Consumers in Texas and along the East Coast could be facing higher
gasoline prices and supply disruptions this summer. That’s gas, not diesel.
An informal survey conducted by the U.S. Energy Information
Administration found that many refiners producing reformulated gas in those
areas are planning to switch to ethanol-based blends before the 2006 summer
The reason for the switch, according to the report, is that more states
are banning existing additives, such as MTBE, because of concerns about
potential water pollution.
The bans are indeed addressing those concerns, but have raised others,
including the possibility of gasoline supply disruptions and price spikes in
areas that use reformulated gasoline.
A report issued by the EIA on Wednesday, Feb. 22, said that refiners
along the East Coast and in Texas are already switching to ethanol blends at
such a rapid rate that the supplies of ethanol may not be able to keep up.
As such, gas stations in those areas could see supply disruptions and
price spikes until the market and supplies make their adjustments.
The report said that the East Coast and Texas will be hardest hit
because other areas that use reformulated gasoline – including California and
the Midwest – have already made the switch, so the other regions will be behind
them in line when it comes to supplies.
The report said that the supplies are likely to get tighter as the
summer driving season goes on and demand will not likely slow until the fall.