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| Ethanol Conversions Blamed For Gasoline Disruptions |
363 Views |
| posted on Monday, April 24, 2006 |
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BODMAN BLAMES ETHANOL CONVERSIONS FOR GASOLINE DISRUPTIONS
By Freddie Mooche
AXcess News
April 23, 2006
Original Link
WASHINGTON - U.S. Energy Secretary Samuel Bodman told reporters in Washington that the conversion to ethanol at refineries is the reason for gasoline production setbacks that causing fuel prices at the pump to climb to record highs.
Some gas stations on the east coast are seeing fuel shortages thanks to limited supplies from refiners who are still in the process of switching to ethanol while on the west coast, most transfers to ethanol have been completed. In Philadelphia, six filing stations in the area were out of gasoline because of the switch to ethanol, AAA reported.
According to AAA, the national average price for a gallon of regular unleaded gasoline is $2.90, up 2 cents from yesterday and 40 cents a month ago.
Hawaii is the No. 1 state for the highest prices paid at the pump at $3.22 per gallon of unleaded regular gasoline on Sunday. The second highest price paid at the pump is in California, where the average price for unleaded regular gasoline is $3.10 per gallon, according to AAA, with New York coming in a close third at $3.05 per gallon.
The lowest price paid for unleaded gasoline is in Wyoming, where consumers were paying $2.52 per gallon of unleaded gas on average with Montana the second-lowest at $2.57 per gallon.
Here in the nation's capitol, the average price for a gallon of unleaded gasoline is $3.04.
Refiners are in the middle of replacing the additive MTBE in gasoline by May because of changes in fuel requirements in the energy bill that President Bush signed into law in August.
Bodman said that it will take months to complete before consumers will not have to worry about supplies falling short as refineries catch up on production levels.
The Energy Secretary said that logistics in shipping ethanol to the refineries is also playing into the picture.
"I do believe over a period of time -- that is, a matter of months -- it will level out," said Bodman.
Friday, crude oil for June delivery closed up $1.52 to $75.21 a barrel on the New York Mercantile Exchange. It was the fourth straight day in a row that crude oil rose to record-setting levels. Unleaded gasoline for June deliver closed down only slightly at $2.21 a gallon.
Bodman's comments on logistics rang true in Dallas this month as tanker trucks normally used to haul gasoline to stations had to be diverted to haul ethanol to refineries, which caused shortages of fuel at 60 gas stations there.
The average US pump price for regular gasoline has risen 14 percent this month because of short supplies.
Most refineries will have phased out the gasoline additive MTBE, or methyl tertiary butyl ether, by May and replaced it with ethanol in reformulated gasoline.
The US Department of Energy predicted tight supplies and volatile prices in the East Coast and Texas because of the switch to ethanol.
The energy industry blames Bush's legislation for the problems, saying that the move away from MTBE came during the switch to summer grades of gasoline, which was poorly timed.
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