US ethanol producers reportedly have told Congress there will be enough of their mostly corn-based product to meet the demands of oil refiners that will need more of the fuel additive to make petrol for the summer driving season.
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Citing the Renewable Fuels Association, a trade group that represents ethanol producers, Reuters said every major US oil refiner is expected to stop using the water-polluting fuel additive MTBE and switch to ethanol by 5 May, when the federal oxygenate requirement for reformulated gasoline is repealed.
At a senate environment committee hearing into the effect that phasing out MTBE will have on petrol supplies and prices, RFA president Bob Dinneen reportedly said about 2bn gallons of MTBE still sold in the Mid-Atlantic states, the Northeast region and Texas likely will be replaced by ethanol.
“There will be adequate supplies of ethanol to meet the demand created by the removal of MTBE,” Dinneen said. “I am confident the transition can, and will, go smoothly.”
Reuters noted that many oil companies are worried they could be sued if they keeping using MTBE (methyl tertiary butyl ether), which has been banned in many states, and are switching to ethanol.
But refiners are eliminating MTBE in favour of ethanol at a much faster rate than many energy experts had anticipated and ethanol is also difficult to transport, because it can’t be mixed with other petroleum products in pipelines, the report added.
To help meet the new ethanol demand, Dinneen reportedly said, US ethanol makers will add 500m gallons in production capacity before July and another 900m gallons in output by the end of the year.
Several refiners also have contracted with Brazilian and Caribbean-based ethanol suppliers to import the product, according to Dinneen, Reuters added. Ethanol shipments to the US market in 2006 are expected to be more than last year’s 130m gallons, he said.
