|SNow we turn to another specification change –
MTBE bans. MTBE is used mainly in
reformulated gasoline (RFG) to meet the Federal oxygen requirement, reduce
air emissions, and add octane. However
concerns over MTBE’s potential to pollute water resulted in a number of
States banning its use.
|SIn addition to sulfur reductions, New York and
Connecticut banned MTBE this year, which raised concerns over how their
sources of RFG supply might shift.
Historically, over half of the RFG used in New York and Connecticut
came from imports. Reformulated
gasoline required in those areas now is produced by providing low-RVP RBOB in
the summer months that is blended with ethanol locally before being
distributed to retail outlets.
|SThe New York and Connecticut transitions were
highly successful with little transition impact to consumers, in spite of
very large supply and distribution system changes.
|SThe pie chart on the left shows domestic and
import RFG supply sources for these two States in 2001. About 44% of the two States’ RFG needs were
met by refiners on the East and Gulf Coasts (PADDs 1 and 3). In fact, most of the domestic product was
being met by East Coast refiners.
About 1/3 (34%) of the RFG was coming into New York and Connecticut as
blending components, and 22% was arriving as finished RFG
|SWe expected the Finished Imports to be
replaced with RBOB, but to our surprise, much less volume has arrived as
RBOB. Some blenders indicated they
were blending their own RBOB from components imported separately. Only 10% of the two States’ RFG needs were
being met with finished RBOB. Imports
of blending components and RBOB have now fallen to 47% of the total gasoline
needs from 56% in 2001, while domestic volumes increased. It also seems that more volume is coming
from the Gulf Coast to New York and
Connecticut than has been the case for quite some time.