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Posted on  

June 13, 2001


1) EPA Won't Exempt Calif. From Fuel Rules

2) Senators Want More Renewable Fuels in Gasoline

EPA Won't Exempt Calif. From Fuel Rules

California must adhere to federal rules requiring the use of gasoline with additives such as corn-based ethanol that make it burn cleaner, Environmental Protection Agency Administrator Christine Todd Whitman said yesterday.

California plans to ban ethanol's main competitor, methyl-tertiary butyl ether, or MTBE, because of concerns that it could contaminate groundwater. State officials sought a waiver of federal rules requiring reformulated fuel, saying use of either additive would drive up the cost of gasoline and worsen shortages without substantially improving air quality.

The EPA disagreed. "We cannot grant a waiver for California since there is no clear evidence that a waiver will help California reduce harmful levels of air pollutants," Whitman said.

The Bush administration's decision was disclosed Saturday, although the official EPA announcement was yesterday. The action rebuffs California Gov. Gray Davis (D). Bush earlier rejected Davis's calls for federal regulators to impose electricity price caps.

Davis had said the state was able to meet federal clean-air requirements without using oxygenates such as ethanol or MTBE.

The action gives a boost to Archer Daniels Midland Co., Williams Cos. and High Plains Corp., the largest U.S. ethanol producers. It will allow corn growers and ethanol makers to tap the California market, which will need about 580 million gallons of ethanol a year, about one-third of current U.S. ethanol production.

The decision means ethanol will be used as MTBE is phased out starting in 2003.

Monte Shaw, a spokesman for the Renewable Fuels Association, the ethanol industry's trade group, said the decision would spur development of more than 40 proposed ethanol plants that are "out there with a foot on the shovel and they're waiting to push down."

"They've been waiting and waiting and waiting for 25 months," he said.

The industry, as of early June, has eight plants under construction, 34 are being expanded, and almost two dozen are scheduled to begin construction this year.

Senators Want More Renewable Fuels in Gasoline

In a move to help reduce U.S. dependence on foreign oil imports, legislation was introduced in the Senate on Friday that would require gasoline to contain a small portion of renewable fuels.

The renewable fuel standard would be phased in over time, required to be in 2 percent of each gallon of gasoline by 2008 and in 5 percent by 2016.

The bill would require all motor fuels sold in the United States to contain either biodiesel or ethanol from corn or biomass. Biodiesel is a diesel engine fuel made from vegetable oil, animal fat or algae. Biomass is made from crops, trees or even landfill gases.

A co-sponsor of the legislation, Democrat Tim Johnson of South Dakota, said the Bush administration's new national energy plan does not rely heavily enough on renewable fuels as part of the solution to America's energy problems.



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