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Enron Mail |
July 28, 2000
SMITH INTRODUCES BILL TO BAN MTBE IN REFORMULATED GASOLINE Acknowledging the uphill battle that lies ahead, Senate Environment Committee Chairman Bob Smith introduced on Thursday a bill to ban the use of a key component in the Clean Air Act's reformulated gasoline program. As a sign of his intention to press ahead on the issue, Smith also announced a full committee markup of the bill (S 2962) for Sept. 7. Smith (R-N.H.) declared on the Senate floor: "We need to ban MTBE. ... There will be no environmental backsliding." Smith said he had hoped to introduce the bill a day earlier, but he was still trying to solicit support from the main stakeholders on the issue. Smith's bill would ban the use of methyl tertiary butyl ether, an oxygenate used in 85 percent of reformulated gasoline, because of groundwater contamination problems that have occurred in several states, including New Hampshire. While acknowledging that MTBE is effective in reducing air pollution, Smith said it can migrate through the water table and has contaminated drinking water supplies. The ban of MTBE, a petroleum derivative used for years by the oil industry, would boost dramatically the demand for ethanol, an agriculture-based fuel that is the competing oxygenate in the reformulated gasoline program. Smith alluded to the tough negotiations he has had over the past six months with the ethanol lobby and the petroleum industry. "There are people who are dug in for various reasons," Smith said. Smith has made the MTBE ban one of his top legislative priorities this year. "It has to pass," Smith said. He also warned: "This is a tough, tough issue. Everybody's not going to get what they want." Smith promised that his bill "won't reduce the environmental benefits of the Clean Air program." In describing the main features of his bill, Smith said state governors would have the option of waiving the 2 percent oxygenate requirement in their state that is part of the reformulated gasoline program. The Clean Air Act amendments of 1990, which established the reformulated gasoline program for the nation's most polluted cities, require that 2 percent by weight of a gallon of gasoline must be oxygen. MTBE was the oxygenate of choice for the petroleum industry, because of its abundance and cheap cost of production. Smith said his bill also would give states the authority to ban the use of MTBE within their state. EPA also would have the authority to ban MTBE immediately. The bill itself would phase out MTBE within four years. Smith's bill also would provide $200 million from the leaking underground storage tank fund to clean up MTBE-contaminated sites. The bill would authorize EPA to conduct a study of the environmental consequences of the nation's transportation fuel supply. Smith noted that while Midwestern senators strongly support a boost for ethanol, the alternative fuel has its own environmental problems. The main concern is that ethanol prompts faster evaporation of gasoline into the atmosphere, which is a concern in New England and in California. Smith said he also was interested in establishing a program to boost the development of non-petroleum-based, alternative transportation fuels. He then introduced his own amendment to his own bill, based on draft legislation that he had been circulating among members. Smith acknowledged that a ban on MTBE would increase the cost of reformulated gasoline. He estimated his proposal would cost consumers approximately 3 cents to 4 cents per gallon extra in areas where reformulated gasolines were required. A proposal put forth by the ethanol industry -- to ban MTBE but keep the 2 percent oxygenate requirement, which would be met by ethanol -- would cost 8 cents per gallon and was unacceptable, Smith said. Smith said he disagreed with the Clinton administration's proposal to ban MTBE and establish an ethanol mandate. He estimated the cost at 6 cents per gallon. "Let the markets decide," Smith said. Smith also noted that the oil industry "is not real thrilled about this."
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