Memorial Day marks the start of summer – sending millions of drivers to their nearest gas station to fill up for that first summer trip. But have you ever stopped to wonder why gas prices seem to go up around Memorial Day and then fall again around September? Today’s edition of SBFF explores the relationship between a little known aspect of fuel regulation – Reid Vapor Pressure (RVP) – and its impacts on consumers, and the environment during the summer driving season.
Summer Gasoline Blends
In the United States, gasoline is a blend of various petroleum hydrocarbons as well as renewable fuels, such as ethanol. Gasoline has two major properties that fuel refiners control, octane and Reid Vapor Pressure (RVP). To learn more about octane, check out our recent Fact Sheet: A Brief History of History of Octane in Gasoline.
When blending fuels for different regions and regulations, refiners have a number of petroleum hydrocarbons to choose from, each providing different properties to the final blended fuel. While refiners keep the octane values constant throughout the year, the RVP rating changes according to the seasons, due to air quality standards set forward in the 1990 Clean Air Act Amendments.
There are three primary blend types used in the United States: summer blends, winter blends, and Reformulated Gasoline (RFG). Summer blend-fuels are so named because they are required by EPA during the hotter summer months to control the formation of smog.
Summer Blends Lower Smog Levels
When the air temperature reaches over 100 degrees Fahrenheit, gasoline vaporizes quickly, meaning it can boil in open containers and cause vapor lock in engines, a phenomenon whereby the fuel is unable to combust. While most modern engines are designed to control for vapor lock, these so-called evaporative emissions are a precursor to ozone.
Commonly referred to as smog, ozone is a complex mixture formed when air pollutants react with each other in the presence of sunlight. Ground-level ozone impairs lung functioning and contributes to increased incidences of asthma and other lung diseases, especially among children and the elderly. A hazy summer day, often referred to as a “bad air day” is the result of ozone formation. Over time, ozone exposure is linked to serious health impacts.
To reduce the formation of ozone in summer months, the EPA regulates the volatility of gasoline in the summer months. Refiners accomplish this by changing the fuel blend in anticipation of the warmer season. EPA requires retail gasoline stations to offer summer blends between June 1 and September 15.
Gasoline Blends Vary Nationwide
Reid Vapor Pressure (RVP) is a measure of gasoline volatility, or its ability to vaporize. Each component of gasoline adds to the overall RVP of a gasoline blend, and certain blending components have a higher RVP rating than others. To cut smog levels, EPA requires that summer blends have an RVP cap of no more than 9 pounds per square inch (psi). In some National Ambient Air Quality non-attainment areas, the cap is as low as 7.8 psi. Additionally, EPA allows states to require stricter standards (as low as 7.0 psi) in regions with poorer air quality. Refiners accomplish the various summertime RVP targets by using different proportions of the various gasoline components than they do in the wintertime.
Fig 1: U.S. Summer gasoline requirements, courtesy of EIA
Another fuel, Reformulated Gasoline (RFG), is required year-round in about a third of the country, due to even stricter ozone caps. Since RFG has a lower RVP rating than the required summer blends, RFG areas are not subject to the use of summer blends. Additionally, Alaska, Hawaii and U.S. territories do not have to comply with federal fuel volatility regulations. The net result is quite a few different gasoline blends, depending on the region and the time of year.
Summer Blends Are More Expensive
According to the National Association for Convenience & Fuel Retailing, gasoline prices in the summer months are on average, 52 cents higher per gallon. It’s a common misconception that the seasonal price hike of gasoline is due to increased demand. While demand does peak at about 10 percent more in August compared with January, demand is only one piece of the price increase.
The summer blend is more expensive for a number of reasons beyond demand: 1) use of more expensive blending components that comply with lower RVP ratings, 2) a more lengthy refining process to produce summer blends, and, 3) a resulting lower yield per-barrel which translates to higher priced fuels. The cheapest and most abundant gasoline blending component – butane – also has the highest RVP rating. Therefore, to comply with summertime RVP, refiners typically lower the amount of butane they use in finished gasoline. This both decreases available gasoline supplies as butane is reduced from gasoline, and increases blending costs – causing the price spike.
Ethanol’s Effect on RVP
|Figure 2: Ethanol’s effect on RVP, courtesy of NREL|
Currently, about 95 percent of U.S. gasoline is sold as E10 (10 percent ethanol, 90 percent gasoline). Adding 10 percent ethanol to gasoline raises gasoline’s RVP rating by one psi, to approximately 10 psi, according to the National Renewable Energy Lab. Because of this phenomenon, the EPA granted E10 a one psi waiver (commonly referred to as the one pound waiver) in 1992. Currently, higher blends of ethanol, such as E15, do not have a waiver.
While neat ethanol actually has a very low RVP rating (2 psi), the chemical interaction between small volumes of ethanol and gasoline causes RVP to increase. As the volume of ethanol in the fuel is increased beyond 10 percent, this effect is erased, and the RVP of the gasoline begins to drop. At higher blends, such as E30, RVP is just below 9 psi. Because the RVP of gasoline drops as ethanol content increases, blends higher than E50 have a lower RVP than that of the base gasoline, and no RVP waiver is required.
E15 and the RVP Cap
E15 (15 percent ethanol and 85 percent gasoline) has been approved for use in Model year 2001 and newer vehicles by the EPA -- over 80 percent of the cars on the road today. Vehicle manufacturers have also certified the use of E15 in two-thirds of the U.S. market for model year 2015 vehicles. Increasing the standard gasoline blend from E10 to E15 would also reduce harmful volatile organic compound (VOC) emissions, displace cancer causing emissions, and reduce smog forming potential, as well as cutting greenhouse gases by 1.5 percent. E15 is also typically two to 10 cents cheaper per gallon than E10.
There is no technical reason for regulating E15 and E20 differently than E10, as their RVP ratings during summer months are similar.5 While E10 can be sold year round, E15 is not permissible for use as a summer blend as it does not currently have a one pound waiver from the EPA.
Retailers Seeking Regulatory Relief
According to numerous ethanol trade groups, gas station owners who would like to sell E15 are between a rock and a hard place. While they can freely sell E15 during the winter months, come summer, they must label the fuels as “FlexFuel Vehicle Only,” due to the one pound waiver applying only to blends up to E10. This requires sign change outs and other administrative changes and, therefore, is viewed as an impediment to selling E15 by many retailers.
Members of both the House (H.R. 1736) and the Senate (S. 1239) have offered legislation that would extend the one pound waiver to blends above E10. Doing so would allow the sale of E15 to 2001 and newer vehicles during the summer months. S. 1239 has 16 cosponsors, and H.R. 1736 currently has 46 co-sponsors. Until the one pound waiver is extended to blends above E10, retailers continue to face roadblocks when they decide to increase the fuel choices at their stations.
For more information see:
A Primer on Gasoline Blending, Energy Policy Research Foundation
Gasoline Reid Vapor Pressure, U.S. EPA
Change in Air Quality Impacts Associated with the Use of E15 Blends Instead of E10, Life Cycle Associates