Ethanol Blends Overtaking Gasoline Supply Chain

Alaska, Arizona, Arkansas, Business News/Analysis, Deliver Dispense, Florida, Georgia, Hawai'i, Infrastructure, Montana, Oklahoma, Policy, Terminals Transport, Texas, Washington, Wyoming

March 23, 2012

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(OPISNet.com) It’s been a long time coming, but ethanol now dominates the U.S. gasoline blending landscape. The number of wholesale terminals supplying only conventional clear gasoline for truck loadings has trimmed down to just nine out of about 325 rack locations in the United States, according to the latest OPIS and AXXIS rack information.

That means less than 3% of the nation’s midstream supply chain is ethanol-free at the racks, providing only the legacy clear unleaded to customers.

…The push from former President George W. Bush’s administration for fuel independence and ethanol blending requirements gave the United States the impetus to organize infrastructure for mass production, storage, blending and shipping of ethanol for use in gasoline. Fast forward seven years from the original U.S. renewable fuels standard (RFS) requirement and one is hard-pressed to find a wholesale fuel location that houses only conventional fuel and no ethanol.

Jobbers loading gasoline can lift only conventional clear fuel at the following racks: West Memphis, Ark.; Winslow, Ariz.; Rome, Ga.; Helena, Mont.; Wynnewood, Okla.; Mt. Pleasant, Texas; Moses Lake, Wash.; Newcastle, Wyo.

…For example, consumers are told to leave small-engine fuel tanks as full as possible while in storage when RFG is the only option. The same goes for gas cans, which should also be elevated from the ground when stored outdoors, in garages or in sheds. Engines with exposed fuel filters are especially vulnerable.

Consumers can find a privately run, user-maintained list of gas stations selling conventional clear gasoline at http://pure-gas.org.

…Even after the federal Volumetric Ethanol Excise Tax Credit (VEETC) expired on Dec.31, blenders have been able to save considerable amounts of money versus conventional gasoline suppliers — some as much as 15cts/gal. For about two years ethanol blending economics have been generally positive. In fact, 2012 has seen some of the best blending profits in that time — even without the tax credit.

…Methyl tertiary-butyl ether (MTBE) was once the lone gasoline additive competing with ethanol in the U.S. marketplace. But MTBE was denounced after it leaked from ground tanks and tainted drinking water. The high-grade octane enhancer is now only domestically produced by a couple of refiners strictly for export purposes. READ MORE

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