Advanced BioFuels USA

by James Osborne (Houston Chronicle)  At a Rice University forum last year, Mexican Energy Secretary Pedro Joaquin Coldwell was asked whether his government would allow refiners to increase the concentrations of ethanol in gasoline beyond the 5.8 percent that it had just approved. Coldwell gave an emphatic no.

“If it goes above that, it can generate a lot of ozone,” he said, referring to an air pollutant linked to increased asthma rates. “So that is the rule.” 

But just nine months later, the Mexican government changed its regulations to permit up to 10 percent ethanol in gasoline — the same level as the United States. That ruling is now under court review, but it represents a major victory for American ethanol producers, which only 18 months earlier had launched an intensive lobbying campaign to outmaneuver an entrenched chemical industry that has long dominated the Mexican fuel additives market.

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“Everyone in the fuel and gasoline business is down in Mexico right now,” said Kristy Moore, an Illinois-based energy consultant working for ethanol companies. “All my same people I work with in the United States, every major oil company.”

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Modern automobiles don’t run well on pure gasoline. Pistons misfire; engine parts wear down more quickly, so gasoline retailers have long relied on additives to help cars run more smoothly – what is referred to in marketing slogans as octane.

For decades, octane came from lead, which was banned as a gasoline additive in the 1990s, then the chemical methyl tert-butyl ether, or MTBE. Since 2004, however, approximately half of U.S. states have banned MTBE, a known carcinogen, after it was found leaching from underground storage tanks at gas stations into drinking water supplies.

Taking its place is ethanol, a biofuel largely made from corn that possesses a particularly high octane and now makes up 10 percent of the U.S. fuel supply. But across much of Asia, Latin America and even parts of Europe, MTBE remains in great demand.

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Even though MTBE production here is far below what it was a decade ago, it remains a more than $1 billion a year industry and growing, with output up more than 30 percent since 2014, according to the U.S. Energy Department.

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Last year, Mexico imported more than half of the entire U.S. output of MTBE – more than 8 million barrels.

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Ethanol lobbyists made the case that if Mexico was to achieve a gasoline market like the United States, where pump prices typically run about 30 percent cheaper, its best chance was to adopt the American ethanol standard of 10 percent, which would allow more U.S. gasoline to flow across the border.

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Their expansion into Mexico, however, will have to wait. A Mexican judge this week granted an injunction blocking the government from implementing the new ethanol mandate after Mexican environmental groups, led by Gabriel Quadri, a former presidential candidate, filed suit claiming that more ethanol in the fuel supply would worsen air pollution

Government officials are expected to appeal the ruling, according to Reuters, but it will likely delay implementation until at least next year.

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The U.S. Environmental Protection Agency describes high doses of MTBE as increasing the risk of cancer. But a presentation made to Mexican energy regulators in May by representatives of Exxon Mobil, one of the world’s largest chemical producers, described the potential harm if MTBE were to spill and leach into underground aquifers as “a disagreeable flavor” in drinking water supplies.  READ MORE

Mexico Raises Ethanol Allowance, Sparking Rush To Supply South-Of-The-Border Markets (High Plains Public Radio)