11 May 2006 20:32 [Source: ICIS news]
WASHINGTON (ICIS news)--US fuel authorities told Congress on Thursday that gasoline supply problems created by a rapid switch from methyl tertiary butyl ether (MTBE) to ethanol are being resolved but they warned that fuel prices are unlikely to moderate unless the US produces more domestic oil.
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Bob Slaughter, president of the National Petrochemical & Refiners Association, told the House Energy & Commerce Committee that refiners have largely completed the seasonal product turnaround and that many have made the transition to ethanol for reformulated gasoline blends required under federal clean air mandates. He noted too that refinery utilisation has risen to more than 90% as operators completed maintenance turnarounds that had been delayed by last year’s hurricane hits on the Gulf coast.
Bob Dineen, president of the Renewable Fuels Association, a trade group representing ethanol producers, also told the committee that disruptions created by the shift to ethanol “were short-lived, and the transition is now largely complete.”
Slaughter cautioned that reducing retail costs for gasoline will be difficult as long as global oil prices remain elevated and he urged Congress remove barriers to increased production of domestic oil and gas, including restoration of access to now-closed offshore oil and gas reserves.
American Petroleum Institute president Red Cavaney told the panel that increased domestic energy production is essential. “Only government policies stand in the way of increasing access to these resources,” he said.
The committee meeting was called to explore US policy options that might reduce sharply increased domestic fuel costs.
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