Are Terminals Ready for a High-Octane Future?

New study questions whether midstream can handle the HOF

GOLDEN, Colo. -- As automakers pursue more powerful, streamlined engines that run on higher-octane fuel (HOF), a new study questions whether terminals today can actually store the greater quantities of ethanol blended into the finished product.

First, some background: Automakers are interested in turbocharged engines as one path to meeting the stringent Corporate Average Fuel Economy (CAFE) standards goal set for 2025, which requires the overall vehicle fleet to hit 54.5 miles per gallon in fuel economy, as well as make greenhouse-gas emission reductions. HOFs allow manufacturers to downspeed and downsize the engine for greater efficiency gains.

Fuel octane ratings in the United States usually range up to 93 for premium. HOFs would have an octane closer to 95 or 96. Ethanol is an easy way to boost octane; a fuel blend with 25% to 30% ethanol—E25 or E30—would get gasoline close to the octane required to boost efficiency.

According to data from the Oil Price Information Service, more than 1,200 terminals in the United States can store or are capable of storing ethanol. However, a technical report by the National Renewable Energy Laboratory (NREL) found several issues that could hinder their ability to take on greater volumes of ethanol for HOFs. They include:

  • Land availability for more tanks and unloading equipment, and to handle more truck traffic for ethanol deliveries
  • Most tanks at terminals already are near capacity
  • Increasingly time-consuming and challenging permitting and regulatory processes for adding new tanks
  • The need to reconfigure loading racks and bays to handle more equipment for filling trucks
  • Existing customers already have leased a “significant amount” of existing capacity at terminals under long-term contracts for specific fuels and volumes.

The conclusion: Terminals can add tanks to store more ethanol for HOF, but there must be a strong business case first.

To download the full report, click here.

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