasoline at
concentrations between 5.4 percent and
10 percent (by volume). Further-more,
12 states (Alaska, Connecticut, Hawaii,
Iowa, Illinois, Kansas, Minne-sota,
Missouri, North Dakota, Nebras-ka,
Ohio, and South Dakota) have additional
incentives for ethanol production and
use, making it even more competitive for
these locations. Specific price
MTBE Fact Sheet #3: Use and Distribution
January 1998
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information for MTBE and ethanol,
including the effect of federal tax
subsidies, is provided in Exhibit 1.
Additional Distribution
Factor
Areas that are not required to use
RFG/Oxyfuel may still receive these
fuels on occasion if they are near
RFG/Oxy-fuel areas because of the
complexity and imperfections 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 petroleum
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
probably
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 per-cent
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 win-ter
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 Ethanol1
Ethanol Without Subsidy
Ethanol With Federal Subsidy
1 January 1995 through October 1997.
January 1998
MTBSFact Sheet #3: Use and Distribution
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