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

costs). At a $70 per barrel crude oil price, the cost for production and distribution of
gasoline to the terminal ranges from $2.05 in the Gulf Coast to $2.43 per gallon in
California.
For further information on gasoline cost see section 7.4.5 in the RIA.
5. Overall Impact On Fuel Cost
We combined the costs and volume impacts described in the previous sections to
estimate an overall fuel cost impact due to the changes in gasoline occurring with the
projected fuel changes. This aggregated cost estimate includes the costs for producing
and distributing ethanol, the blending costs of ethanol in summertime RFG, ending the
production and distribution of MTBE, and reusing the MTBE feedstock isobutylene for
producing alkylate, reducing the content of butane in summertime RFG and wintertime
gasoline and for reducing the volume of refinery-produced gasoline. We also present the
costs for the scenario that butanes would not need to be removed when ethanol is blended
into wintertime gasoline. The costs for each control case are estimated by multiplying
the change in volume for each gasoline blendstock, relative to the reference case, times
its production, distribution and octane blending costs.
The costs of these fuels changes are expressed two different ways. First, we
express the cost of the program without the ethanol consumption subsidies in which the
costs are based on the total accumulated cost of each of the fuels changes. The second
way we express the cost is with the ethanol consumption subsidies included since the
subsidized portion of the renewable fuels costs will be not be represented to the consumer
in its fuels costs paid at the pump, but instead by being paid through the state and federal
tax revenues. For both cases we express the costs with and without butanes being
removed due to changes in wintertime blending of ethanol. We evaluated the fuel costs
using ranges in different assumptions to bound the many uncertainties in the cost analysis
(see the DRIA for more discussion concerning the cost uncertainties).
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