Ethanol-gasoline is a kind of new alternative renewable energy, which is made from grain and various kinds of plant fibers and mixed with ethanol and ordinary gasoline in a certain proportion. On May 30, 2019, EPA finalized regulatory changes to allow gasoline blended with up to 15 percent ethanol (E15) to take advantage of the 1-psi Reid Vapor Pressure (RVP) waiver that currently applies to E10 during the summer months. The release of this new rule is bound to bring about various impacts on the environment, cost of gasoline, refining industry, and energy security.
For the environment, EPA promote the use of ethanol as a substitute for some part of petroleum to reduce gasoline consumption and increase the proportion of non-fossil energy. Studies have shown that ethanol-blended gasoline compared with conventional gasoline, its CO2 and NOx concentrations were increased while the concentrations of CO and HC were decreased. At the same time, this measure reduces the use of non-renewable energy, which in some ways also reduces the environmental pollution caused by the exploitation of fossil energy.
The influence of ethanol-gasoline on gasoline cost depends on the change of oil price and fuel ethanol price. When the oil price is high, the gasoline mixed with fuel ethanol can offset part of the gasoline cost, which is conducive to the promotion of ethanol gasoline. In a scenario of oil prices is low, higher food prices will increase the cost of producing ethanol. Therefore, developing various way to produce ethanol from others source, such as straw and cellulose, is the key to stabilize the price of ethanol-gasoline. If the price of ethanol-gasoline is the same as regular gasoline, the profit reduction of fuel ethanol producers will lead to the decline of enterprise willingness of production. It will bring considerable resistance to the promotion of new rules about E15.
For the refining industry, ethanol, which was added to the ethanol-gasoline, is used as a succedaneum of organic compound additive containing oxygen. This means that methyl tert-butyl ether (MTBE), the most popular ether to be used as an oxygenate additive in gasoline, and Ethyl tert-butyl ether (ETBE) will be replaced. MTBE is a very good gasoline additive, which can bring good economic benefit to the refinery. However, with some states banned MTBE as a gasoline additive, because of its toxicity and pollution, it may promote refiners to substitute ethanol for MTBE. MTBE/ETBE's reduction in production means it needs to find a new way to produce its raw material, isobutylene, otherwise, it will bring huge difficulties to the product structure adjustment of the whole oil refining industry.
Energy diversification is a good strategy for energy security, and the popularization of ethanol-gasoline have great significance. Fuel ethanol is a kind of renewable energy with abundant production resources and mature technology. Compared to the relative concentration of petroleum in the world, raw materials for ethanol production are not geographically restricted. Promoting the use of ethanol gasoline can reduce the country's dependence, especially for these countries heavily dependent on imports of crude oil, on external oil and weaken the impact of external factors on national energy security.
Overall, the trend of promoting ethanol gasoline is difficult to change. Although the rule of E15 in some way may reduce the sales of gasoline, which will have a certain negative impact on the oil industry, this is also an opportunity for the traditional oil industry to transform. Oil industry should study the possibility of cooperation with grain enterprises as soon as possible to form an industrial chain of ethanol and gasoline production. In order to further improve the industrial chain, petroleum enterprises can study the feasibility of investing in advanced bio-liquid fuel technologies such as cellulosic fuel ethanol. At the same time, the oil industry can use the limited high-octane component resources for chemical and chemical fiber products with better benefits, to increase the added value of oil products.
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