EIA Reports Sales of High Octane Gas Increasing

Source: By Jessie Stolark, EESI • Posted: Sunday, April 10, 2016

On April 6, the Energy Information Administration (EIA) reported that premium gasoline sales have risen from a low in 2008 of 7.8 percent to a recent high of 11.8 percent of fuel sales in September 2015. Historically, premium gasoline has been required only by luxury vehicles, and therefore has made up a small percentage of the overall gasoline market. However, higher grades of gasoline have higher octane volumes, which allow for the use of smaller, more powerful engines. According to EIA, increasing sales of newer, more efficient vehicles that require or recommend high octane fuel is driving the increased demand for higher octane gasoline.  This has implications for consumers in two main ways: increased use of premium gasoline means increased exposure to aromatics; and it also means increased costs as premium gasoline can run up to 50 cents higher per gallon than regular gasoline.

Increasing Number of Light Duty Vehicles ‘Require’ or ‘Recommend’ High Octane Fuel

These new vehicles aren’t luxury vehicles, but rather more efficient versions of the light duty vehicles that make up most of the passenger fleet. As automotive manufacturers work toward meeting higher miles per gallon (mpg) ratings under the Corporate Average Fuel Economy (CAFE) standards, they are using a combination of vehicle technologies to increase fuel efficiency, including weight reduction, engine efficiency improvements, aerodynamic improvements, renewable fuels, electric vehicles and hybrids.

Smaller, turbocharged engines improve fuel efficiency without sacrificing engine power.  These turbocharged engines also increase the tendency of the engine to exhibit engine knock.  Knock can be damaging to engines, but is virtually unknown to modern drivers, thanks to octane.  Octane prevents premature ignition of the fuel and is a component that is added to gasoline.  These turbocharged engines will therefore need higher volumes of octane for optimized performance.

According to EIA, the share of the light duty fleet that requires or recommends the use of high octane fuel is increasing.  In 2010, the percentage of new vehicles optimized for high octane fuels was 12.5 percent, in 2013 that number had increased to 14.2 percent of new vehicles on the road.  EIA estimates that the share of turbocharged vehicles will dominate the passenger fleet by 2025, making up 83.3 percent of the light duty fleet.

Octane Sources

Octane sources have taken many forms throughout the years, both renewable and petroleum-based. They include lead, methyl tertiary butyl ether (MTBE), benzene, toluene, ethyl-benzene and xylene (BTEX), and ethanol (a biofuel). As adverse health and environmental consequences have been discovered for lead and petroleum-based octane providers, they have been removed from the fuel supply or decreased. Today, there are two primary sources of octane used in the U.S. gasoline supply, the BTEX complex (a petroleum refining product commonly referred to as gasoline aromatics), and ethanol.

For a history of octane providers, check out EESI’s latest Fact Sheet, A Brief History Of Octane in Gasoline: From Lead to Ethanol.

Can Octane Help Autos Meet CAFE?

Under CAFE, the automotive industry is charged with meeting a goal of 54.5 mpg by 2025, which will result in an estimated savings of $1.7 trillion in gasoline costs to U.S. consumers, as well as reducing GHG emissions by 6 billion tons over the lifetime of these vehicles.  Yet, as gasoline prices have plummeted, auto manufacturers have stated that they may be unable to meet CAFE without additional federal assistance.

Sales of larger trucks and SUVs have soared in the past year, and gasoline consumption has increased slightly. Meanwhile, some argue that auto manufacturers have relentlessly marketed trucks and SUVs to the public, while simultaneously relying heavily on federal credits to meet CAFE targets.

As the United States looks to reduce the greenhouse gas intensity of the transportation sector, increasing the octane value of gasoline is a promising avenue, as it would enable more fuel-efficient engines. Automotive manufacturers have expressed interest in raising the minimum octane pool in the United States to enable smaller, more efficient engines. Doing so would increase vehicle efficiency and lower greenhouse gases through decreased petroleum consumption.

Ethanol producers have also backed this proposition – since ethanol is an excellent source of octane and has a lower GHG footprint when compared to gasoline. A national transition to a mid-level ethanol blend, between E20 and E40, would provider higher octane, lower consumer fuel costs and standardize the fuel supply. The Department of Energy recognizes that increasing the ethanol content of gasoline is a potential pathway to increasing the octane rating of the gasoline supply.

A mid-level blend would enable the design of highly fuel-efficient engines that would significantly reduce petroleum consumption, reduce lifecycle greenhouse gas emissions, and help meet higher fuel economy standards. As of now, the Department of Energy and the EPA have approved the use of E15 for make and model year 2001 and newer vehicles, which account for 80 percent of the vehicles on the road today.

The federal government is currently conducting a mid-term review of CAFE; the results are expected this summer.

For more information see:

Engine design trends lead to increased demand for higher-octane gasoline, EIA

Fact Sheet: Vehicle Efficiency and Emissions Standards, EESI