With the US likely to raise the gasoline octane standard in the next decade or so to achieve greenhouse-gas emissions regulations and fuel efficiency targets, the domestic ethanol industry is promoting its product as the most cost-effective and environmentally friendly way to meet those higher requirements.
In fact, that was the main thrust of the Renewable Fuels Association’s National Ethanol Conference in New Orleans last week.
While the conference in recent years has focused primarily on the regulatory uncertainty surrounding the US biofuels blending mandate, this year’s stressed the need to look beyond that statute for growth.
And one way the RFA aims to do that is to highlight ethanol’s octane benefits, given its price and environmental advantages to petroleum-based additives, such as alkylate and reformate.
“The world is octane short, and with a blending octane rating of 113, ethanol offers more engine knock resistance per dollar than any other gasoline additive on the planet,” RFA President Bob Dinneen said in his state of the industry address.
The current standard for most of the US is 87 octane for regular gasoline. The higher the octane, the lower the engine “knock,” or misfiring of the gasoline within the engine, improving efficiency and lowering emissions.
In tandem with raising the octane of gasoline, automakers could redesign their engines to improve their compression ratio to further enhance efficiency.
But significant challenges remain to simply blending more ethanol into the US gasoline pool to raise its octane.
For one, vehicle engines would have to be redesigned to tolerate the more corrosive higher ethanol blends.
While many automakers have begun to warranty their vehicles for E15 — a 15% blend of ethanol with gasoline — experts say blends of E25 or E30 would likely be necessary to meet the higher octane standard.
Ethanol also has a higher Reid Vapor Pressure than some other blendstocks, which makes it more challenging to meet the Environmental Protection Agency’s summer gasoline specifications.
On the other hand, using reformate or alkylate to boost octane would require refineries to invest significantly in their capacity to produce those blendstocks, which are significantly more expensive than gasoline.
Valero, Marathon Petroleum and other US refiners have already announced plans to increase alkylation production to take advantage of strong demand and sizable margins.
Platts has assessed alkylate FOB Houston as high as 38 cents/gal above Gulf Coast conventional pipeline gasoline in recent days, while reformate FOB Houston has been assessed as high as 65 cents above Gulf Coast gasoline.
Chicago Argo ethanol, meanwhile, has traded about 43 cents/gal above CBOB gasoline recently. But the Argo-CBOB spread has been volatile, with ethanol spending most of 2015 at a discount to gasoline.
Tom Leone, a technical expert on powertrain evaluation and analysis with Ford Motor Company, said so far there has been a lack of consensus among automakers, refiners, fuel distributors and government and standards organizations on which pathway to follow.
Bumps in the ethanol road
“The transition will be difficult,” he said. “To get the biggest benefits, the engines need to be optimized to take advantage of the high octane fuel. Whether it’s higher ethanol blends or increasing octane at the refiner level in E10, there are challenges to both approaches. There are investments required on both sides. It’s not an obvious choice for us.”
Count John Eichenberger, executive director of the Fuels Institute, as a skeptic that higher ethanol blends can be the solution to raising octane.
“30% ethanol will be a problem,” he said. “If [the new fuel] is restricted to new vehicles, there’s not going to be sufficient demand for retailers to put it in. The question is, what is that threshold?”
Whatever the solution to the higher octane problem, it will almost certainly be a lengthy transition process. The switchover from leaded to unleaded gasoline took 12 years before leaded gasoline was fully phased out in the US.
The RFA is hoping to get an early edge on the process.
Dinneen noted that Europe has a standard of 95 research octane number, or RON, which is a different calculation than the US uses but is nonetheless higher than the US’ standard.
He said the RFA would push US regulators to adopt that European standard. Once the new regulation is adopted, ethanol would have to compete in the marketplace.
“A higher octane fuel would enable the auto industry to increase engine compression to improve fuel economy and performance,” Dinneen said. “In a competitive octane environment, everybody wins.”
–Herman Wang in Washington