This Week In Petroleum |
|
Released on May 7, 2008 Spring and the Summer-Grade Gasoline Price Bump One reason for the rising gasoline prices is the increase in demand as drivers roll down their windows and venture farther into the great outdoors. Another important, but less well known, reason is that May 1 marks the date for most of the country when more expensive-to-produce summer-grade gasoline is required (April 1 in southern California). The maximum allowable vapor pressure, which is measured as Reid vapor pressure (Rvp), is the primary distinction between winter- and summer-grade gasoline. When the weather turns warm, a high vapor pressure increases the evaporation of the gasoline into the atmosphere. The volatile organic compounds that are released from gasoline into the air not only contribute directly to health problems, but also indirectly through the formation of ground-level ozone and smog. Motor gasoline vapor pressure, which may be as high as 15 Rvp during the winter in some areas, is held to a level below 7 Rvp in many areas during the summer. Gasoline vapor pressure is also important for an efficiently operating automobile engine. Vapor pressure must be high enough to ensure the ease of starting an engine, but it must not be so high as to lead to vapor lock, which occurs when the gasoline in the engine’s fuel delivery system turns from liquid to vapor, thereby, stalling the engine. The U.S. Environmental Protection Agency first enforced new vapor pressure regulations designed to lower emissions of volatile organic compounds in June 1989. The vapor pressure standards were established for each of the 48 contiguous States during the summer months, from May 1 through September 15. The maximum allowable vapor pressure was lowered in phase 2 of the EPA regulatory program, which began on May 1, 1992. The reformulated gasoline program, which began in 1995, led to further reductions in allowable vapor pressure for about one-third of the gasoline sold in the nation. Since then, some cities and States have adopted their own vapor pressure limits (these unique local requirements are often referred to as “boutique” fuels). (A list of vapor pressure regulations in individual cities and counties that do not sell reformulated gasoline are available in the EPA’s Guide on federal and State Summer RVP Standards for Conventional Gasoline Only.) Gasoline with lower vapor pressure is generally more expensive to produce. For example, one method refiners use to reduce vapor pressure is to reduce the volume of normal butane, a liquefied petroleum gas with high vapor pressure, that is blended into gasoline. During the month of April, the spot (wholesale) price of normal butane on the U.S. Gulf Coast was about $1.88 per gallon while the spot price of conventional gasoline was $2.80 per gallon. Removing low-cost high-vapor pressure components from gasoline increases the average cost of gasoline. Estimating the increase in cost to produce summer-grade gasoline is difficult. However, just looking at the 5 cents per gallon difference between the recent spot prices of 7.8 Rvp and 9.0 Rvp conventional gasoline on the Gulf Coast tells us that it is significant. Watching a mother robin care for her chicks, one can only hope they will do well. Both the birds and those of us who enjoy birdwatching and other outdoor activities following a long winter undoubtedly appreciate the progress towards cleaner air that has been made in recent decades. This progress, however, does have an impact on the cost and price of gasoline. U.S. Average Gasoline Price Continues Upward Climb; Diesel Price Slips Slightly For the first time in four weeks, the U.S. average diesel price did not increase. Although the prices slipped from their all-time highs in all regions with the exception of the Rocky Mountains, prices everywhere remained above $4 per gallon. The U.S. average dropped by 2.8 cents to 414.9 cents per gallon, 135.7 cents higher than the price a year ago. East Coast prices dropped the most of any region, down 3.6 cents to 419.4 cents per gallon. In the Midwest, the price went down by 3.2 cents to 410.1 cents per gallon. The price in the Gulf Coast remained the lowest of any region, falling by 2.9 cents to 408.4 cents per gallon. The Rocky Mountain region tallied the only price increase, moving up by 1.5 cents to 415.6 cents per gallon, 116.1 cents higher than a year earlier. On the West Coast, the average price moved down by 0.9 cent (the smallest drop of any major region) to 430.3 cents per gallon. In California, the average price went down by just 0.8 cent to 438.2 cents per gallon. April Propane Build Above 5-Year Average Text from the previous editions of “This Week In Petroleum” is now accessible through a link at the top right-hand corner of this page. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||