The Importance of Oxygenates in Gasoline: A Look at the History and Regulation - Part 2

The use of oxygenates in gasoline has been a contentious issue for decades. One oxygenate commonly used in the United States gasoline was methyl tert-butyl ether (MTBE). However, due to concerns about its impact on the environment and human health, its use has been substantially phased out since the early 2000s.

Click here for Part 1 of The Importance of Oxygenates in Gasoline.

Why MTBE was used

MTBE was widely adopted as an oxygenate in gasoline because it helped reduce emissions of harmful pollutants such as carbon monoxide and volatile organic compounds (VOCs). Increasing the amount of molecular oxygen available during combustion allows fuel to burn more completely, which generally results in lower levels of certain regulated exhaust emissions. From a purely emissions-control standpoint, MTBE initially looked like a success story.

Drinking water contamination concerns

However, serious concerns about MTBE’s impact on drinking water supplies began to surface in the 1990s. These concerns would ultimately overshadow its air-quality benefits and reshape the oxygenates landscape in the United States.

One of the major problems with MTBE is its high solubility in water. When gasoline leaked from underground storage tanks, pipelines, or fueling infrastructure, MTBE readily migrated into groundwater. Once present, it proved difficult and expensive to remove. Even extremely small concentrations were enough to make water supplies unusable because of strong taste and odor issues. In many communities, entire municipal water systems were affected.

Beyond taste and odor problems, health concerns also began to emerge. MTBE was classified as a possible human carcinogen, and studies raised questions about other potential adverse health effects. While research was ongoing, the combination of widespread contamination, remediation challenges, and public health uncertainty created strong pressure for regulatory action.

State bans and the MTBE phase-out

By the late 1990s, the issue reached a tipping point. California became the first state to ban MTBE in gasoline in 1999 after discovering contamination in multiple drinking water sources. New York and Connecticut followed with their own bans in 2003. Other states soon took similar action, either banning MTBE outright or severely restricting its use. In a relatively short period of time, MTBE went from being the dominant oxygenate in the U.S. fuel supply to being effectively pushed out of most domestic markets.

Ethanol replaces MTBE

As MTBE was phased out, refiners needed an alternative that could meet oxygen requirements while avoiding the same environmental risks. Ethanol quickly became the primary replacement.

Ethanol is a renewable alcohol fuel produced from agricultural feedstocks such as corn, sugarcane, and other biomass sources. In the United States, corn is the dominant feedstock. In other parts of the world — particularly Brazil — ethanol production relies heavily on sugarcane and, in some cases, switchgrass and other energy crops. Each production pathway comes with its own efficiency, carbon footprint, and infrastructure considerations.

From a regulatory and public perception standpoint, ethanol offered several advantages. Like MTBE, it improves combustion efficiency and reduces certain exhaust emissions. Unlike MTBE, ethanol is biodegradable and does not persist in groundwater in the same way if spills occur. It is also widely viewed as safer for human health. Additionally, domestic ethanol production reduces reliance on imported petroleum and supports agricultural markets, which has made it politically attractive as well.

Ethanol use, however, has never been free of controversy. Critics argue that ethanol’s overall environmental benefits are often overstated when full life-cycle emissions are considered, including fertilizer use, land conversion, and energy inputs required for production. Others point to the impact on food markets, noting that a significant portion of the U.S. corn crop is diverted into fuel production instead of food and livestock feed. There are also technical challenges associated with ethanol blending, including water absorption, phase separation, material compatibility, and distribution limitations.

Despite these concerns, ethanol has become firmly established as the primary oxygenate in U.S. gasoline. Federal policy played a major role in accelerating this transition. The Energy Policy Act of 2005 introduced mandates requiring increasing volumes of renewable fuels to be blended into transportation fuels. The Renewable Fuel Standard (RFS), expanded in 2007, further institutionalized these blending requirements and set long-term volume targets for ethanol and other biofuels.

The shift from MTBE to ethanol had major implications for refiners and fuel distributors. Infrastructure had to be modified or rebuilt. New blending terminals were constructed. Fuel logistics changed, since ethanol cannot be shipped through traditional petroleum pipelines and must instead be blended closer to the point of sale. These operational changes added cost and complexity to the fuel supply chain, but they became necessary to comply with evolving regulatory requirements.

What happens next

Biofuels like ethanol are not going to go away. They'll be a core part of our national energy and emissions policy for the foreseeable future. The challenge moving forward will be finding solutions that balance air quality improvement, infrastructure compatibility, environmental sustainability, economic efficiency, and fuel system reliability. That balancing act is far from over.

Learn more about fuel, fuel storage, and fuel maintenance with our Fuel Pulse Podcast Episode 024 - Oxygenates (Part 2) or you may use the player below.