Automobile manufacturers have expressed concern that MMT use in gasoline can impair the performance of emission control devices in new model vehicles. Accordingly, American Honda retained MathPro to assess the refining economics of phasing out the use of the octane-enhancing additive MMT in Canadian gasoline.

The study assessed the refining economics of phasing out MMT from the Canadian gasoline pool under two alternative assumptions regarding the pace of a phase out: minimum time (no refining investment) and minimum cost (new refining investment allowed).

The analysis employed MathPro’s ARMS refinery modeling system to assess the economics of phasing out MMT from Canadian gasoline in Canada’s three main refining regions – Quebec, Ontario, and Alberta. ARMS contains an explicit representation of the octane-enhancing effects of MMT addition.

The first step in the refinery modeling was to establish Baseline cases representing Summer 2002 refining operations in each refining complex considered, with estimated MMT use consistent with reported values. Next, we developed Reference cases representing prospective refining operations under Canada’s Sulphur in Gasoline Regulation (30 ppm (average) gasoline sulfur content starting in January 2005), with continued use of MMT. Finally, we developed a corresponding set of MMT phase-out cases in which refineries cease using MMT, denoting minimum-time and minimum-cost routes to MMT phase-out.

Primary findings of the study included estimates of the refining costs of MTBE phase-out in each of the three refining centers considered, in both the minimum time and minimum cost scenarios; the refining investments required in each scenario, by refining center; and the estimated average cost of MTBE phase-out, expressed in terms of additional fuel costs over the lifetime of a typical vehicle.