MORE ETHANOL NEWS
Refiners Raise Output of Gasoline Blends With Ethanol, API Says
2006-04-19 10:00 (New York)
By Mark Shenk
April 19 (Bloomberg) -- U.S. refineries increased production
of gasoline blended with ethanol as they prepare for a new
government mandate, the American Petroleum Institute said.
Refiners used ethanol in about 40 percent of the gasoline
produced the first week in April, up from 33 percent in the same
period last year, a monthly report from the industry-funded group
showed. Ethanol blends accounted for 67 percent of the cleaner-
burning reformulated gasoline produced during the week, up from
57 percent a year earlier.
``Last year already a third of the gasoline we produced had
ethanol because of the switch over in New York and California,''
said Ron Planting, an analyst with the Washington-based
institute, who wrote the report. ``This year the replacement of
the oxygen mandate with the renewable fuels mandate is driving
the increase in output.''
California and New York began using ethanol in gasoline in
2004 after banning a rival additive MTBE because it contaminated
groundwater. Corn-based ethanol and methyl tertiary butyl ether,
or MTBE, make fuel burn more completely. An energy policy bill
signed into law last year eliminates a requirement that oil
companies meet a 2 percent oxygenate requirement in gasoline.
The legislation also calls on refiners to use 7.5 billion
gallons of the replacement additive ethanol by 2012.
Surging pump prices are crimping fuel consumption, according
to the report. Deliveries of gasoline, a measure of demand,
averaged 8.9 million barrels a day last month, down 0.6 percent
from March 2005, the report showed. Demand so far this year is up
0.5 percent from the same period in 2005.
Managing Travel
``Consumers are deciding to manage their travel more
efficiently because of the increased cost,'' Planting said.
Implied demand of distillate fuel, a category that includes
heating oil and diesel, averaged 4.1 million barrels in March, a
5.8 percent decline from a year earlier.
High-sulfur distillate fuel averaged 1.2 million barrels a
day last month, down 8.3 percent from March 2005. High-sulfur
distillate is mostly used as heating oil. Diesel demand averaged
2.9 million barrels a day in March, down 4.8 percent from a year
earlier, the report showed. Diesel is low-sulfur distillate fuel.
The U.S. pumped 5.2 million barrels a day of oil during
March, down 6 percent from a year earlier, according to the
institute. All production platforms in the Gulf of Mexico were
shut as companies prepared for Hurricane Rita. The storm made
landfall on Sept. 24. In September the U.S. pumped 3.95 million
barrels a day, the lowest monthly production rate since 1943.
``We are still missing production in the Gulf,'' Planting
said. ``Improvement has stalled for two months.''
Alaska output of 771,000 barrels a day was down 20 percent
from March 2005. It was only the third time since North Slope
production ramped up in 1977 that production had dipped below
800,000 barrels a day.
