When the octane boosting gasoline additive tetra ethyl lead was phased out in the industrial countries starting from the 1970s onwards, the refining industry started the search for high-octane components suitable to blend with gasoline such as alcohols and ethers in addition to increasing the capacity of reforming, catalytic cracking and other gasoline related processes.
The chemical liquid methyl tertiary butyl ether (MTBE) emerged as a golden product that will satisfy many requirements of gasoline especially by increasing its octane and improving its combustion characteristic and reduce its environmental impact, in addition to the increased volume generated by the blend.
MTBE, the organic compound with oxygen in it immediately acquired wide use in the US starting in 1992 in the wake of the Clean Air Act and its amendments such that its consumption reached almost 300,000 barrels a day (bd) in 2001. The product quickly spread to Europe and to a lesser extent to Asian markets.
However, after just under 10 years of glory in the US, the product came under pressure on account that its leakage contaminated drinking water resources and after intense debate the product was banned and phased out between 2004 and 2008. The decision remains controversial to this day.
Luckily, the rest of the world did not follow the US and Arab producers in Saudi Arabia, Qatar and the UAE, who built large capacity to export mainly to the US soon got over their worries of idle capacity and lost investment by finding markets in other parts of the world.
Arab countries in the Gulf have a total MTBE production capacity of almost 100,000 bd where 67.5 in Saudi Arabia, 12.75 in Qatar, 12.5 in the UAE and 6 thousand bd in Kuwait. They sure suffered after 2004 when their exports to the US ceased and the US itself started exporting the product to emerging markets to the tune of 40 to 60,000 barrels a day between 2006 and now.
European MTBE production capacity of about 60,000 bd is sufficient for its gasoline requirements especially that it produces other ethers equally good for gasoline blending and its refining process are mature and complex.
The saviour of the MTBE industry in the Arab countries came from Asia and local consumption in the producing countries. In 1992, Asian production was 1.6 million tons of MTBE and the Middle East has not yet started. In 2011, Asian production reached 11.9 million tons where the Middle East production was 3.8 million tons (essentially Arab with little from Iran).
China’s consumption in 2000 was about 2.2 million tons while it increased sharply such that its production capacity of 6.8 million tons in 2010 is not sufficient for its gasoline requirement and China imported 540,000 tons in 2011. Other Asian countries such as Taiwan, Singapore and South Korea who have a combined production capacity of 1.75 million tons a year still imported 800,000 tons in 2009. Malaysia has a production capacity of 350,000 tons a year but still import additional quantities and other countries are no exception. Future capacity increases are expected in Asia especially in China and so is gasoline consumption. Demand for clean fuels in Asia is increasing sharply driven by the government and public drive to improve air quality in the major population centres considered to be the most polluted in the world.
In the Middle East, the main driving force to use MTBE is to make for lost gasoline octane in the process of lead phase out. But environmental reasons are not far behind especially in the congested cities and the increased number of vehicles. The application is easy in the MTBE-producing countries where delivery to refineries and blending can be accommodated.
Other Arab countries need infrastructure to receive the product and distribute it to the various blending centres. MTBE producers will do well if they adopt and finance such programmes for future sales. Potentially all the Gulf MTBE production can be used in the Arab countries and more than half of it in the MTBE producing countries themselves.
Therefore, with the available export markets in Asia and locally the whole available capacity in the Gulf need to be viewed in the light of the expected development in the future. The development in the US may have stopped the expansion of the MTBE industry in the Arab countries but it is time for the industry to take a fresh look and approach the future with confidence. Especially in countries where catalytic cracking units or steam crackers are installed, MTBE production coupled with these units is the least expensive to install and the most practical to employ.
— The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.