Senate environment chief wary of ethanol mandate
Date: 19-Jun-00
Country: USA
Author: Doug Palmer
Stephen Bentfield, a spokesman for the Senate Environment and Public Works
Committee, said discussions are continuing "almost around the clock" on how to
eliminate or significantly reduce use of MTBE (methyl tertiary butyl ether),
which has turned up in groundwater supplies across the country.
"It's been Chairman (Robert) Smith's intention all along to get a bill done by
the Fourth of July recess," Bentfield told Reuters. "Whether that will happen
next week or the week after... I can't speculate."
In a sign of the difficulty lawmakers are having, tentative plans for a committee
business meeting on Tuesday have been scratched. No other date has been set yet
for the committee to take up MTBE legislation.
How the MTBE issue is resolved could have tremendous consequences for the ethanol
industry and corn producers.
Ethanol is made primarily from corn in the United States.
Both ethanol and MTBE are used to add oxygen to cleaner-burning "reformulated
gasoline" (RFG), which accounts for about one-third of total U.S. gasoline. By
law, RFG must contain 2-percent oxygen by weight.
The cleaner-burning gasoline is required in several cities with severe smog
problems and used voluntarily in other parts of the United States.
Because of the water contamination problems, the Clinton administration began a
rule-making process in March to significantly reduce or eliminate MTBE from fuel
supplies.
Since that procedure could take several years to complete under existing law,
Environmental Protection Agency Administrator Carol Browner called on Congress to
amend the Clean Air Act to provide for quicker action.
The administration also proposed replacing the 2-percent oxygen content
requirement with air quality performance standards for RFG. That would allow
refiners to make the cleaner-burning gasoline without using any "oxygenates."
To ensure a continued market for ethanol and other renewable fuels, the
administration recommended that Congress require a certain percentage of the
total U.S. gasoline supply come from renewable sources.
That idea was included in a bill introduced last month by Senate Minority Leader
Tom Daschle, South Dakota Democrat, and Senate Agriculture Committee Chairman
Richard Lugar, Indiana Republican.
The farm state senators proposed requiring 1.3 percent of total fuel supplies
come from renewable sources in 2000 and increasing that gradually to 3.3 percent
by 2010.
In his public comments, Smith has been hostile to the idea of replacing the
oxygen content requirement with a new programme to promote renewable fuels.
"Ethanol has absolutely nothing to do with eliminating MTBE from our drinking
water and I am not yet convinced that we should replace one mandate with
another," Smith wrote two months ago in Roll Call, a Capitol Hill newspaper.
Nonetheless, a draft bill circulated among members of the Environment and Public
Works Committee this week included a phased-in renewable fuels provision, but at
less than half the level of the Lugar-Daschle legislation.
Critics argue a renewable fuels standard is unnecessary. They say demand for
ethanol should increase because of government efforts to reduce or eliminate MTBE
and to dramatically cut the amount of sulphur in diesel fuel.
However, others see the need for a greater government role.
A bill offered by Sen. Christopher Bond, Missouri Republican, and a member of the
Environment and Public Works Committee, would maintain the 2-percent oxygen
mandate while phasing out MTBE. That would essentially allow ethanol to capture
nearly all of the RFG market, instead of just the 12 percent it currently has.
While a number of lawmakers from Midwest corn states favour that approach,
Daschle has argued it is unlikely to be approved because of opposition from other
parts of the country.
Sen. James Inhofe, Oklahoma Republican, and another Environment and Public Works
Committee, has proposed legislatio
