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Ethanol introduced to 87-octane unleaded gasoline

Ethanol introduced to 87-octane unleaded gasoline

Within two months, regular unleaded 87-octane gasoline won't exist in South Dakota. Federal rules mandate that it will be mixed with ethanol, and that is expected to bring the price per gallon down.

This week, the Nu-Star and Magellan pipelines, which supply the upper Midwest with fuel, will transition from 87-octane unleaded gasoline to 84-octane gasoline, which must be mixed with 10 percent ethanol to make it 87-octane oxygenated gasoline, said Dawna Leitzke, executive director of the South Dakota Petroleum and Propane Marketers Association.

Sometime between Friday and Oct. 31, people in South Dakota will no longer have the option to buy 87-octane gasoline that isn't mixed with 10 percent ethanol due to a federal law that was passed eight years ago, Leitzke said.

“Gas station owners in the state of South Dakota will be selling the product that is available to them,” Leitzke said. “Their choice will be limited by federal law, and the oil companies don't have a choice, either.”

In 2005, the federal government passed a law, called the Renewable Fuels Standard, which requires all fuel to reach a certain threshold of renewable fuels in it. For gasoline, that renewable fuel is ethanol, Leitzke said.

Each year, the amount of renewable fuel required has gone up, with a large increase happening now.

Ernie Kusler, owner of the Kusler's Sinclair gas station, said he doesn't know when his station will stop selling regular 87-octane. He said his supplier, Harms Oil, also doesn't know when the switch is coming.

When the new fuel comes, he will have to recalibrate the blender pumps, Kusler said.

The most commonly sold fuel at his station is 89-octane, which contains 10 percent ethanol, because it's the cheapest fuel available, Kusler said.

By the end of October, once regular unleaded 87-octane is gone, 89-octane won't be the cheapest fuel available for a couple of reasons, said Troy Weig, petroleum manager for the North Central Farmers Elevator in Ipswich.

Currently, the 89-octane fuel is cheaper because of the ethanol subsidy in South Dakota, Weig, who also manages a Cenex station, said.

Weig said he is confident that the new 87-octane gas will be cheaper than 89-octane after the switch happens, but he does not know what the price differential will be. He was also unsure if the price of gasoline will rise overall once the transition is complete.

By November, the only gasoline available in the state that won't be mixed with at least 10 percent ethanol will be 91-octane premium unleaded, Leitzke said.

The people most affected by the change are people driving old cars or classic cars, whose only option will be the more expensive 91-octane premium unleaded because those engines were not built to run on ethanol-treated gasoline, according to Kusler.

Leitzke said oil and gasoline companies that do not adhere to the Renewable Fuels Standard would pay several million dollars in fines.

South Dakota is one of the last states in the country to still offer regular 87-octane, Leitzke said. More than half of the U.S. has already made the switch, she said.

“It's gonna happen, and there's nothing anybody can do to stop it,” Kusler said.

Source:
http://www.aberdeennews.com/news/aan-ethanol-introduced-to-87octane-unleaded-gasoline-20130916,0,6652138.story

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