Regulation of Fuels and Fuel Additives: Renewable Fuel Standard ...

1. RVP Cost For Blending Ethanol Into Summertime RFG
Blending ethanol into summertime RFG causes about a 1 PSI (pounds per square
inch) increase in RVP. To enable this gasoline to continue to be sold into the
summertime RFG market, this vapor pressure increase must be accounted for by
adjusting the RVP of the base gasoline. The vapor pressure adjustment is made by
reducing of volume of pentanes in the gasoline boiling that comes from the fluid catalytic
cracking unit (FCCU). To reduce the pentane content FCC naphtha, refiners would likely
have to add a distillation column called a depentanizer, where pentanes and lighter
hydrocarbons are removed from the hydrocarbon feed and drawn off the top of the
column while the heavier C6+ hydrocarbon are removed from the bottom. While the
pentanes would be removed from the summertime RFG pool, they are expected to be
reblended into either summertime CG or wintertime CG and RFG. To rebalance the RVP
of the nonsummertime RFG pool or wintertime RFG or CG pool caused by relocated
pentanes, butanes are estimated to be removed from the gasoline pool. When ethanol is
blended into summertime RFG, about 10 percent of the base gasoline is lost due to the
removed pentanes. We believe that refiners would reblend these removed pentanes into
summertime CG or wintertime CG and RFG and rebalance the RVP of the gasoline pool
into which the pentanes are being reblended by removing butanes, thus reducing the
volume loss to one fifth of that if the pentanes were permanently removed. There is an
opportunity cost to removing butanes from gasoline. In 2004 butanes sold into the butane
market were valued 36 cents per gallon less than gasoline, however, this opportunity cost
would be much greater if pentanes were permanently removed from gasoline.
We developed cost estimates for adding and operating a new depentanizer
distillation column for the removal of pentanes from FCC naphtha in each refinery. The
feed rate for an average FCC unit was estimated by PADD and ranged from 7 to 35
thousand barrels per day. Once the capital and operating costs were estimated, the total
costs were averaged over the entire gasoline pool, which ranged from about two to three
times the volume of FCC naphtha. When ethanol is being blended newly into
summertime RFG, the capital and operating costs will both apply. However, when we
model ethanol coming out of a summertime RFG market, we only reduce the
depentanizer operating costs since the capital costs are sunk.
Our analysis showed that the RVP blending costs for blending ethanol into
summertime RFG ranges from 1 to 1.4 cents per gallon of RFG. If the ethanol is coming
out of summertime RFG, which occurs in some of the scenarios that we modeled, there
would be a cost savings of 0.8 to 1.2 cents per gallon of RFG.
In the cost of refinery gasoline section below, we took into account that butanes
have a lower energy density compared to the gasoline pool from which the butanes were
removed. This energy content adjustment will offset some of the cost for removing the
butanes. Butane’s energy density is 94,000 BTUs per gallon compared to 115,000 BTU
per gallon for gasoline.
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