Dec 28, 2000

Saudi Company Says MTBE Issue is Merely U.S. Propaganda

In response to the Clinton administration urging Congress to reduce or eliminate the use of methyl tertiary butyl ether (MTBE) last month, petrochemical giant Saudi Basic Industries Corp. (SABIC) has spoken out against the U.S. plans to eliminate the controversial fuel additive.

Saudi Arabia’s Arab News reported that SABIC believes the United States’ claims that MTBE is hazardous to the environment were "merely propaganda."

"The real motive behind the allegations is political and economic and has nothing to do with the environment," SABIC sources told Arab News.

The elimination of MTBE is bad news for MTBE exporters such as SABIC, which accounts for approximately 5 percent of the world's petrochemical output and controls and operates 16 complexes with international firms also producing plastics, steel and fertilizers in the kingdom.

Saudi Arabia, the world's biggest oil producer, is looking to petrochemicals to help diversify its economy away from petroleum.

MTBE is a gasoline additive that was found to reduce air pollution; however health concerns over this additive have raised much controversy between the government, health organizations, the public and the fuel industry. A reported 11 states have been reported as having some level of MTBE contamination with California having the most reported incidences. In addition, California has been leading the way on solutions to the problem.

SABIC reported that its U.S. exports reached 700,000 tonnes or 23.3 percent of its total exports last year alone. The company claimed the move to phase out the petrochemical had forced SABIC to seek new export markets.

Other Middle Eastern and Asian MTBE manufacturers are preparing for the phase out that surely will affect manufacturers worldwide.

(Source: Reuters)