Fuel supply problems ahead?

As refineries stop using the fuel additive MTBE in reformulated gas and switch to ethanol, the East Coast and Texas may face price spikes at the pump.

WASHINGTON – The East Coast and Texas regions that use reformulated gasoline may face local supply disruptions and price spikes at the pump later this year as oil refineries switch to blending the motor fuel with ethanol, the government’s top energy forecasting agency warned Wednesday.

The government in May will no longer require refineries to use in gasoline oxygenates like MTBE, banned in many states for polluting drinking water supplies. Some oil companies are being sued for using the additive.

Many refineries, worried they could be held liable, plan to stop using MTBE, known as methyl tertiary butyl ether, and instead switch to cleaner-burning ethanol that is made mostly from corn.

However, the federal Energy Information Administration said U.S. ethanol production is running near capacity and “is not adequate to replace the MTBE lost at this time.”

Reuters