Does the U.S. face dependence on foreign ethanol?
The reason? Too much demand, and not enough supply, a conondrum that leads to shortages and high prices.
Oil companies that still use MTBE (Methyl Tertiary Butyl Ether to you chemists) to oxygenate gasoline are rapidly shifting to using ethanol instead, to avoid the public health hazard created by the additive (and the attendant lawsuits). While much of the U.S. already uses E10 blended gasoline, the East Coast and Texas region still depend on MTBE-blended fuel.
Unfortunately, U.S. ethanol production is running at capacity, and there isn't enough U.S. ethanol to replace all that MTBE. U.S. capacity will increase as new facilities eventually come on line, but that isn't solving this year's problem.
Already, ethanol prices have been driven high enough that E85 is selling for as much or more than gasoline, even though its energy content is lower (leading to comparatively lower fuel efficiency). Things will get worse before they get better, with CNN/Money reporting that the ethanol shortage will affect regions depending on it to replace MTBE... leading to high prices and possible fuel shortages on the East Coast and in Texas.
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