July 2 Ethanol-blended Fuel Consistently Cheaper than MTBE Blends in California

By | July 01, 2003
The Renewable Fuels Association (RFA) issued a release highlighting the positive role ethanol plays in keeping down California gasoline prices as the state phases out the water-polluting gasoline additive MTBE. The RFA released California wholesale gasoline market information at a U.S. House Government Reform Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs field hearing on "California Gasoline Markets: From MTBE to Ethanol," held by Congressman Doug Ose in Diamond Bar, California.

"Ethanol-blended gasoline has been consistently less expensive than MTBE-blended gasoline in the California spot (wholesale) market - that's a fact," said Bob Dinneen, RFA president.

The California Energy Commission (CEC) studied price volatility in February and March and concluded: "This year's increase in gasoline and diesel prices is not unlike similar events that occurred in 1999 and 2001."

The CEC also found no evidence faulting ethanol blending, stating: "The early, voluntary phaseout of MTBE by most of California's petroleum industry and the transition to low volatility gasoline do not appear to have been primary causes of the recent high gasoline price divergence in California."

The reports can be obtained online at:
May EIA report summary: www.ethanolrfa.org/eia.cagasprice.pdf
April CEC report summary: www.ethanolrfa.org/cecgaspricereport.doc
June CEC report summary: www.ethanolrfa.org/cecjune.doc