gas, from which MTBE is derived. 
A quadrupling of natural gas prices in December and January from the previous 
year spurred producers to profit more by selling the pure gas to power 
companies instead of stripping out the methanol and butane needed for MTBE. 
Several of the country's major producers of MTBE were either shut down or 
operating at severely reduced capacity from December to February, including 
Enron Corp., Valero Energy Corp. and Global Octanes Corp. 
As a result, the year started with around 8 million barrels, or 14 percent 
less than last January's supplies, which industry analysts already considered 
tight a year ago. 
Although natural gas prices eased last month and allowed MTBE plants to come 
back up, there were problems in restarting several of the facilitiesafter 
remaining idle for a month or two. 
Last year's Midwest gasoline spike came amid new environmental rules imposing 
more stringent regulations for a new reformulated grade called RFG 2. 
This year, industry sources say the outlook looks just as expensive for the 
consumers in the Midwest, especially after the closure of refiner Premcor's 
80,000 barrel per day Blue Island refinery outside Chicago. The defunct 
plant's production used to provide Chicago with about half of its cleaner 
gasoline. 
In an attempt to steer clear of volatile prices, the Environmental Protection 
Agency said last week it will relax its emission standards from gasoline in 
Chicago and Milwaukee, which basically allows more ethanol - the corn-based 
alternative oxygenate to MTBE.

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