Blaze Threatens the Availability of Some Kinds of Gas

The fire and explosion at the Arco Chemical Co. plant in Channelview, Tex., last week is threatening to reduce the availability of some types of gasoline, industry officials said Monday.

The explosion that killed 17 workers Thursday forced Arco to cease production there of methyl tertiary butyl ether, or MTBE, a component used to make lower-emissions and premium gasolines. Arco Chemical is 83% owned by Los Angeles-based Atlantic Richfield Co.

Industry sources said Arco Chemical, the nation’s largest maker of MTBE, will be able to supply oil-company customers with only 70% of its contractual MTBE commitments.

Because there are few alternatives to the Channelview plant’s MTBE production, industry officials fear shortages of certain gasolines.

“(MTBE) was tight before the accident happened, and it’s not readily available” elsewhere, said E. J. (Gene) Bohny, vice president of Texas Petrochemicals Corp., the second-largest maker of MTBE. “It will be short now.”

The fuels most likely to be affected:

* Premium unleaded gasolines that use MTBE to boost octane. Refiners could use other additives as a substitute, but that could affect costs.

* Gasolines delivered to cities such as Denver and Phoenix that require oxygen additives such as MTBE in the winter to reduce hydrocarbon air pollutants. Unocal Corp., which buys MTBE from Arco Chemical to put in gasoline it sells in Nevada and Arizona, said it will have to reduce the amount of oxygenate in fuels it delivers to those states.

* Gasolines--slated for introduction in the next few months--that use MTBE to reduce hydrocarbon emissions. Such introductions could be delayed, depending on the length of the Arco Chemical plant’s shutdown.

It is too soon to say how drastic the effects will be. But one thing is certain: Prices for MTBE, now about $1.10 a gallon, will go up sharply. And that could affect the wholesale price of products made with it.