Gasoline blends stress supplies, environmental benefits vary: GAO

Washington (Platts)--5Jul2005

Special gasoline blends in the US reduce vehicle emissions by varying degrees,
but also strain gasoline supply systems, affecting operations at refineries,
pipelines and storage terminals, according to a report released Tuesday by the
US Government Accountability Office. The proliferation of special blends
"reduces efficiency and raises costs," the GAO report said. 

Producing these blends can require additional investments for refiners, such
as installing new processing equipment and the use of larger amounts of
valuable components in the blending process, GAO said. Once produced,
different blends must be kept separate throughout the shipping and delivery
process, and the increased number of blends has reduced the capacity of
pipelines and storage terminal facilities, originally designed to handle fewer
products, the report said. 

The proliferation of special blends has also limited the number of suppliers
for some of these fuels, posing challenges when traditional supplies are
disrupted, such as during a refinery outage or pipeline delay.

"In the past, local supply disruptions could be addressed by bringing fuel
from nearby locations; now, because the use of these fuels is isolated,
additional supplies may be hundreds of miles away," the report said. However,
the GAO makes no recommendations in its report about whether the number of
special gasoline blends should be limited. Instead, it recommends that the
Environmental Protection Agency study how the special blends affect emissions
and that it work with states, along with other agencies, about how to balance
the environmental benefits of special gasolines with the impact on the supply
infrastructure and prices. 

The environmental benefits of the special blends vary across the US, the
report said. California blends reduce emissions the most -- volatile organic
compounds by 25%-29% and nitrogen oxides by 6% compared to convention
gasoline, while also reducing emissions of toxic chemicals. The most common
special gasoline blends, used largely in the Gulf Coast region, reduce VOCs by
12%-16% and NOX by less than 1%.

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