WASHINGTON -- More than six months after President Bush signed national energy legislation into law, the Environmental Protection Agency (EPA) has finally revoked the 2% oxygen content requirement for reformulated gasoline (RFG) nationwide. The move, which was mandated by the energy billalong with increased ethanol usagewill provide some extra breathing room for marketers doing business in states where oxygenate choice was limited.
We've been waiting since the energy bill passed for them to get it done, Dan Gilligan, president of the Petroleum Marketers [image-nocss] Association of America (PMAA), told CSP Daily News. For a while there, there were rumors that the ethanol industry was secretly lobbying EPA to take it slowlythat they didn't want the oxygenate mandate waved too quickly. I think the industry reacted pretty aggressively to that, called EPA and had members of Congress call EPA to put in no certain terms that this needed to be done ASAP.
The Society of Independent Gasoline Marketers of America also heralded the elimination of the mandate: SIGMA supported the oxygenate mandate repeal and is pleased that EPA took these steps to remove the 2% oxygen requirement, Susan Broughton, director of education and communications, told CSP Daily News.
Why the rush? Because the 1990 Clean Air Act required that gasoline sold in metropolitan markets contain 2% oxygen by weight. And one of the two most popular oxygenatesmethyl tertiary butyl ether (MTBE)was deemed a public health risk and has since been banned or its use limited in 17 states.
But for marketers doing business in those states, ethanol has not always been a readily available alternative. And the situation became even dicier for distributors who sold fuel both in states that allowed MTBE usage and in those that outlawed it.
For example, Gilligan cited New York, which banned MTBE usage in 2004, and Pennsylvania, which has not taken action. New York's an enormous state with a long border against Pennsylvania, so it's a problem for marketers if they're picking up MTBE-blended gas in Pennsylvania and transporting it into New York or vice versa, said Gilligan. It creates all kind of border issues. It also was challenging for marketers who were storing or picking up both blends at the rack to keep them separated, he noted.
The lifting of the mandate goes into effect Saturday, May 6, nationwide, except in California, where it will take effect 60 days after its publication in the Federal Register, the EPA announced. Although it means states will no longer have to add any oxygenate to RFGestimated to make up 30% of gasoline sold nationwideit doesn't necessarily put the brakes on ethanol usage.
I think we will see the industry work very hard to try to find alternatives to ethanol in some marketplaces, said Gilligan, noting that refiners in California have already claimed to be able to formulate gasoline to RFG standards without any oxygenate. On the other hand, as an industry, we have signed on to an 8.5-billion-gallon ethanol mandate, [so] we're obviously going to be blending barrels of this stuff for years to come.
Click here to view EPA's RFG website.
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