What changed with gasoline that caused such a big shift in its distribution and price?
Octane. Since the very early days of gasoline, octane has been a major issue. The early gasoline engine was almost doomed to failure by the fact that it was hard to control the burn of early automotive gasoline, and if it burned too quickly, the engine would knock, and engine damage would occur. Ironically, ethanol had its chance to be the first octane-enhancer of choice, but lost out to the lead industry. Lead was added to gasoline between the mid 1920's and the mid 1970's to boost the octane, which slowed down the burn of gasoline. This lead octane-enhancer additive was removed from gasoline in the mid 1970's because lead poisoned the catalytic converters that all new automobiles were required to have.
The phase out of lead in the mid 1970's was the biggest change in the history of gasoline. Fortunately, there was a more effective alternative, an octane-enhancer and blending agent known as MTBE, methyl tertiary-butyl ether. An octane blending agent makes up a larger percentage of the gasoline whereas an additive makes up a small percentage of the final gasoline product. MTBE could add 10-15% to the gasoline supply compared with lead's additional 1%.
MTBE was the lead substitute of choice for the last 30 years (until 2006), providing for a homogeneous and easy to produce supply of gasoline which integrated other fuel components into the fuel stream, namely, cheap methanol and liquid petroleum gasses (LPGs). Methanol and LPGs cannot be added to gasoline separately, but when the two components are chemically combined together, they produced MTBE.
Most common composition of gasoline you get at the pump today:
* 89% low octane base gasoline
* 10% octane blending agent (adding the octane to gasoline)
* <1% additives (detergents, anti-corrosive agents, etc.)
After loosing the octane-enhancer game to lead in the mid 1920's, ethanol is once again making another major appearance in our gasoline supply as the subsidized orphan child of the octane game. Ethanol is an inferior blending agent to other alternatives that are available to refiners when making gasoline. .
Adding ethanol to gasoline requires clean burning liquid petroleum gas (LPGs) such as, butane, to be removed from the gasoline because ethanol causes LPGs to leach out, resulting in an increase in ground level ozone pollution-SMOG. This is especially true in the summer months in "conventional gasoline areas" which have an EPA waiver that allows gasoline with 10% ethanol to emit more smog producing gasoline vapors. Gasoline supply wasted into thin air to accommodate ethanol! In addition, many of the other blending agents are made from natural gas, meaning the refiner can choose to use natural gas, or crude oil, as the feedstock for a major portion of the gasoline. Ethanol limits the use of other commonly available blending agents sourced from clean and abundant natural gas supplies. MTBE, which a major portion can be made up of natural gas which can be supplied from large US reserves, and added to gasoline at an average of 15%. This supply of clean and efficient blending agent is gone from the market because old underground gasoline tanks leaked and polluted drinking water supplies. MTBE is very difficult to remove once it has contaminated ground water. Several states banned MTBE for this reason, and a flood of lawsuits on contaminated ground water resulted in MTBE being voluntarily removed from gasoline by the oil companies. MTBE has been replaced with ethanol, which is produced in resource intensive and destructive process of growing, fermenting corn, which historically has been an important food product.
The massive instability we are experiencing in the gasoline market is because of OCTANE and our need to enhance gasoline with it:
* Purging MTBE reduced the gasoline supply and
* Ethanol is an inferior blending component.
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