1 Introduction Halim Hamid and Mohammad Ashraf Ali Research Institute, King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia In the United States a debate is raging over the environmental consequences of the increased use of methyl tertiary-butyl ether (MTBE). Originally used as an antiknock agent for gasoline, this chemical is being used at concentrations of up to 10% (by weight) in the United States, and it is an oxygen source to improve gasoline combustion and hence reduce pollution from car exhausts. The controversy started with a report submitted in November 1998 by the University of California (UC Davis), on Health and Environmental Assessment of MTBE to the State of California. This study was authorized by the California Senate to assess a variety of issues and public concerns associated with the use of MTBE in gasoline. According to this report, MTBE and other oxygenates were found to have no significant effect on exhaust emissions from advanced-technology vehicles. There is no significant difference in the emissions reduction of benzene between oxygenated and nonoxygenated fuels. Thus, there is no significant additional air quality benefit to the use of oxygenates such as MTBE in reformulated gasoline (RFG), relative to alternative nonoxygenated formulations. There are significant risks and costs associated with water contamination due to the use of MTBE. MTBE is highly soluble in water and will transfer readily to groundwater from gasoline leaking from underground storage tanks, pipelines, and other components of the gasoline distribution system. In addition, the use of gasoline containing MTBE in motor boats results in the contamination of surface water reservoirs. It was stated in the report that the limited water resources in United States are at risk by using MTBE. If MTBE continues to be used at current levels Copyright © 2004 Marcel Dekker, Inc. and more sources become contaminated, the potential for regional degradation of water resources, especially groundwater basins, will increase. Severity of water shortages during drought years will be exacerbated. The UC Davis report recommended the phasing out of MTBE over an interval of several years, and that the refiners should be given flexibility to achieve air quality objectives by modifying the specifications to allow wide-scale production of nonoxygenated reformulated gasoline. On the other hand, there are studies and arguments that say that the case of MTBE has been polluted by politics, media hype, and economic competitive interests, and that MTBE is a safe, beneficial, reliable, proven, and cost-effective component in today’s clean-burning, beneficial gasoline. This has been proved by the extensively research and testing of MTBE for its performance, air quality improvement, health effects, and other benefits. In Europe, there continues to be support for MTBE to reduce air pollution, and there is a general belief that the real problem in the United States is leaking gasoline tanks, not the MTBE. This book presents a forum to discuss the MTBE controversy in a broad spectrum of views, studies, and arguments in favor of and against MTBE. Conclusions may be drawn regarding the risks and benefits involved with the use of MTBE with respect to air, water, and human health. I. WHAT IS METHYL tertiary-BUTYL ETHER? Methyl tert iary -butyl ether (MTBE) is a volatile organic compound made as a by-product of petroleum refinery operations by combining methanol derived from natural gas and isobutylene. MTBE is a gasoline additive that has been used as an octane enhancer since the phase-out of lead in the late 1970s. MTBE is more soluble in water, has a smaller molecular size, and is less biodegradable than other components of gasoline. Consequently, MTBE is more mobile in groundwater than other gasoline constituents, and may often be detected when other components are not. MTBE has been used extensively around the country to reduce motor vehicle emissions. The passage of the U.S. 1990 Clean Air Act (CAA) resulted in increased use of MTBE in order to reduce carbon monoxide and hydrocarbon emissions. MTBE also reduces air toxics emissions and pollutants that form ground-level ozone. MTBE has been the additive most commonly used by gasoline suppliers throughout most of the country. It has been used because it is very cost-effective in meeting air quality and gasoline performance goals. Severe air quality problems Copyright © 2004 Marcel Dekker, Inc. in U.S. cities during the 1980s prompted increased use of MTBE in petroleum. II. U.S. ENVIRONMENTAL PROTECTION AGENCY MEASURES In response to the growing concerns about MTBE present in water, the U.S. Environmental Protection Agency (EPA) appointed an independent Blue Ribbon Panel of leading experts from the public health, environmental, and scientific communities, the fuels industry, water utilities, and local and state governments. The panel was tasked to investigate the air quality benefits and water quality concerns associated with oxygenates in gasoline, and to provide independent advice and recommendations on ways to maintain air quality while protecting water quality. The panel in July 1999 recommended the following:  Remove the current congressional CAA requirement for 2% oxygen in RFG.  Improve the na tion’s water protection programs, including over 20 specific actions to enhance underground storage tank, safe drinking water, and private well protection programs.  Maintain current air quality benefits.  Reduce the use of MTBE substantially nationwide.  Accelerate research on MTBE and its substitutes. The EPA has taken further actions to significantly reduce or eliminate MTBE, and to address prevention and remediation concerns. The agency has been working closely with the U.S. Congress, the individual states, and the regulated community to accomplish these efforts. The EPA is also assisting Congress toward a targeted legislative solution that addresses the panel’s recommendations. The EPA released a legislative framework on March 20, 2000, to encourage immediate congressional action to reduce or eliminate MTBE and promote consideration of renewable fuels such as ethanol. On the same day, it announced the beginning of regulatory action under the Toxic Substances Control Act (TSCA) to significantly reduce or eliminate use of MTBE in gasoline while preserving clean air benefits. Meanwhile, the EPA is working with U.S. states to conduct an evaluation of underground storage tank (UST) systems performance to verify and validate how effectively leak detection and other UST systems are working. The EPA-released air quality trends report shows that cleaner cars and fuels accounted for almost two-thirds of total national emission reductions Copyright © 2004 Marcel Dekker, Inc. between 1970 and 1998. This is the period in which MTBE has had its maximum use in U.S. gasoline. III. REVIEW AND EVALUATION OF THE UC DAVIS REPORT BY INDEPENDENT BODIES (SRIC AND SRI) The report that follows presents key conclusions of an independent review of the UC Davis report mentioned above. The review was conducted by SRI Consulting (SRIC) and SRI International (SRI), having funding from the Oxygenated Fuels Association. The UC Davis report does not adequately appreciate and quantify the air quality benefits of the use of MTBE and reformulated gasoline (RFG) in general. Much of the report’s air evaluation focuses on emissions of MTBE and its combustion products, and on distinguishing MTBE benefits from California Cleaner Burning Gasoline (CBG). The benefits of reduced air toxics and other pollutants have been well documented in numerous reports by the U.S. EPA, the California Air Resources Board (CARB), and other regulatory agencies. The UC Davis conclusion that there is no significant air quality benefit to the use of oxygenates is not supported by research. The Davis report from which this statement is extrapolated is extremely limited. It does not represent the actual vehicle fleet or commercial gasoline formulations. Therefore, it is not an adequate foundation for major air quality policy decisions. The UC Davis report demonstrates that exposure to high levels of MTBE poses risks, but a variety of national and international organizations have concluded that continued use of MTBE in gasoline, which involves much lower levels of exposure, is safe. Scientific scrutiny of the potential health effects of exposure to MTBE is justified, but it is essential for the investigators to present the available research as complete as possible. The UC Davis report places unwarranted emphasis on the uncertainties in the research rather than making judgments based on the overall evidence and the intended use of the product. The conclusions and cost–benefit analysis in the UC Davis report do not focus on forward-looking policy issues. The decision should be based on the future benefits and risks to the state, not on events that have already occurred. The value and necessity of analyzing historical information is fully understood. A number of extrapolations made in the UC Davis report are not valid. Copyright © 2004 Marcel Dekker, Inc. A number of errors have been made in the UC Davis report regarding water contaminated by MTBE and the remediation cost calculations, the most significant of which is the inclusion of up to $1 billion in ‘‘sunk costs’’ for correcting contamination that has already occurred. Regardless of the ultimate magnitude of these costs, they will be incurred equally under all future MTBE use and MTBE ban options. Therefore, sunk costs are not relevant to policy deci- sions about the future use of MTBE. Their incorporation with other, legitimate costs makes it difficult to determine the appro- priate economics. The fuel analysis economics is another major component of the cost– benefit analysis that does not accurately reflect industry practices, commercial gasoline blends, or real world economics. After the UC Davis report was submitted, the California Energy Commission (CEC) published its report, Supply and Cost of Alternatives to MTBE in Gasoline. That report, which is based on a much more detailed analysis of gasoline formulations and industry conditions than the UC Davis report, concludes that ethanol and nonoxyge- nated gasoline blends will both be more expensive as compared to CBG with MTBE. It is believed that the CEC analysis provides a more accurate projection, but it still understates the cost of switching away from MTBE. Because of the specific errors cited above, the overall cost–benefit analysis in the UC Davis report leads to the wrong conclusions. The analysis shows that CBG with MTBE is the least costly of the three fuel options considered in the UC Davis study, and not the most expensive. From the review and evaluation of the UC Davis repo rt by independent bodies, it can be understood that there is not a clear basis, either economically or technically, for a regulatory ban or phase-out of MTBE. In fact, there are certainly considerable costs involved in switching to a new fuel, particularly if the switch is done hastily and without a complete assessment. SRIC concluded that MTBE remains a viable and economical choice for reducing automotive emissions in California, and therefore its use should not be banned. IV. RECENT REPORT OF THE COMMISSION OF EUROPEAN COMMUNITIES The scheduled phaseout of MTBE in California now appears both unnecessary and economically risky, due to an important new European Copyright © 2004 Marcel Dekker, Inc. study. A risk assessment by the European Union (EU) of MTBE has concluded that it does not pose a danger to human health, but tighter controls on the ha ndling and storage of the chemical are required. The Commission of European Communities, Europe’s official scientific inves- tigative body, released findings from a comprehensive study of MTBE health effects. The commission concluded that MTBE poses very limited risks that can be essentially mitigated by existing control mechanisms such as sound fuel tank management and code enforcement. The commission found no compelling reasons to limit use of MTBE in motor fuel. The European Commission’s findings are significant because they validate the findings of the World Health Organization’s International Agency for Research on Cancer, the U.S. National Toxicology Panel, California’s own Science Advisory Board for Proposition 65, and several other studies that all agree there is no compelling evidence that MTBE causes cancer in human beings. In fact, there is not a single peer-reviewed study that concludes that MTBE causes cancer in humans. The European Commission is yet another credible scientific body that has declared MTBE safe, given rigorous enforcement of the underground gasoline storage tank program. V. STATISTICS FROM THE CALIFORNIA DEPARTMENT OF HEALTH SERVICES Updated, cumulative statistics from the California Department of Health Services indicate that the actual detections of MTBE in drinking water have been extremely small, less than 1% of the water sources tested, and the trends have declined to very low levels. This marked improvement is due to advances made in upgrading underground gasoline stora ge tanks and better tank program enforcement throughout the state. Governor Gray Davis’s decree that MTBE be phased out from California gasoline by 2003 was based largely on two projections that have proven to be erroneous: that MTBE is a pervasive groundwater contaminant throughout the state, and that MTBE poses a health threat to Californians. The governor has extended the deadline for the MTBE ban due to supply and transportation problems associated with importing ethanol (the primary alternative to MTBE) to California. The California Energy Commission has concluded that a switch from MTBE to ethanol in California gasoline would result in significant gasoline price spikes. Governor Davis has stated publicly that ethanol-related price spikes at the gas pump could be as high as 50 cents per gallon. Better enforcement in California is now preventing gasoline leaks into groun dwater. The phaseout becomes even more questionable when Copyright © 2004 Marcel Dekker, Inc. considering new statistics compiled by the State of California indicating that MTBE detections in drinking water have largely been eradicated. The health benefits associated with the use of MTBE in gasoline outweigh the health risks posed by its detection in groundwater. By featuring reduced concentrations of known cancer-causing compounds such as benzene, cleaner burning gasolines containing MTBE have been demonstrated to reduce risk of cancer from toxics in automotive exhaust. The annual reduction from baseline fuel is somewhere between 10% and 50%, depending on other environmental factors. As a result of this air quality improvement, a large public health benefit accrues over the long run. While MTBE may render water unpalatable at very low concentra- tions, it does not pose a significant health risk when used in gasoline. MTBE does not accumulate in the body. It does not have pathological effects, nor does it injure developing offspring or impede reproductive functions. Its effects occur only at high doses not encountered by humans, and, despite extensive testing, there exists no scientific consensus on whether it can cause cancer in humans. In 1999, National Toxicology Program (NTP) leaders excluded MTBE from its recently revised list of human carcinogens, which has been published in the NTP Ninth Edition report on carcinogens. Panel members have concluded that while there is some evidence of MTBE carcinogenicity in test animals, the data are not strong enough to list MTBE as a human carcinogen. VI. ECONOMIC LOSS AND BURDEN According to a report by the U.S. Department of Energy, an MTBE ban in the United States would be equivalent to a loss of 300,000 barrels per day of premium blend stock and it would need to be compensated by crude processing capacity equivalent to five average U.S. refineries. An MTBE ban will invite a series of problems which are as follows: there will be an increased in gasoline production cost, increased reliance on gasoline imports, increased refinery investment, and increased pollutants emissions. VII. CALIFORNIA DELAYED MTBE BAN DEADLINE On Friday, March 15, 2002, California Governor Gray Davis postponed, by one year, the deadline to ban MTBE as a fuel additive across California. Through an executive order, he extended the MTBE ban from January 1, 2003, until January 1, 2004. This has provided refiners more time to Copyright © 2004 Marcel Dekker, Inc. overhaul their plants. The replacement of MTBE in California’s reformu- lated gasoline program is expected to require an additional 675 million gallons of ethanol per year. Since March 1999, when Governor Davis issued an Executive Order requiring the elimination of MTBE within two- and-a-half years, 10 new ethanol plants have opened and many older ones have expanded, increasing the nation’s ethanol capacity by more than 550 million gallons. Eighteen additional plants are under construction and slated to begin production before California’s deadline for phasing out MTBE. These plants will add yet another 470 million gallons of capacity. There are also scores of new plants in various stages of development. The ethanol industry is alarmed by persistent rumors suggesting the state may yet delay the implementation of the MTBE phase-out because of concerns about the potential impact of transitioning from MTBE to ethanol. Some refiners in California have not done anything to make the changes needed to adopt ethanol. The governor’s 1999 order to ban MTBE by the end of 2002 included a request to the Environmental Protect ion Agency to waive the oxygenate requirement. The EPA did not rule until the summer of 2001, and it ruled against waiving the oxygenate requirement. Many of the state’s refiners would not act until the EPA ruled on the oxygenate requirement. Now that refiners know the rules, they need sufficient time to get permits to retrofit their plants and logistics systems to comply with state guidelines. Permitting agencies in California are reluctant to issue permits for the required modifications. In addition, it takes only about half as much ethanol as MTBE to meet the oxygen requirement. This still leaves a void of approximately 50,000 bbl/day of gasoline. Most California refineries are already at maximum rates. Alkylate or isooctane will be needed to make up the difference, and it is not available and likely will not be in the near future. An extension of the ban is the only course that makes sense. It has been stated by Gray Davis that California’s gasoline specifications are hard to meet, and the state must be careful to avoid a gasoline shortage or backsliding on air quality. VIII. MTBE OUTLOOK FOR EUROPE When Europe started to phase down lead octane additives in petrol (gasoline) in the 1980s, many refiners replaced them with aromatics, which were the lowest-cost alternative at that time. Toward the end of the 1990s, new environmental regulations limited the aromatic content of gasoline. Refiners seeking alternative blending components came to rely more on fuel Copyright © 2004 Marcel Dekker, Inc. oxygenates—oxygen-rich, cost-effective compounds that act as octane enhancers, with the additional benefit of making gasoline burn more completely, thereby significantly reducing toxic exhaust emissions. MTBE is currently the most commonly used oxygenate in Europe. In Europe, the demand is approximately equal to the production capacity. Stricter gasoline quality requirements have increased the demand for high-octane blending components such as MTBE, and its con sumption is expected to remai n fairly stable in Europe over the next few years. Unlike the United States, there is no mandate on the use of MTBE in Europe. In Europe, gasoline is delivered under suction, with similar specifications for all EU states, whereas in the United States gasoline is delivered with pressure. In 1997, MTBE was included in the third Priority List of substances selected for risk assessment under the EU Existing Substances Regulation. Finland was chosen as the Member State responsible for progressing the risk assessment on MTBE on behalf of the European Commission’s working group. In November 2000, the EU Working Group on the Classification and Labeling of Dangerous Substances examined the status of MTBE in a meeting of the relevant Competent Authorities of the 15 Member States held in Italy. This meeting of experts resulted in the EU deciding that MTBE will not be classified as a carcinogen, mutagen, or reproductive toxin. The result of the EU risk assessment carried out in Finland was presented in Jan uary 2001. It concluded that MTBE was not a toxic threat to health, but can leave a bad taste in drinking water. As a result, in the draft directive for new fuel quality laws called Auto Oil II, published May 11, 2001, the EU set no limitations on the use of MTBE in fuel after 2005. Using a similar approach as the official EU Risk Assessment process, the European Centre for Eco-toxicology and Toxicology of Chemicals (ECETOC) recently concluded, ‘‘the risk characterization for MTBE does not indicate concern for human health with regard to current occupations and consumer exposures.’’ A ban on the use of MTBE is not expected in Europe, as widespread contamination on the same scale as in the United States is unlikely. The EU has, however, recommended that MTBE be prevented from seeping into groundwater through storage tanks at service stations. One example showing the EU’s initiative was the September 28, 2001, approval of a Danish tax initiative implemented to improve the quality of storage tanks. Denmark, one of the countries in Europe that is most concerned about the effects of MTBE on the environment, had proposed tax breaks of Euro 0.02 per liter of gasoline sold at service stations fitted with leak-resistant underground tanks. In Europe, there continues to be support for MTBE’s ability to reduce air pollution and a general belief that the real problem in the United States Copyright © 2004 Marcel Dekker, Inc. is leaking gasoline tanks. There is also surprise that the United States has taken so long to address the leaking tank problem. In response to European directives, countries such as Germany and Holland have some of the tightest environmental legislation in the world. The European Commission briefed the Strasbourg plenary session of the European Parliament that Europe is fundamentally different from the United States and for that reason MTBE was not considered a risk. Europe will phase down both its exports of straight MTBE and that of MTBE in RFG to the North American market, mainly as the product will be required locally but also as the United States presently looks to be moving away from an oxygen mandate. Eastern Europe is presently experiencing some solid growth and is demanding supply from West European producers. Nonetheless, MTBE producers expect that the results of the assessment mean that this chemical will not face a crisis of public confidence like that in the United States due to leakages from storage facilities. The report provides a balanced and objective overview of the risks associated with M TBE. The conclusions confirm that MTBE has a key role to play in permitting Europe to reach better air quality. The assessment was carried out after MTBE was placed on an EU priority list of chemicals for risk investigation. It was conducted by a group of environmental and safety institutes in Finland, where average MTBE content in gasoline of 8–10% is the highest in the EU. The European Commission is likely to draw up legislation for tighter storage standards following approval of the assessment by competent authorities in the EU member states. The Finnish assessors recommended measures such as the use of double-walled tanks, embankments around tanks, and leak detection equipment. Unlike the United States, the EU has had few problems with leakages of gasoline containing MTBE. Gasoline retailers have been willing to invest in secure storage and distribution facilities at service stat ions. The storage equipment is of a relatively high standard because gasoline is much more expensive in Europe than in the United States. In the wake of the risk assessment, MTBE is now poised to take full advantage of a predicted rising demand for oxygenates because of tighter EU regulations on fuel content. MTBE may face limited competition from ethyl tertiary-butyl ether (ETBE), the production of which could increase as a result of EU measures to stimulate the production of biofuels. Now that the health and environmental risks of MTBE have been properly assessed, there is a strong argument in favor of raising its average content in EU gasoline. Analysts projected that MTBE will continue to account for the vast majority of oxygenates consumed in the EU market. The higher demand for MTBE could even lead to a major increase in imports, because of sho rtages of capacity in Europe. Adding to Copyright © 2004 Marcel Dekker, Inc. [...]... from the difference between the octane value of a base gasoline with a known amount of MTBE and the base gasoline without MTBE The formula for BOV calculation is BOV ¼ ON À ONbase ð1 À xÞ ON À ONbase ¼ ONbase þ x x where ON ¼ RON or MON of MTBE blend with base gasoline ONbase ¼ RON or MON of base gasoline x ¼ volume fraction of MTBE in the blend The range of MTBE blending octane numbers is given below... phased lead out of their gasoline pool and are replacing it with oxygenates such as MTBE Due to the relative ease in blending of MTBE into gasoline, easy transportation and storage, as well as relatively cheap and abundant supply, MTBE is the most widely used oxygenate in Asia Demand for MTBE is expected to be marginally firmer in the near future, as more Asian countries such as Indonesia and India are... of the King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia Copyright © 2004 Marcel Dekker, Inc 2 Properties of MTBE and Other Oxygenates Mohammad Ashraf Ali and Halim Hamid Research Institute, King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia I INTRODUCTION Ethers and alcohols are being blended with gasoline to increase octane number and to reduce air pollution... have to allow time for MTBE to be flushed through the pipelines, because it is not a simple case of shutting off supply of MTBE and replacing it with another oxygenate overnight IX MTBE OUTLOOK FOR THE UNITED STATES Even with the controversy MTBE has been encountering in the United States, demand for MTBE continues at a high level The publicity machines continue to hammer away at MTBE California has finalized... from their gasoline pool Supply, on the other hand, is expected to remain abundant, as Asia is able to produce about 3 million metric tons per year of MTBE for its captive consumption In addition, Asia attracts a regular supply of about 500,000 metric tons per year of MTBE from Middle Eastern and European sources Differing from the rest of Asia, refiners in Japan have limited the use of MTBE for enhancing... value of its gasoline due to poor blending margins Refiners have drastically reduced MTBE plant operating rates Japan has no oxygenate mandate and requires a maximum of only 6% MTBE in its gasoline pool, so a number of Japanese refiners have reduced MTBE use Relatively high MTBE production costs brought about by high domestic methanol feedstock prices have prompted Japanese refiners to look to other. .. small cargos to local blenders as another factor for limiting MTBE use The economic situation in Indonesia, Thailand, and Korea is improving, and it is estimated that the demand for MTBE in this region will increase The demand forecast for 2000 was 1855 kilotons, rising to 2588 and 3450 kilotons in 2005 and 2010, respectively In other countries in Asia where leaded gasoline is being used, the efforts... road network, ensuring adequate supply of MTBE alternatives, and how much would gasoline cost in the end Copyright © 2004 Marcel Dekker, Inc XI ALTERNATIVES TO MTBE Most refiners use MTBE over other oxygenates primarily for its blending characteristics as well as for economic reasons The U.S EPA in 1999 recommended the amount of MTBE in gasoline be reduced because of the hazards this additive poses to... nature of the current MTBE situation in the United States makes it exceptionally difficult to predict the future course of events with any certainty According to a low -MTBE- demand case, California phases out MTBE by the end of 2003, the U.S East Coast reduces MTBE in reformulated gasoline from 95% to about 47% in 2005, and the East Coast eliminates the oxygenate by 2010 Under this low -MTBE- demand scenario,... that of gasoline, especially in the boiling range where gasoline typically shows lowest antiknock characteristics In this chapter, the properties of ethers and alcohol oxygenates are presented Copyright © 2004 Marcel Dekker, Inc II PROPERTIES OF MTBE Methyl tertiary-butyl ether is a colorless liquid of low viscosity with a distinct odor having a boiling point of 55 C and a density of 0.74 g/mL MTBE . adequately appreciate and quantify the air quality benefits of the use of MTBE and reformulated gasoline (RFG) in general. Much of the report’s air evaluation focuses on emissions of MTBE and its combustion. have already phased lead out of their gasoline pool and are replacing it with oxygenates such as MTBE. Due to the relative ease in blending of MTBE into gasoline, easy transportation and storage, as well. the support of the Research Institute of the King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia. Copyright © 2004 Marcel Dekker, Inc. 2 Properties of MTBE and Other Oxygenates Mohammad