Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...

For further details on RVP reduction costs, see Section 7.4.2 of the RIA.
2. Cost Savings For Phasing Out Methyl Tertiary Butyl Ether (MTBE)
The Energy Act rescinded the oxygen standard for RFG and when the provision
took effect, U.S. refiners stopped blending MTBE into gasoline. When MTBE use
ended, the operating costs for operating those plants also ceased. The total costs saved
for not operating the MTBE plants is calculated by multiplying the volume of MTBE no
longer blended into gasoline with the operating costs for the plants producing that MTBE.
We determined the operating costs saved by shutting down these plants. The
volumetric feedstock demands and the operating costs factors for each of these MTBE
plants are taken from literature. We estimated the MTBE operating costs to be $1.40 per
gallon for captive and ethylene cracker plants, $1.48 per gallon for propylene oxide
plants and $1.55 per gallon for merchant operating costs. Weighted by the percentages
for domestic MTBE production, the average cost savings for no longer producing MTBE
is estimated to be $1.46 per gallon.
We also credited MTBE for its octane blending value. MTBE has a high octane
value of 110 (R+M)/2 which increases its value compared to gasoline. This high octane
value partially offsets its production cost. The cost of octane is presented above in
subsection VII.(A)(1)(c) and is applied to the difference in octane value between MTBE
and the average of the various gasoline grades (88 (R+M)/2). Accounting for MTBE’s
octane value reduces its cost down to $1.27 to $1.38 per gallon depending on the PADD.
When accounting for the volume of MTBE removed, we also adjust for its energy
content, which is 93,500 BTU per gallon.
For further information on costs savings due to MTBE phaseout, see Section 7.4.3
of the RIA.
3. Production Of Alkylate From MTBE Feedstocks
Discontinuing the blending of MTBE into U.S. gasoline is expected to result in
the reuse of most of the primary MTBE feedstocks, isobutylene, to be used to produce
alkylate. Alkylate is formed by reacting isobutylene together with isobutane. Prior to the
establishment of the oxygen requirement for RFG, this isobutylene was, in most cases,
used to make alkylate. Another option would be for reacting isobutylene with itself to
form isooctene which would likely be hydrogenated to then form isooctane. However,
our cost analysis found that alkylate is a more cost-effective way to reuse the isobutylene,
even after considering isooctane’s higher octane content. The cost for converting to
alkylate is estimated to be $1.42 per gallon for captive (in-refinery) plants and ethylene
cracker plants, $1.46 per gallon for propylene oxide plants and $1.52 per gallon for
merchant MTBE plants. We believe that the cost for converting merchant MTBE plants
to alkylate is too high to support its conversion, thus the conversion cost is estimated to
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