The northeastern region of the U.S. is one of the RFG (Reformulated Gas) Areas where the EPA dictates the use of an oxygenate in gasoline to lower carbon monoxide emissions. In the U.S., ethanol is the most common oxygenate, in addition to it raising a fuel’s AKI (Anti-Knock Index, commonly called octane) rating by about 2-3 points. Oil companies, realizing a means to lower the cost of refining, typically deliver a sub-octane fuel known as BOB (Blendstock for Oxygenate Blending) to fuel terminals in there areas, where ethanol is then blended into the fuel. This is the reason that in RFG areas one has difficulty finding ethanol-free fuel, as can be seen by comparing the RFG map to Pure-Gas.org map.
Without ethanol, BOB’s AKI rating is only 84, below the needed 87 for the cheapest Regular gas. BOB is not a legal “finished” fuel until ethanol is added. Thus, any disruption in the supply of ethanol (such as a storm or ethanol rail car explosion) will affect an oil company’s ability to provide finished gasoline. Prior to Sandy’s making landfall, this CNBC article summed up the danger simply: “Bottom line — if we run out of ethanol we run out of gasoline.”