A major international economics consulting firm retained MathPro Inc. to assess the primary effects on U.S. gasoline production economics of (i) increasing the volume share of ethanol in the gasoline pool to 10% (National E10) and then 20% (National E20) and (ii) introducing significant volumes of a proposed new bio-fuel, bio-butanol, into the gasoline pool. The target years for the analysis were 2015 and 2030.

The analysis yielded numerous economic findings, including the following.

• Expanded ethanol use (National E10 and National E20) would induce numerous changes in refinery operations, capacity utilization, gasoline composition and properties, and product out-turns (not only gasoline but also distillate products). Refinery hydrogen production would be curtailed, leading to substantial increases in refinery purchases of hydrogen from merchant producers. With National E20, average fuel economy would be about 6% less than the baseline (current) value – which would call for an additional ~ 600 K Bbl/day of gasoline production or imports, nation-wide, in 2015 and ~ 700 K Bbl/day in 2030.
• Bio-butanol could be used as either (i) a refinery-blended gasoline extender or blendstock (analogous to alkylate or isomerate) or (ii) as a replacement for ethanol. As a gasoline extender, bio-butanol’s refining value would reflect the estimated marginal cost of increased gasoline production via refining operations – generally close to the spot price of CG. As an ethanol replacement, bio-butanol’s blending properties would endow it with a refining value close to the net delivered price of ethanol.