The US Energy Bill issued in July 2005 contained a renewable fuels mandate and this is driving the move to ethanol.  It is not about safety. In the USA, MTBE was first used as an octane-enhancer in the 1980’s but became the oxygenate of choice of the refining industry, following the implementation in 1990 of the Clean Air Act (CAA) and other state regulations. The subsequent amendments to the CAA required the use of oxygen in gasoline in areas with unhealthy levels of air pollution.  The CAA did not specifically require MTBE, just oxygen.  Although refiners could choose to use other oxygen-containing components such as ethanol, MTBE was the most commonly used oxygenate. With the passing of the Energy Bill in July 2005, the oxygen mandate was removed and a provision adopted which mandates the annual use of 4 billion gallons of renewable fuels, such as ethanol, in 2006 rising to 7.5 billion in 2012.

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In Europe too I understand that ETBE is gaining market share of MTBE. Why is this ?

ETBE is indeed gaining market share over MTBE because of EU fiscal policies to encourage bio-fuels. 

It is important to be clear that concerns about risk have nothing do to with the shift.  The results of a full EU risk assessment on MTBE, published in the Official Journal of the European Union on 4th December 2001, concluded that risk for consumers is not expected.  

The success of ETBE is linked to two pieces of EU legislation.  In May 2003 the European Commission published a directive (2003/30) designed to promote the usage of biofuels (including oxygenates with bio compounds) and other alternative fuels in road transport. The directive requires that all Member States set indicative national targets for the proportion of biofuels in all gasoline and diesel fuels sold on their market; and proposed as reference values a 2% minimum by the end of 2005, and 5.75% by 2010.

This was followed by directive 2003/96 on the taxation of energy products, which allows Member States to apply a total or partial tax exemption to biofuels.

ETBE is a biofuel (to the order of 47%) due to its bio-ethanol content and benefits from these tax incentives from Member States. This, coupled with its performance and handling benefits, have seen ETBE establish itself as the gasoline biofuel of choice. Consequently many MTBE manufacturers are switching production to ETBE.

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Most countries in Asia-Pacific have chosen to replace lead with MTBE.

In Asia-Pacific, MTBE is used primarily as an octane-enhancer to replace lead and reduce the levels of sulfur, benzene and aromatics in gasoline. It is extremely cost effective and helps expand gasoline volume.

Due to its excellent properties as a clean octane component, most countries in Asia-Pacific have managed to phase out lead and reduce the level of toxics in gasoline fairly quickly with the aid of MTBE.

However, due to the adverse publicity in the US, Japan has ceased to use it voluntarily (though official specifications continue to allow a 7% volume limit). Australia has instituted a 1% volume limit on the product.

The Japanese are reviewing the possibility of using bio-ETBE as a tool to meet their Kyoto commitments by 2010.

Many countries in Asia, such as China, South Korea, Taiwan, Malaysia, India and Singapore continue to use MTBE in their gasoline pool and the demand in these countries is still growing.

Some countries are experimenting with ethanol blended gasoline to reduce their dependence on oil products with limited success. This is due primarily to corresponding price increase of ethanol and a shortage of raw materials. They include Thailand, China, India and the Philippines.

In the Middle East, the pressing need to replace lead (in some countries) and reduction of sulphur will continue to make MTBE a valuable additive in replacing the lost octane due to cleaner fuels implementation.

In addition to its use as an octane enhancer, MTBE is increasingly being used as a feedstock for methyl methacrylate (MMA) in some countries such as Japan, South Korea and Singapore.  The demand for MMA is growing world wide due to the increased popularity of flat screen displays.
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What are the results in the USA of reformulated gasoline (RFG) that contains oxygenates ?

US Environmental Protection Agency studies have shown that RFG is making a significant contribution to year-on-year reductions in smog-forming pollutants and toxics.

RFG has been helping improve the air for millions of Americans since 1995. The use of RFG compared to conventional gasoline has resulted in annual reductions of smog-forming pollutants (volatile organic compounds and nitrogen oxides) and toxics (such as benzene). With the second phase of the RFG programme, which began in January 2000, the US Environmental Protection Agency (EPA) estimates that smog-forming pollutants are being reduced annually by at least 105,000 tonnes and toxics by at least 24,000 tonnes. Refiners are required to reduce the emissions of volatile organic compounds, toxics, and nitrogen oxides by 27%, 22%, and 7%, respectively, compared to the conventional gasoline they produced in 1990.

An independent study by the University of California at Berkeley found a decrease in motor vehicle emissions following cleaner-burning gasoline's introduction in the spring of 1996. Analyses of weather data and air pollution levels also indicate that the use of cleaner-burning gasoline has reduced peak smog levels. Benzene levels in California's air decreased by approximately 50 percent in 1996 following the gasoline's introduction.

Analysis of fuel data submitted to the EPA by industry for compliance purposes shows that emission reductions from the RFG program have been more than the programme requires each year since its introduction in 1995.
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Is there a problem of contamination of groundwater ?

Localized problems of groundwater contamination by fuels do occur from time to time, though they are not widespread.  The best way to manage any difficulties is to upgrade underground storage. 

It is very important to put matters in perspective. The extent of groundwater contamination with gasoline containing MTBE is very limited, even in California, where the authorities have nevertheless proposed to phase out MTBE.

In the United States, significant improvements to the Underground Storage Tank (UST) programme appear to have successfully reduced most MTBE detections to concentrations below five parts per billion (ppb) –  far below the 20 to 40 ppb suggested by the EPA Consumer Advisory to avoid MTBE's unpleasant odour and taste.  The US Geological Survey (USGS) has testified before the US Congress that MTBE contamination is at very low concentration levels and in summary considered MTBE to be a minor problem. 

According to the California Department of Health Services, UST upgrades have dramatically improved groundwater protection.  Data indicates that as USTs are upgraded the concentration level and frequency of MTBE detections is levelling off and beginning to decline.

The latest (October 2005) update by the California Department of Health Services (DHS) indicates that MTBE has been detected in 113 drinking water sources, out a total of over 13,600 sources sampled since 1990. 

In Denmark, the only European country claiming to be impacted by groundwater contamination, the level of occurrence of MTBE contamination is more comparable with other European countries (e.g. the UK, Germany, Finland, the Netherlands) than with the United States. The remediation sites identified by the Danish authorities are old petrol stations, equipped with traditional equipment and technology.