Big discussion over at Slashdot. Editorial here.
One irony of the current gas panic is that big oil companies are being pilloried for their profits, but domestic ethanol producers get a pass. Yet the ethanol makers receive more government subsidies and are responsible for far more of the current gasoline price spike. Congress doesn’t have to bash ethanol makers; all it has to do is allow more foreign supply, which will do more to reduce gasoline prices more quickly than any other single idea.
As you probably know, oil companies were using MTBE for reformulated gasoline that reduced smog and complied with EPA regulations. It was discovered that MTBE from underground gasoline storage tanks was showing up in groundwater, and MTBE was pulled. Ethanol is now being used as a reformulant to comply with emissions rules, but domestic ethanol producers are having a hard time keeping up with demand during the transition, and that’s apparently one reason for higher gas prices.
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Les,
What is interesting to me is some of the history behind MTBE.
Its use goes back to at least the 70′s, when it was used as a lead substitute and octane enhancer during the transition from leaded to unleaded fuels, throughout most of the country. What is trully shocking is when MTBE content was studied and found to have positive effects on emissions, when used in higher quantities in the reformulated gas, there were various laws passed that MANDATED the use of it certain percentages. This was touted by the Green movement as ‘the thing’ to do, so laws were drafted and passed. Who was the President who signed all of this legislation, you guessed it, Bill Clinton.
After finding out about the groundwater problem, of course, it is all a ‘Big Oil’ conspiracy, or some other non-sense. I bet he still gets a free pass from the Left after all of this, because, ya know, he was doing it all for the children.
Yes Its the history behind MTBE that annoys me too
Firstly it was the EPA and the federal government who required that an oxygenate, either MTBE or ethanol be used.(1990)
In around 2000, MTBE was recognized to be a contaminant and was phased out. Together with that came the issue of filing MTBE LITIGATION against the oil companies.
Subsequently, the oil companies stopped adding MTBE to gasoline and instead went for ethanol.
MTBE removal from market has of course added to the rise in price. Coz ethanol is less efficient. It gives lesser energy output than MTBE. Its transportation cost is high and supply is low – so of course u can expect the price to go up.
And you are not to blame the oil industry. They are just following what the federal government asked to do. The law had that anyone who spills gasoline-with or without MTBE-had to pay for the clean up. Otherwise it would go for a MTBE LITIGATION . May be efforts should be put up to find a better substitute to MTBE.