ANALYSIS – No Easing US Ethanol Import Duties as Demand Soars

WASHINGTON – US drivers may face higher pump prices this summer but Congress seems unlikely to lift import duties on much-needed ethanol to meet a domestic shortfall in the fuel additive due to opposition from US producers and farmers.

US oil refineries will need more ethanol to mix with their gasoline as they stop using the fuel additive MTBE, which has been banned by many states and resulted in lawsuits for polluting drinking water supplies.

The US Energy Information Administration, the Energy Department’s analytical arm, said the current transition to ethanol caught some oil companies off guard who were planning to eliminate MTBE at a later date.

Current US ethanol production averages 275,000 barrels per day, but the EIA says another 130,000 barrels a day of ethanol may be needed to replace MTBE.

Reuters