Methyl Tertiary-Butyl Ether (MTBE):Conditions Affecting the ...

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Table 2-2 MTBE consumption levels of major consuming nations, 1994-98 (1,000 barrels/day) Country 1994 1995 1996 1997 1998 United States ........................... 174.9 221.2 247.4 266.3 251.9 Mexico ................................ 10.5 10.0 11.9 13.9 14.0 Italy .................................. 8.0 10.2 10.9 11.8 11.1 Republic of Korea ........................ 9.5 7.0 10.8 13.2 10.5 Taiwan ................................ 9.0 8.8 9.0 9.7 9.0 Germany .............................. 5.4 7.0 7.5 8.1 7.6 Spain ................................. 5.1 6.9 7.4 8.1 7.5 Japan ................................. 8.0 7.0 7.0 7.0 6.5 Venezuela ............................. 2.0 6.0 5.5 6.0 6.0 Source: Compiled from official statistics of the U.S. Department of Commerce; DeWitt & Co., MTBE and Oxygenates. diluent to reduce the amount of toxic substances such as sulfur and benzene in their product. In the United States and Finland, for example, gasoline is required to have a specific amount of oxygen, and gasoline producers use MTBE, among other chemicals, to meet this stricter standard. In the U.S. RFG program, gasoline must contain 2 percent oxygen by weight; when MTBE is used as the oxygenate, this translates into approximately 11 percent MTBE by volume. 8 Some industry analysts expect MTBE demand to grow outside the United States. 9 Although health concerns raised in the United States have the potential to slow MTBE consumption in other countries, 10 European producers, for example, believe that tank leakage is less prevalent in their domestic markets, rendering an MTBE ban in that region unlikely. 11 Production facilities continue to come onstream in some countries (e.g., Qatar). 12 Major Trade Flows The balance between MTBE production and consumption separates MTBE trading nations into three groups: major net exporting countries, countries with neither substantial net exports nor net imports, and major net importing countries. Major net MTBE exporting nations (those which export at least 50 percent of domestic production) tend to have at least one of two basic characteristics: abundant supplies of the appropriate natural resources–crude petroleum or natural gas–and either PO/TBA or butane dehydrogenation production. In 1994-98, this category included 8 DeWitt & Co., MTBE and Oxygenates, p. 45. Reformulated gasoline (RFG) must contain at least 2 percent oxygen by weight and no more than 1 percent benzene by volume. 9 Link, “MTBE Market Matures,” p. 16. 10 USITC fieldwork in the United States. 11 USITC fieldwork in Europe, Apr. 16-22, 1999. 12 USITC fieldwork in the United States. 2-3
Saudi Arabia, 13 Venezuela, the UAE, Malaysia, Canada, the Netherlands, France, and China. In France and the Netherlands, the butane dehydrogenation production method is not economical, so large-scale production plants use only the PO/TBA process. 14 China is unusual in that it has emerged as a large exporter of MTBE without large-scale production plants; Chinese MTBE is produced by numerous refineries. The other major exporters all use butane dehydrogenation plants to produce MTBE, either alone or in conjunction with other plants and refineries (see table 2-3). In terms of domestic demand, there is substantial variation among these major exporting nations. Saudi Arabia, Malaysia, and the UAE are not known to have significant domestic demand. In 1998, the share of production in other major exporting countries that was consumed domestically ranged from approximately 15 percent in Canada 15 to 48 percent in China. 16 In Canada, Venezuela, the Netherlands, France, and China, MTBE is used domestically both to boost octane and to improve air quality. 17 In these countries there are currently no oxygenate requirements, but MTBE is used to reduce other harmful gasoline components whose proportions are regulated. Canada, Venezuela, the Netherlands, France, and the UAE all use some MTBE domestically to produce RFG for export. 18 France also uses some ETBE for the same reasons. Venezuelan producers use TAME, and Canadian producers use some methylcyclopentadienyl manganese tricarbonyl (also known as MMT) and ethanol in blending gasoline. 19 For more on MTBE substitutes, refer to the section entitled Substitutes for MTBE in the U.S. Market in chapter III. The second group of countries neither export nor import more than 15 percent of their domestic MTBE production or consumption. The majority of countries which trade MTBE are in this group. These countries have a wide variety of profiles in terms of domestic production and consumption, but they share two common attributes: a lack of large-scale chemical plant MTBE production and relatively minor petroleum and natural gas resources. This group of 21 countries includes Argentina, Brazil, most of both Eastern and Western Europe, Japan, and Korea. In Germany, Spain, Japan, and, for most of 1994-98, Korea, among others, MTBE consumption was relatively high, driven by both high levels of gasoline consumption and air-quality concerns. 20 In other countries, including Brazil (which uses a large amount of ethanol), most of Eastern Europe, and Turkey, gasoline consumption was relatively low. Most of these countries have been increasingly using MTBE to replace lead as an octane enhancer. A few of these countries, including Spain, Belgium, and Brazil, use some MTBE in making RFG for export. 13 The Saudi Arabian MTBE market will be discussed in more detail in chapter IV. 14 DeWitt & Co., MTBE and Oxygenates, p. 125. There are 33 MTBE production facilities in Western Europe. Two of these, one in France and one in the Netherlands, together produce approximately one-third of Western European MTBE. 15 Ibid., p. 85. 16 Ibid., p.169. 17 USITC fieldwork in the United States; DeWitt &Co., MTBE and Oxygenates, p. 11. 18 Ibid.; official trade statistics of the U.S. Department of Commerce. 19 DeWitt & Co., MTBE and Oxygenates, pp. 76-77, 100, 123. 20 Ibid.; Hyung-Jin Kim, “Korean Oxygenates Rule Sparks MTBE Capacity Plans,” Chemical Week, June 15, 1994, p. 26. 2-4
Page 1 and 2: Methyl Tertiary-Butyl Ether (MTBE):
Page 3 and 4: ITC READER SATISFACTION SURVEY Meth
Page 5 and 6: U.S. International Trade Commission
Page 8 and 9: TABLE OF CONTENTS iii Page Abstract
Page 10: Tables-Continued TABLE OF CONTENTS-
Page 13 and 14: accounts for about 30 percent of U.
Page 15 and 16: volatile organic compound emissions
Page 17 and 18: gases in Saudi Arabia regardless of
Page 19 and 20: Register (64 F.R. 5312) of February
Page 21 and 22: eportedly purchased imported MTBE d
Page 23 and 24: Table 1-1. The four main sources of
Page 25: Table 2-1 MTBE production levels of
Page 29 and 30: The third group of countries, the m
Page 31 and 32: (1) in refineries using either thei
Page 33 and 34: production capacity is fairly recen
Page 35 and 36: Table 3-2 31 (...continued) In the
Page 37 and 38: Table 3-3 The cost of producing MTB
Page 39 and 40: accounted for approximately 94 perc
Page 41 and 42: exploring their options regarding a
Page 43 and 44: Table 3-7 U.S. MTBE import-to-consu
Page 45 and 46: Table 3-10 Average monthly and annu
Page 47 and 48: Table 3-12 Components of LDP unit v
Page 49 and 50: Transportation Costs Practically al
Page 51 and 52: Source: Compiled by the Commission
Page 53 and 54: the section describes health and en
Page 55 and 56: volume, 90 and contain no lead or h
Page 57 and 58: that opted in to the program, 112 m
Page 59 and 60: appendixes H and J). In addition, t
Page 61 and 62: prohibit the use of jet skis and, i
Page 63 and 64: produce disruptions in the fuel sup
Page 65 and 66: According to one source, the “vol
Page 67 and 68: level almost reached the record hig
Page 69 and 70: Europe consider ethanol to be too c
Page 71 and 72: TAME is produced in about five to s
Page 73 and 74: our continued economic growth.” 4
Page 75 and 76: with $5.5 billion in 1996. 17 As of
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Port in Madinat Al-Jubail. 35 Both
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Alujain was to have held about 30 p
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(presented in descending order). 59
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Using minimum estimated operating r
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The cost of producing MTBE from n-b
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Table 4-3 Butane dehydrogenation pr
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consumed domestically “as fuel an
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price would be determined by deduct
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Government Policies This section pr
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e available to all sectors in the K
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intent of the investment condition
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that “this is only a limited cush
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In another argument, several source
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Opinions within the industry differ
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4-34
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Appendix C Witness List
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Appendix D Glossary
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Gulf Cooperation Council (GCC)-the
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D-4
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MTBE Production Processes STEAM CRA
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Figure E-2 is not available in the
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dehydrated to form isobutylene) or
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Appendix F U.S. Production and Cons
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Table F-1 U.S. methanol producers,
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Table F-3 U.S. methanol production,
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increased during this period; Canad
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another 3 to 5 percent is reportedl
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2 percent. This growth rate was in
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Table F-6 Annual production of liqu
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Table F-7 U.S. annual production, t
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Appendix G U.S. Tariff Treatment an
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Appendix H Chronology of Events Rel
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Year MTBE-related incidents, academ
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Chronology of Events Related to the
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Appendix J Legislation and Other Ac
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Jersey introduced legislation that
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