Economic and Environmental Benefits of Higher-Octane Gasoline

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Economic and Environmental Benefits of Higher-Octane Gasoline Raymond L. Speth,*,†,‡ Eric W. Chow,§ Robert Malina,‡ Steven R. H. Barrett,‡ John B. Heywood,§ and William H. Green† †

Department of Chemical Engineering, Massachusetts Institute of Technology, Cambridge 02139, Massachusetts, United States Department of Aeronautics and Astronautics, Massachusetts Institute of Technology, Cambridge 02139, Massachusetts, United States § Department of Mechanical Engineering, Massachusetts Institute of Technology, Cambridge 02139, Massachusetts, United States ‡

S Supporting Information *

ABSTRACT: We quantify the economic and environmental benefits of designing U.S. light-duty vehicles (LDVs) to attain higher fuel economy by utilizing higher octane (98 RON) gasoline. We use engine simulations, a review of experimental data, and drive cycle simulations to estimate the reduction in fuel consumption associated with using higher-RON gasoline in individual vehicles. Lifecycle CO2 emissions and economic impacts for the U.S. LDV fleet are estimated based on a linearprogramming refinery model, a historically calibrated fleet model, and a well-to-wheels emissions analysis. We find that greater use of high-RON gasoline in appropriately tuned vehicles could reduce annual gasoline consumption in the U.S. by 3.0−4.4%. Accounting for the increase in refinery emissions from production of additional high-RON gasoline, net CO2 emissions are reduced by 19−35 Mt/y in 2040 (2.5−4.7% of total direct LDV CO2 emissions). For the strategies studied, the annual direct economic benefit is estimated to be $0.4−6.4 billion in 2040, and the annual net societal benefit including the social cost of carbon is estimated to be $1.7−8.8 billion in 2040. Adoption of a RON standard in the U.S. in place of the current antiknock index (AKI) may enable refineries to produce larger quantities of high-RON gasoline.

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INTRODUCTION Operation of light-duty vehicles (LDVs)cars, pickup trucks, sport utility vehicles, and vansin the U.S. generated 1037 million metric tons of CO2 in 2011, representing 19.0% of greenhouse gas (GHG) emissions from the U.S. that year.1 The vast majority (98.9%) of fuel consumption by LDVs is gasoline used in spark-ignition engines. In 2011, total gasoline consumption in the U.S. was 507.5 billion liters (93% of which was used in LDVs), at a total retail cost of $458.5 billion.1 Given the size of the U.S. LDV fleet, even modest efficiency improvements can have a significant impact on absolute GHG emissions and total fuel expenses. In this paper, we examine the potential environmental and economic benefits of using higher-RON gasoline in new LDVs which use improved fuel characteristics to deliver improved fuel economy. The efficiency of spark ignition engines depends on the engine compression ratio and, for turbocharged engines, the boost level.2 The maximum allowable compression ratio and boost level are limited by the propensity of the fuel to autoignite before being consumed by the spark-initiated flame, a phenomenon referred to as knock. The antiknock characteristics of an engine can be expressed in terms of an octane requirement, where higher compression ratios and boost levels correspond to higher octane requirements, all other consid© 2014 American Chemical Society

erations being held equal. A fuel’s resistance to knock is characterized by its octane number, which is determined according to the standard research octane number (RON) and motor octane number (MON) test procedures.3−5 Thus, there is a direct relationship between the potential efficiency of a spark ignition engine and the octane number of the fuel. Producing gasoline that meets octane rating and other specifications6 from crude oil entails significant processing in oil refineries, with corresponding energy expenditures and GHG emissions. Several refinery processesin particular, catalytic reforming, isomerization, and alkylationare dedicated specifically to producing high-octane gasoline blending components.7 As a result, the economic and environmental benefits associated with the increased vehicle efficiency resulting from using higher-RON gasoline would be at least partially offset by the required increase in fuel processing. Two long-term trends may contribute to reducing the costs of producing high RON gasoline. Since the adoption of unleaded gasoline in the U.S. in the 1970s, gasoline has been Received: Revised: Accepted: Published: 6561

December 15, 2013 April 29, 2014 May 13, 2014 May 28, 2014 dx.doi.org/10.1021/es405557p | Environ. Sci. Technol. 2014, 48, 6561−6568

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Policy Analysis −1 ⎡ ΔFC ΔFE ⎤ = ⎢1 + −1 ⎥ ⎣ FC FE ⎦

labeled according to the antiknock index (AKI) which is defined as average of the RON and MON ratings.6 Recent studies have shown a declining influence of MON in determining engine knock behavior, to the extent that RON alone is a better predictor of knock resistance in most modern engines.8,9 For processes such as catalytic reforming, which produce blending components with high RON but relatively low MON, replacing the AKI specification for gasoline with a RON specification would make their effects on fuel ratings better indicators of their effects on actual engine behavior. RON standards are already in use in most countries excluding the U.S. and Canada, although some areas such as Europe do have a minimum MON as well. Ethanol has been increasingly used as a gasoline blending component, particularly since 2002,10 supported by policies including the federal Renewable Fuel Standard programs (RFS1 and RFS2) and tax credits for ethanol production. Due to the high RON of ethanol (109 RON), blending ethanol reduces the necessary RON for the petroleum-derived blendstock which is combined with ethanol.11,12 The combination of these factors may mitigate the energy and environmental costs of increasing production of high-RON gasoline. The purpose of this study is to quantify the net economic and CO2 emissions benefit that could be obtained by utilizing higher-RON gasoline in light-duty vehicles, based on reasonable assumptions for possible refinery changes and the evolution of the LDV fleet. This paper is the first modern, peerreviewed publication to address the costs and benefits of introducing higher-RON gasoline.

(1)

For gasoline with a RON that is ΔRON points higher than regular gasoline, this can be modeled as: −1 ⎡ drc ⎛ 1 dηb ⎞⎛ ηb d(FE) ⎞⎤⎥ ΔFC ⎜⎜ ⎟⎟⎜⎜ ⎟⎟ = ⎢1 + ΔRON −1 FC d(RON) ⎝ ηb drc ⎠⎝ FE dηb ⎠⎦⎥ ⎣⎢

= [1 + ΔRON·CR/ON·BE/CR·FE/BE]−1 − 1

(2)

where rc is the engine compression ratio, ηb is the engine brake efficiency, CR/ON is the increase in compression ratio per unit increase in octane number, BE/CR is the relative increase in engine brake efficiency per unit increase in compression ratio, and FE/BE is the relative increase in fuel economy per relative increase in engine brake efficiency. RON and Compression Ratio. Our estimate of CR/ON is based on a review of the existing literature. Studies using a single-cylinder engine by Russ13 found that the octane number requirement increased by 5 per unit increase in compression ratio (CR/ON = 0.2). Okamoto et al.14 and Kalghatgi et al.8,15 found that an increase of roughly 6 RON was required per unit increase in compression ratio for direct injection spark ignition engines (CR/ON = 0.17). A literature review by Duleep16 for the Coordinating Research Council found that a 4−5 point increase in RON is required for a unit increase in compression ratio (CR/ON = 0.2−0.25). In addition, Duleep found that for new vehicles in 2009, the average compression ratio for vehicles that recommended or required premium gasoline was 0.9 higher than for vehicles designed to use regular gasoline. Premium gasoline in the U.S. has an AKI at least 4 points higher than regular gasoline, giving an estimate of CR/ON = 0.22. Considering the literature as a whole, we assume that CR/ ON is in the range 0.17−0.25. Engine and Vehicle Modeling. To determine BE/CR, we used a combination of engine simulations and literature review to scale engine performance maps to the higher compression ratios permitted by higher-RON gasoline. For naturally aspirated (NA) engines, we modeled a 2.0 L, 4-cylinder inline engine with port fuel injection in GT-Power (version 7.2; see Section S1.1 of the Supporting Information (SI)), and simulated part-load conditions over a range of compression ratios to estimate BE/CR. Nakata et al.17 found a 9% relative increase in brake efficiency when increasing the compression ratio from 9.8:1 to 13:1 when operating at constant load, corresponding to BE/CR = 2.8%. Muñoz et al.18 found an average of BE/CR = 2.33% for an increase in compression ratio from 10:1 to 11:1 for three different part-load conditions. We use Autonomie (version R12) to simulate standard drive cycles and estimate the reduction in on-the-road fuel consumption, which incorporates the effect of FE/BE. Since increasing the compression ratio of an engine increases its maximum power, we use Autonomie to develop a torque− speed map for a downsized (reduced displacement volume) engine with the same maximum power as the baseline engine. The downsized engine exhibits additional fuel economy improvements by shifting midload operating points to more efficient regions of the engine’s performance map. For turbocharged engines, we expect the relative efficiency improvement to be higher than for NA engines due to the lower baseline compression ratio.19 There may be additional benefits for boosted engines, e.g. by using the increased RON

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MATERIALS AND METHODS We considered three general strategies for increasing the usage of high-RON fuel in vehicles designed to take advantage of its properties. Based on logistical considerations involving the existing fuel distribution infrastructure, we suggest it would be preferable to avoid introducing an additional fuel grade to be sold alongside the existing “regular” and “premium” gasoline grades currently available. Any increase in the RON of regular gasoline would offer a negligible benefit for existing vehicles, resulting in a significant waste in refining effort until most of the LDV fleet is replaced. Instead, we assume a policy where the U.S. adopts a RON standard for regular and premium gasoline, with minimum RON ratings that correspond approximately to those of existing grades, 92 RON for regular and 98 RON for premium. Then, vehicle manufacturers introduce new vehicles which require the 98 RON gasoline. Over time, these vehicles will make up an increasing fraction of the LDV fleet, and refineries will produce larger proportions of premium (high RON) gasoline to satisfy the fuel demand from these vehicles. By introducing vehicles that utilize higher-octane gasoline in this manner, a gradual increase in the average RON can be realized without requiring the introduction of a new fuel grade. We note that the requirement of using only existing fuel grades places limits on possible efficiency improvements. Significant innovations in vehicle or fuel processing technology could warrant the introduction of additional automotive fuels in order to achieve system-wide economic and environmental benefits beyond those described in this study. Vehicle Fuel Consumption Modeling. The relative change in fuel consumption ΔFC/FC is related to the relative change in fuel economy ΔFE/FE by 6562

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environmental impact assessment, but note that other effects (such as air quality) are possible. For the purposes of our analysis, we consider a system which consists of the refinery and the end users of the refinery’s products. With the exception of the enforced ratio between premium and regular gasoline, the production rates for all other refinery products are allowed to vary freely. Changes in the refinery product slate are offset by external purchases and sales. For each product, we compute the change in economic value associated with importing or exporting the amount of that product required to make up the change in production. The environmental impact of importing or exporting products is determined based on the CO2 emissions associated with extracting, transporting, and processing the corresponding raw material (e.g., crude oil or natural gas). The principal refinery products displace imports or exports of the same. The consumption of gasoline and ethanol within the system in the high-premium case decreases in accordance with the vehicle and fleet modeling results. Excess fuel gas from the refinery displaces natural gas on an energy basis at a discounted price. Light naphtha produced by the refinery displaces LPG with the same price on an energy basis. For refinery products which displace other products on an energy basis, the differences in combustion-related CO2 emissions are also included. All changes in economic value and CO2 emissions, including displacement effects, are conservatively attributed to the change in production of high-RON gasoline. The required processing-related emissions associated with refinery products are determined from a process-level lifecycle analysis of the standard refinery. Lifecycle emissions associated with following processes are taken from the Argonne GREET Model:27 extraction and transportation of crude oil, production and consumption of natural gas and propane, and production of corn-derived ethanol. To permit comparison of the economic and environmental impacts, we monetize the change in CO2 emissions using the “social cost of carbon” developed by the U.S. Government.28,29 Here, we assume a 3% discount rate and use the mean social cost for emissions in 2040, $67.26 per metric ton (2011 dollars). To estimate the total impact for the U.S. refinery system and LDV fleet, we use the net CO2 emissions change and net change in economic value for the model refinery to compute the changes per unit gasoline production. These unit changes are then scaled by the total baseline gasoline consumption in 2040 to obtain the estimated total impact of transitioning to higher-RON gasoline.

to increase both compression ratio and boost level, but these effects cannot be quantified with currently available data. LDV Fleet Modeling. In the fleet model, future trends are extrapolated based on assumed rates of growth,23,24 using historical data1,20−22 from 1960−2010 for calibration. The fleet composition is distinguished by vehicle weight class, model year and powertrain technology. We introduce four additional powertrains to represent the set of vehicles of each powertrain type designed to operate on high-RON gasoline. Based on a 3 year policy-decision time frame for gasoline octane rating standards and allowing 3−5 years for a model redesign,25 we assume that higher-RON vehicles start entering the fleet in 2020. Based on typical rates of adoption for engine and vehicle technologies,26 it is assumed that 100% of vehicles sold for each powertrain type are of the higher-RON type by 2030. The proportion of higher-RON vehicle sales is interpolated linearly for the period 2021−2029. We assume that the mileage for each vehicle class and model year is independent of the fuel type used, that is, we neglect any potential rebound effects. Refinery Modeling. We use an optimization-based refinery modeling approach to estimate the changes in refinery operations as the ratio of premium to regular gasoline changes. This model is based on Aspen Technology’s “Gulf Coast” model of a typical U.S. Gulf Coast refinery. The optimization problem of maximizing refinery profit by adjusting process parameters and stream allocations is solved for each set of input parameters using Aspen PIMS (Version 8.2; See Section S1.2 of the SI). We constrain the ratio of premium to regular gasoline, while allowing the total production of gasoline and all other refinery products to vary. We have adjusted the model to represent a 100 000 barrel per day refinery with a product slate that approximates current U.S. petroleum product consumption. Prices for feedstocks and refined products are based on projections for 2040 from the 2013 EIA Annual Energy Outlook1 with some modifications to maintain a reasonable product slate. The modifications are detailed in Section S2 of the SI. In our baseline scenario, we assume that U.S. regulators replace the current AKI standard for gasoline with a 92 RON minimum for regular gasoline and 98 RON minimum for premium gasoline. These RON values are chosen to approximate the current RON values of regular and premium gasolines with AKI values of 87 and 93, respectively. Lifecycle CO2 Emissions. To estimate the CO2 and economic impact of transitioning to a LDV fleet consisting largely of premium-required vehicles, we examine the changes in refinery operations required to shift from a low premium fraction (10% of gasoline production) to a high premium fraction (80% of gasoline production). According to the results of the fleet model, this corresponds approximately to the expected gasoline consumption of the fleet in 2040. Based on the results of the fleet model, the premium fraction needed to satisfy the LDV fleet in 2040 varies from 79.3% with CR/ON = 0.25 to 79.6% with CR/ON = 0.17. The impact of this variation is neglected when determining the refinery product slate. For the period 2020−2040, we expect the changes in the refinery required to produce intermediate levels of premium gasoline will be no more severe than those required to produce 80% premium gasoline. Therefore, the well-to-wheels CO2 emissions reduction per distance traveled by high-RON vehicles in the intermediate years should be at least as favorable as in 2040. We only consider changes in lifecycle CO2 emissions as part of our

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RESULTS Vehicle Modeling. Figure 1 shows that the relative increase in brake efficiency per unit increase in compression ratio (BE/ CR) decreases as the base compression ratio increases for the engine model described in the “Materials and Methods” section. For an engine with a compression ratio of 10.5, we observe BE/CR = 1.9% for the simulated engine. In combination with the results from the literature discussed in the “Materials and Methods” section, we estimate an average value of BE/CR = 2.4%, and a range of CR/ON = 0.17%−0.25. For a 6 point increase in octane number, the increase in relative efficiency for NA engines is then estimated to be 2.4−3.5%. Autonomie simulations of FTP-75 and HWFET drive cycles show that the downsized, higher compression ratio engine consumes 3.0−4.5% less fuel than the baseline NA engine, 6563

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Figure 1. Relative increase in midload brake efficiency per unit increase in compression ratio (BE/CR) for a naturally aspirated, 2.0 L, 4-cylinder inline engine with port fuel injection modeled in GT-Power.

corresponding to FE/BE = 1.32. By comparison, the reduction in fuel consumption for the higher compression ratio engine without downsizing is 2.2−3.2%, corresponding to FE/BE = 0.94. For turbocharged engines, where the base compression ratio is lower, BE/CR will be higher. Extrapolating historical data30 to 2012, we estimate a typical baseline compression ratio of 11.8 for direct injection, NA engines and a compression ratio of 10.0 for direct injection turbocharged engines. Following the trends shown in Figure 1, we estimate that BE/CR for a turbocharged engine, with its lower baseline compression ratio, will be 1.65 times the value for a NA engine, that is, BE/CR = 3.9%. This gives an estimated 4.9−7.1% reduction in fuel consumption for turbocharged engines using higher-RON gasoline. LDV Fleet. The projected composition of the U.S. LDV fleet is shown in Figure 2. Higher-RON vehicles of each gasolinefueled powertrain type are introduced in 2020. By 2034, a majority of the gasoline-fueled vehicles are of the higher-RON variants, and by 2040 these vehicles make up 75% of the onthe-road fleet. Figure 3 shows the total gasoline consumption and the split between gasoline grades resulting from the introduction of high-RON vehicles with CR/ON = 0.17−0.25, as well as the reference case where additional high-RON vehicles and highRON fuel are not introduced. The total distance traveled by LDVs in 2040 is estimated to be 6.76 × 1012 km, corresponding to an average on-the-road fuel economy of 6.22 L/100 km (37.8 mpg) in the reference case. With the introduction of higher-RON vehicles, overall gasoline consumption by the LDV fleet decreases by 12.8− 18.9 GL/y in 2040, or 3.05−4.48%, corresponding to an average fuel economy of 5.94−6.03 L/100 km (39.0−39.6 mpg). In 2012, 8.8% of the gasoline consumed is premium. By 2040, this percentage will have grown to 79.3−79.6%, used primarily in vehicles designed to utilize higher-RON gasoline. Refinery & Lifecycle Analysis. Changes in the refinery product slate associated with shifting from 10% premium to 80% premium affect the net CO2 emissions and refinery economics. The changes in major product volumes are less than 10% in almost all scenarios. Details on these changes for all of

Figure 2. Projected U.S. LDV Fleet composition by powertrain, with divisions between standard and high octane (HO) vehicles. Abbreviations: naturally aspirated (NA), spark ignition (SI), hybrid electric vehicle (HEV), plug-in hybrid electric vehicle (PHEV), electric vehicle (EV).

Figure 3. Projected annual gasoline consumption, total and by grade, for U.S. LDV fleet for reference and higher-RON cases. The spread between the lines in the “high octane” case covers the estimated range of CR/ON.

the scenarios described in this section are included in Section S4.2 of the SI. Baseline Scenario. In the baseline scenario, when premium production is increased to 80%, total gasoline production decreases by 6.1%. This is partly due to the reduced yield associated with higher-severity reforming, and partly a result of diversion of streams from the gasoline pool to other products, in particular diesel and light naphtha. While the decrease in 6564

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gasoline production exceeds the 3.0−4.5% decrease in gasoline consumption (due to increased vehicle efficiency), the 1.7− 2.6% decrease in total liquid fuel consumption predicted by the fleet model more than offsets the 1.1% decrease in total liquid fuel production predicted by the refinery model. The impact on U.S. lifecycle CO2 emissions is driven primarily by the reduction in gasoline combustion-related emissions. Refinery emissions associated with gasoline production, which comprise 6% of gasoline lifecycle CO2 emissions, increase by approximately 8%. For the whole U.S. LDV fleet, the net impact is a lifecycle reduction in annual CO2 emissions of 19−35 Mt CO2. The net increase in available liquid fuels (after factoring in the reduction in gasoline consumption) leads to a net economic benefit when shifting to a high premium:regular ratio. The benefit is reduced by the need to import a high value product (gasoline) while exporting a lower value product (straight-run naphtha). In total, this represents a net annual savings of $0.4− 6.4 billion. To produce more high-RON gasoline, the refinery uses multiple strategies. In the reference case, there is some octane “giveaway” for regular gasoline, where the RON exceeds the requirement by approximately 1.7 points; in the high-premium case, both grades just meet the RON specifications. The severity and utilization of the catalytic reforming process increase in the high-premium case. The RON of the resulting reformate stream increases from 94.3 to 102 (the maximum permitted in the process model), and utilization increases by 3.8%. This occurs at the cost of converting more of reformer feedstock to light ends. Isomerization is used to increase the RON of some low-octane naphtha streams, while others are diverted from the gasoline pool and sold as a lower-value product. Sensitivity to Product Prices. We examined variations on our baseline scenario to determine the effect of relative product prices on the resulting product slates for high- and lowpremium configurations. The net savings for the aggregate U.S. refinery and LDV fleet system in these cases are shown in Figure 4b. Since there is not a substantial established market for the low-octane straight-run naphtha, its price has a large uncertainty. To address this, we considered as a lower bound a scenario where the price of this stream was half that of LPG on an energy-equivalent basis. In this scenario, the amount of light naphtha produced decreases by 90% while the volume of gasoline increases correspondingly. Overall, the reduction in CO2 emissions is 1.7 Mt/y less than in the baseline scenario, while the economic benefit is reduced or eliminated. A 10% increase in gasoline prices relative to other fuels decreases the reduction in CO2 emissions by 1.7 Mt/y compared to the baseline scenario. Increasing the price of diesel and jet fuel by 10% has no effect on the refinery product slate or emissions. Sensitivity to Refinery Configuration. Our baseline scenario uses the refinery equipment available today, that is, it does not require significant capital investment. However, it is reasonable to expect some equipment changes and capital investment in refineries by 2040, even in the absence of a new octane rating standard. We therefore considered a scenario where we modified the refinery configuration by increasing capacities of bottlenecked process units (the alkylation unit, the hydrocracker, and the delayed coker) and introducing a propylene dimerization unit, which we refer to as the “advanced refinery”

Figure 4. Reduction in CO2 emissions, direct monetary savings due to changes in fuel production and consumption, and net societal benefit (combining direct monetary savings with monetized value of CO2 emissions reduction based on the social cost of carbon) associated with switching to high usage of premium gasoline, and sensitivities of these benefits to changes in fuel prices, refinery configuration, and fuel specifications. Error bars indicate the estimated range of CR/ON. Numerical data used in this figure are tabulated in the SI, Section S4.1.

configuration. The total U.S. impact for this scenario is summarized in Figure 4c. We also considered scenarios with the expansions comprising the advanced refinery introduced separately, which are described in Section S3.1 of the SI. The addition of the propylene dimerization unit increases gasoline production and eliminates excess fuel gas production; the refinery purchases natural gas to satisfy its net fuel demand. With the advanced refinery, the production of gasoline increases by 10.2% in the reference case and 15.7% in the high-premium case, compared to the baseline refinery. Transitioning to the high-premium case with the advanced refinery shows a $1.4 billion increase in the annual cost savings and an 8.3−8.9 Mt/y increase in the CO2 emissions reduction compared to the standard refinery. The refinery expansions eliminate the light naphtha produced in the baseline scenario. 6565

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Sensitivity to Gasoline Ethanol Content and Octane Specification. Ethanol, with its high RON and even higher volumetric blending RON,31 has a significant impact on the ability of the refinery to produce large quantities of high-RON gasoline. We considered scenarios where the amount of ethanol blended with gasoline was increased from 10% by volume to either 15% or 20% by volume, referred to as E15 and E20, respectively. Additional vehicle modifications to support E15 and E20 may be required in these scenarios.32 The net effects of these scenarios are summarized in Figure 4d. The comparisons made here are between cases where the ethanol blending level is held constant, which minimizes the effect of uncertainties in the lifecycle emissions associated with ethanol. For E15, the changes in the refinery required to produce the high-premium product slate are greatly reduced in comparison to the baseline scenario. The refinery no longer produces the low-value light naphtha stream, and the reduction in total liquids production is half that of the baseline scenario. The 1.8% reduction in gasoline production is significantly less than the 3.0−4.4% reduction in gasoline consumption. These effects reduce emissions by an additional 14 Mt/y and increase the economic benefit by $7.5 billion per year over the baseline scenario. With E20, few changes are required to refinery operations, as there is already a RON giveaway of 7.1 points in the reference case. CO2 emissions decrease by an additional 14 Mt/y over the baseline scenario and the annual economic savings is $12.1 billion larger than in the baseline scenario. The minimal refinery adjustments required to produce a high-premium product slate with E15 or E20 suggest that higher ethanol blending would make increasing the RON of premium gasoline feasible. Here, we consider scenarios using E10, E15, and E20 with the RON standard for premium gasoline increased from 98 to 100. Increasing RON allows further increases in the compression ratio and, consequently, vehicle efficiency. However, it is difficult to produce large quantities of 100 RON gasoline from petroleum with a typical refinery configuration. With E10, the refinery produces 10.6% less gasoline while producing a quantity of light naphtha equal to 4.2% of the input crude oil. While the CO2 emissions reduction in the 100 RON scenario is 0−5 Mt/y higher than the baseline (98 RON) scenario, the high-premium product slate is now economically unfavorable compared to the reference case, with a direct economic cost of $13−22 billion per year. With E15 or E20, the high-premium case is beneficial both economically and in terms of emissions, but in both scenarios, the net societal benefit is smaller with 100 RON premium than for the corresponding scenario with 98 RON premium. To evaluate the influence of the octane standard on the refinery’s ability to produce a high-premium product slate, we compare the baseline scenario, which uses the RON standard, to one where the current AKI standard is used for both gasoline grades. In the AKI scenario, it is more difficult for the refinery to produce the high-premium product slate, and there is a larger shift in the product distribution from gasoline to light naphtha. In the baseline scenario, approximately 50% of the octane rating increase is driven by the increase in catalytic reforming severity. The reformate produced by this process has a high RON but relatively low MON, and so changes in this process are less effective in producing gasoline with a high AKI. In the AKI scenario, the CO2 emissions savings associated with the high-premium case decreases by 9.0 Mt/y, and the net

economic benefit decreases by $5.0 billion per year compared to the baseline scenario.

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DISCUSSION Our analysis suggests that transitioning the U.S. LDV fleet to higher-RON gasoline would result in significant economic and environmental benefits through reduced gasoline consumption. Fleet modeling which accounts for the time it takes to introduce new vehicle designs and the evolution of the fleet composition indicates that it would take approximately 20 years for these enhanced vehicles to make up a majority of the in-use fleet. Widespread adoption of vehicles designed to use 98 RON gasoline, equivalent to the premium gasoline now sold in some U.S. markets, could reduce CO2 annual emissions by 19−35 Mt (valued at $1.3−2.3 billion based on the social cost of carbon). Total annual fuel costs could be $0.4−6.4 billion lower by 2040, depending on the improvement in vehicle efficiency achieved per increase in RON determined by the parameters CR/ON, BE/CR, and FE/BE. Modest capacity expansions in refinery process units responsible for the production of high-RON blending components could increase the expected annual emissions reduction to 27−44 Mt (worth $1.8−2.9 billion) while simultaneously reducing annual fuel costs by $1.8−7.9 billion. Furthermore, the projected decline in gasoline demand in the U.S.1 suggests that refineries are likely to have excess capacity in RON-producing process units in the future which may produce an effect similar to these capacity expansions, if that capacity is not used for other purposes. Realizing these benefits would require coordination among auto manufacturers, refiners, and regulatory organizations. Auto manufacturers would need to modify engine designs to increase compression ratios and boost levels, and require that these vehicles be operated using higher-RON gasoline. Refiners would need to adjust the price differential between regular and premium gasoline to ensure that purchasing higher-efficiency vehicles requiring premium gasoline was an economical choice for consumers. Regulatory organizations would need to establish minimum RON requirements for premium gasoline. Our results indicate that the adoption of a RON standard for gasoline would be advantageous in conjunction with increased use of high-octane gasoline in reducing CO2 emissions and providing an overall societal economic benefit. In many scenarios, producing a high-premium product slate decreases gasoline production by more than the corresponding decrease in gasoline demand. However, this is generally accompanied by an increase in production of other fuels, which offsets the cost of making up the deficit in gasoline production. We expect that product prices varying in accordance with supply and demand would be able to absorb the impact of these changes in the available fuel supply. We note that the relative increase in production of diesel and jet fuel is compatible with long-term projections which show decreased demand for gasoline while demand for diesel and jet fuel continues to rise.1 The net change in CO2 emissions is relatively insensitive to refinery parameters, since emissions associated with refinery operations are only 6% of lifecycle CO2 emissions. In contrast, the economic impact varies significantly depending on how the product slate changes, especially when low-value products like fuel oil and low-octane naphtha are produced. Our results suggest that increased production of high-RON gasoline would make it possible to capture the octane number benefits of ethanol to reduce CO2 emissions while reducing fuel 6566

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costs. Scenarios with higher levels of ethanol blending demonstrate the largest benefits in terms of both CO2 emissions reductions and economic savings. The projected reduction in total gasoline consumption means that the ethanol content of gasoline could be increased while maintaining the current level of total ethanol production, provided vehicles were designed to operate using such fuels. With E15, transitioning to premium gasoline would potentially reduce annual CO2 emissions by 31−49 Mt (worth $2.1−3.3 billion) depending on refinery configuration, and directly save $7.9− 14.1 billion annually. For some refinery configurations and ethanol blending levels, our results indicate that additional CO2 emissions reductions could be achieved by increasing the RON of premium gasoline to 100. However, in each scenario, using an estimated social cost of carbon to value the reduction in CO2 emissions, the net societal benefit is smaller than for the equivalent scenario with a 98 RON standard for premium gasoline. Further analysis in the following areas would permit betterinformed decisions regarding high octane fuels. We have so far neglected the costs associated with designing and producing engines which appropriately utilize high octane fuel. While it is reasonable to expect that these costs will be small compared with the fuel cost savings over the lifetime of the vehicle, including these costs would produce a more complete estimate of the total economic effect. Given the high sensitivity of our results to the relationship between RON and vehicle fuel economy, we believe that research aimed at reducing uncertainty in the parameters forming this relationship (in particular CR/ON) for engine designs likely to be relevant in the future would be valuable. The near-term effects of introducing more premium-required vehicles could be estimated by examining the refinery production for the intermediate fleet compositions between 2020 and 2040. Additional steady-state benefits could potentially be realized, at the cost of introducing short-term inefficiencies or logistical challenges, by considering intermediate octane ratings for both fuel grades. Other high-octane fuel scenarios, for example expanding the use of ethanol flex fuel (E85) for those vehicles requiring higher octane fuel, could also be considered. Finally, the analysis could be extended to account for other GHGs and environmental impacts in addition to CO2 emissions.

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REFERENCES

(1) Annual Energy Outlook 2013, DOE/EIA-0383(2013); Energy Information Administration: Washington, DC, 2013. (2) Heywood, J. B. Internal Combustion Engine Fundamentals; McGraw-Hill, 1988. (3) Standard Test Method for Research Octane Number of SparkIgnition Engine Fuel, D2699-12a; ASTM International, 2012. (4) Standard Test Method for Motor Octane Number of Spark-Ignition Engine Fuel, D2700-12a; ASTM International, 2012. (5) Ferguson, C. R.; Kirkpatrick, A. T. Internal Combustion Engines: Applied Thermosciences; John Wiley & Sons: New York, 2001. (6) Standard Specification for Automotive Spark-Ignition Engine Fuel, D4814; ASTM International, 2013. (7) Gary, J. H.; Handwerk, G. E. Petroleum Refining: Technology and Economics, 4th ed.; Marcel Dekker, Inc., 2001. (8) Kalghatgi, G. Fuel Anti-Knock QualityPart I. Engine Studies, SAE Technical Paper 2001-01-3584, 2001. (9) Mittal, V.; Heywood, J. B. The Shift in Relevance of Fuel RON and MON to Knock Onset in Modern SI Engines Over the Last 70 Years, SAE Technical Paper 2009-01-2622, 2009; Vol. 2; pp 1−10. (10) Annual Energy Review 2011, DOE/EIA-0384(2011); Energy Information Administration, 2012. (11) Anderson, J.; DiCicco, D.; Ginder, J.; Kramer, U.; Leone, T.; Raney-Pablo, H.; Wallington, T. High octane number ethanolgasoline blends: Quantifying the potential benefits in the United States. Fuel 2012, 97, 585−594. (12) Stein, R. A.; Polovina, D.; Roth, K.; Foster, M.; Lynskey, M.; Whiting, T.; Anderson, J. E.; Shelby, M. H.; Leone, T. G.; VanderGriend, S. Effect of heat of vaporization, chemical octane, and sensitivity on knock limit for ethanolGasoline blends. SAE Int. J. Fuels Lubr. 2012, 5, 823−843. (13) Russ, S. A Review of the Effect of Engine Operating Conditions on Borderline Knock, SAE Technical Paper 960497, 1996. (14) Okamoto, K.; Ichikawa, T.; Saitoh, K.; Oyama, K.; Hiraya, K.; Urushihara, T. Study of Antiknock Performance Under Various Octane Numbers and Compression Ratios in a DISI Engine, SAE Technical Paper 2003-01-1804, 2003. (15) Kalghatgi, G. T.; Nakata, K.; Mogi, K. Octane Appetite Studies in Direct Injection Spark Ignition (DISI) Engines, SAE Technical Paper 2005-01-0244, 2005. (16) Duleep, K. G. Review to Determine the Benefits of Increasing Octane Number on Gasoline Engine Efficiency: Analysis and Recommendations, CRC Project CM-137-11-1b; Coordinating Research Council, Inc., 2012. (17) Nakata, K.; Uchida, D.; Ota, A.; Utsumi, S.; Kawatake, K. The Impact of RON on SI Engine Thermal Efficiency, SAE Technical Paper 2007-01-2007, 2007. (18) Muoz, R. H.; Han, Z.; VanDerWege, B. A.; Yi, J. Effect of Compression Ratio on Stratified-Charge Direct- Injection Gasoline Combustion, SAE Technical Paper 2005−01−0100, 2005. (19) Gerty, M. D.; Heywood, J. B. An Investigation of Gasoline Engine Knock Limited Performance and the Effects of Hydrogen Enhancement, SAE Technical Paper 2006-01-0228, 2006. (20) Davis, S.; Diegel, S.; Boundy, R. Transportation Energy Data Book: ed. 31; Technical Report ORNL-6987; Oak Ridge National Laboratory: Oak Ridge, TN, 2012. (21) Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975 through 2009, EPA420-R-09-014; U.S. Environmental Protection Agency, Office of Transportation and Air Quality, 2009. (22) Summary of Fuel Economy Performance; National Highway Traffic Safety Administration, 2012. (23) Bastani, P.; Heywood, J. B.; Hope, C. The effect of uncertainty on US transport-related GHG emissions and fuel consumption out to 2050. Transp. Res., Part A 2012, 46, 517−548. (24) Chow, E. W. Exploring the Use of a Higher Octane Gasoline for the U.S. Light-Duty Vehicle Fleet. M.Sc. thesis, Massachusetts Institute of Technology, 2013.

ASSOCIATED CONTENT

S Supporting Information *

Refinery model parameters, detailed lifecycle sensitivity case results, and files needed to replicate the refinery simulations. This material is available free of charges via the Internet at http://pubs.acs.org/.

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Policy Analysis

AUTHOR INFORMATION

Corresponding Author

*Phone: +1 617-715-4472; e-mail: [email protected]. Notes

The authors declare no competing financial interest.

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ACKNOWLEDGMENTS We acknowledge BP for providing financial support for this work, as well as for providing expert advice on the refinery modeling portion of this work. We also thank Aspen Technology for providing access to their PIMS software and the “Gulf Coast” refinery model. 6567

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Environmental Science & Technology

Policy Analysis

(25) Hill, K.; Szakaly, S.; Edwards, M. How Automakers Plan Their Products: A Primer for Policymakers on Automotive Industry Business Planning; Center for Automotive Research, 2007. (26) New Vehicle Technologies: How Soon Can They Make a Difference?; MIT Laboratory for Energy and the Environment, 2005. (27) Elgowainy, A.; Dieffenthaler, D.; Sokolov, V.; Sabbisetti, R.; Cooney, C.; Anjum, A. GREET Lifecycle Model, Version 1.0.0.8376, 2012. http://greet.es.anl.gov. (28) Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866; Interagency Working Group on Social Cost of Carbon, United States Government, 2010. (29) Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866; Interagency Working Group on Social Cost of Carbon, United States Government, 2013. (30) Heywood, J. B.; Welling, O. Z. Trends in performance characteristics of modern automobile SI and diesel engines. SAE Int. J. Eng. 2009, 2, 1650−1662. (31) Anderson, J. E.; Kramer, U.; Mueller, S. A.; Wallington, T. J. Octane numbers of ethanol- and methanol-gasoline blends estimated from molar concentrations. Energy Fuels 2010, 24, 6576−6585. (32) Durability Of Fuel Pumps And Fuel Level Senders In Neat And Aggressive E15, CRC Report 664; Coordinating Research Council, 2013.

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