In the 1990’s there were only four different kinds of motor fuels required in the U. S. Today, there are close to 30. In last two decades, various federal, state and local fuel requirements have required retailers to sell new formulations of gasoline that address different air quality concerns across the country. These formulations are known as “boutique” fuels, which have been adopted in State Implementation Plans (SIP). They typically address the air quality concerns in metropolitan areas. The following chart, courtesy of the EPA, describes these regions and fuel formulation requirements.
|Type of Fuel Control||PADD**||Region – State|
|RVP of 7.8 psi||1
|1 – ME1
3 – PA
5 – IN
5 – OH
6 – TX (May 1-Oct. 1)*
|RVP of 7.2 psi||2||5 – IL2|
|RVP of 7.0 psi||2
|7 – KS
5 – MI
7 – MO
6 – TX
|RVP of 7.0 with gasoline sulfur provisions||1||4 – GA|
|Low Emission Diesel||3||6 – TX|
|Cleaner Burning Gasoline (Summer)||5||9 – AZ (May 1 – Sept 30)|
|Cleaner Burning Gasoline (non-Summer)||5||9 – AZ (Oct 1- Apr 30)|
|Winter Gasoline (aromatics & sulfur)||5||9 – NV|
While these regulations were aimed at reducing air pollution, they have also had the effect of placing tremendous pressure on the nation’s refining and distribution system, and make it more likely that areas with unique fuel requirements could see supply shortages and temporary price spikes.
The Reid Vapor Pressure (RVP) relates to the volatility of a fuel and is an indicator of a cleaner burning fuel. Typically the lower the RVP, the cleaner the fuel. Refineries must adjust RVP seasonally for proper and efficient operation, especially in carbureted engines. During the winter season, higher levels of RVP are desirable for starting. Summer months require a lower RVP to avoid vapor lock. By requiring different mandated levels for different regions will effectively disrupt the refineries ability to produce fuel in mass quantity if it wants to meet the demands of a given ‘boutique’ market.
The Petroleum Administration for Defense Districts (PADD) was established during WWII to allocate fuel supply and demand. There are five PADD’s with sub PADD’s in busier areas of the northeast. Today, PADDs indicate the movement of crude oil for refineries and determine the supply for each region. By developing several boutique fuels a refinery must create will depend primarily on the location of the refinery to the region requiring the boutique fuels. For example, if Des Moines, Iowa would begin a boutique fuel requirement, likely the source would come from within PADD II. Most refineries in PADD II are located near the St. Louis Metropolitan region and unless the boutique fuel was identical to Missouri’s RVP requirement of 7.0, then it’s likely the fuel supply would be shortened.
In addition, many areas of the country require different fuels for summer months. This means that existing supplies of winter fuels must be completely exhausted, making it more likely that there will be temporary supply shortages. Basic economics tells us that supply shortages will increase the price of a product. Therefore, the bottom line is that boutique fuels negatively impact fuel prices to the consumer without much benefit to air quality over standard fuel formulas.