TIMELINE: A very short history of MTBE in the US

05 July 2006 20:15  [Source: ICIS news]

HOUSTON (ICIS news)--Methyl tertiary butyl ether, better known by its acronym MTBE, like a Hollywood superstar burned so brightly that it was destined to fade away well before its time was up. But as with so many ground-breaking American creations it continues to affect lives elsewhere on the globe.

At its zenith, MTBE commanded centre stage in both the oil and chemical industries as companies raced to build new plants to meet the anticipated surge in demand in the US gasoline market - the world's biggest - after the blendstock was touted as the cure-all to combat rising pollution.

By 2002, global demand for MTBE was approaching 22m tonnes/year, with the US responsible for nearly 60% of consumption. Plants had been built worldwide to service projected demand.

Yet by the late 1990s MTBE's demise in the US as a fuel oxygenate was on the cards. It started with drivers in Alaska feeling dizzy when filling their tanks in the artic winter. Reports of the chemical seeping into the ground water of health conscious Americans raised alarm. Calls for its use to be stopped in the US grew less than 10 years after its glowing debut.

The oil industry’s inability to plug leaking gasoline storage tanks did not help. Growing proof that MTBE was contaminating ground water forced refiners to give up its use, in the very conutry it was born, in 2005.

MTBE, which at one stage traded at up to double the value of premium gasoline, fell in price this spring to change hands at under the price of petrol in Europe. But the chemical is still being used in Europe and elsewhere in the world where little or no evidence of groundwater pollution risks has handed companies which had spent many million building production units some reprieve.

Many are converting their plants to produce the greener blendstock - ethyl tertiary butyl ether (ETBE) - which is made from agriculturally-based ethanol.

Listed below is the short history of MTBE in the United States.

HISTORICAL

May 2006 - Deadline to phase out of MTBE passed on 6 May. Market sources said ethanol was getting to the fuel pumps, but that logistical efficiency remained questionable.

April 2006 - Spot shortages of gasoline developed in several eastern US states due to logistical problems in getting adequate ethanol supplies to some gasoline terminals. Among the states affected were Pennsylvania, Virginia, Maryland and New Jersey.

March 2006 - The National Petrochemical & Refiners Association predicted US refiners would be hard pressed to maintain a gasoline supply for the nation during its transition to ethanol blends, in part because of Congress’ failure to enact limited liability protection for producers of MTBE.

February 2006 - The EPA said it would revoke the 2% oxygenate rule for gasolines on 6 May. Federal energy officials predicted that the rapid loss of MTBE as an oxygenate and inadequate ethanol capacity likely will cause gasoline shortages and price hikes in parts of the US.

August 2005 - Passage of the US Energy Policy Act mandates the end of the 2% oxygenate rule and includes the nationwide renewable fuels standard that will double the use of ethanol and biodiesel by 2012. Also, New Jersey became the 25th state to enact a ban on the sale of gasoline containing MTBE.

July 2005 - US Senate passes reform of US energy laws. Under those reforms, Congress did not grant companies making the gasoline additive MTBE the legal protections they had sought from groundwater pollution lawsuits.

November 2004 - The 108th Congress ended without taking action on an energy bill. Congress was expected to take up the issue in its next session.

April 2004 - The US Senate rejected amendments that would have advanced energy legislation to remove the 2% gasoline oxygenate standard, mandate ethanol use and boost natural gas production.

March 2004 - US Representative Joe Barton (Republican – Texas), then the new chairman of the House Energy and Commerce Committee, said that any energy bill passed by Congress must include MTBE liability protection.

February 2004 - Republican Senate leaders planned to introduce a slimmed-down version of the prior year's failed energy bill that would drop liability protection for MTBE producers in groundwater pollution lawsuits.

June 2003 - The US Senate passed an amendment to energy legislation that would require refineries to nearly triple the use of ethanol by 2012.

July 2002 - ExxonMobil said it would phase out MTBE as an oxygenate and switch to ethanol in California by early 2003.

May 2002 - BP, California's largest gasoline supplier, said it planned to stop using MTBE as a fuel oxygenate and switch to ethanol in the state by the end of 2002.

April 2002 - The US Senate passed a bill that would triple the amount of ethanol used in cleaner-burning gasoline over the subsequent decade while phasing out the use of MTBE as an oxygenate within four years.

Additionally, California Governor Gray Davis postponed by one year a 1999 order that would have banned MTBE by the end of 2002. The governor said the delay was needed to give refiners more time to switch from MTBE to ethanol and avoid fuel shortages that could cause gasoline prices to increase.

June 2001 - The EPA denied California’s request to waive the federal oxygen content requirement for reformulated gasoline.

September 2000 - The Senate Environment and Public Works Committee voted 11-6 for a bill to phase out use of MTBE in US gasolines over a four-year period and to dramatically boost US use of ethanol to replace MTBE.

March 2000 - US EPA administrator Carol Browner petitioned Congress to amend the 1990 Clean Air Act "to significantly reduce or eliminate the use of MTBE in gasoline."

July 1999 - A special panel appointed by the US Environmental Protection Agency (EPA) called for a substantial reduction in the use of MTBE, which had contaminated groundwater supplies across the country.

April 1999 - California asked for a federal waiver to be excused from the Clean Air Act requirement that reformulated gasoline (RFG) contain at least 2% oxygen by weight. California state officials feared that corn-based ethanol might not be an adequate replacement for MTBE.

March 1999 - California banned the fuel additive MTBE. Governor Gary Davis said the chemical must be eliminated by 31 December 2002, citing “a significant risk to California's environment associated with the continued use of MTBE in gasoline.”

January 1995 - The requirement for reformulated gasoline was implemented. The nine-worst ozone nonattainment areas in the country - Los Angeles, California; San Diego, California; Hartford, Connecticut; New York, New York; Philadelphia, Pennsylvania; Baltimore, Maryland; Houston, Texas; Milwaukee, Wisconsin and Chicago, Illinois – are required to sell gasoline containing at least 2% oxygenates, typically methyl tertiary butyl ether (MTBE).

November 1990 - Amendments to the Clean Air Act were adopted, one of which required the use of reformulated or alternative fuels in the country’s most polluted areas.

Further information is available on the following websites:

NPRA:
http://www.npradc.org/issues/fuels/ethanol_mandate.cfm

Renewable Fuels Association:
http://www.ethanolrfa.org/policy/regulations/federal/standard/

By: Staff Reporter
+44 20 8652 3214

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