U.S. ethanol production benefits from a switch from MTBE

Ethanol production increased by about 10% in 2001, to 1.77 billion as refiners began substituting ethanol for methyl tert-butyl ether (MTBE). Ethanol capacity in the US has grown 10%/year during the past five years, to 2.24 billion gals. Gasoline marketers switching to ethanol ahead of the proposed MTBE phaseout drove down MTBE demand and production. The market is oversupplied and spot prices are essentially flat at $1.00-$1.50/gal.