The Royal Dutch Shell Group, one of the largest oil refiners in the US, will switch to ethanol as an additive to gasoline sold in California one year earlier than required by state law.
Shell will stop using methyl tertiary butyl ether, or MTBE, by the end of this year, and will start adding corn-based ethanol, the company said in a statement. Shell, which controls between ten and twelve percent of the $200 billion California gasoline market, joins the BP group in phasing out MTBE earlier than required.
In March, Governor Gray Davis postponed implementation of a ban on MTBE by a year to January 1st, 2004, on concern that a fuel shortage might cause a surge in pump prices. Ethanol and MTBE are added to gasoline to increase its oxygen content, which makes it burn more completely, reducing air pollution.
“We feel certain that the necessary supply of ethanol is available,” Shell Oil Products U.S. President Rob Routs said in the statement.