PEP Review 88-3-2
ETBE Versus MTBE
Published: January 1990
Several grain-derived ethanol producing plants may find it necessary to close down when Federal tax exemptions on gasohol are suspended in December 1992. One alternative to that ethanol use is ETBE (Ethyl Tertiary-Butyl Ether); however, its feasibility depends upon its economics relative to MTBE (Methyl Tertiary-Butyl Ether) as a gasoline octane improver. MTBE has been one of the most favored alternatives by refiners to maintain gasoline octane quality since the reduction of lead content in gasoline because of environmental concerns.
ETBE and MTBE are close relatives with similar characteristics. MTBE is derived from methanol and isobutylene contained in mixed C4 streams. ETBE is derived from ethanol and isobutylene from the same source. ETBE has a slightly higher octane quality and lower Reid Vapor Pressure (RVP).
The much higher cost of ethanol relative to methanol makes ETBE more costly than MTBE. SRI's cost estimates show that the price giving a 25% ROI on production facilities for 35 million gal/yr of MTBE is much lower than that for ETBE derived from agricultural ethanol.
ETBE would require a subsidy on its price in order to become an economically feasible alternative to MTBE as an octane improver.