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Posted on  

June 4, 2003

Senate Signals Support for Using Ethanol

Associated Press

WASHINGTON - Rushing to embrace the wider use of ethanol nationwide, the Senate rejected an alternative Tuesday that would have allowed states to decide whether the corn-produced additive should be required in gasoline.

The vote signaled the Senate's strong support of a proposal that would double ethanol use in gasoline to 5 billion gallons a year by 2012 and require refineries nationwide to use the fuel, except for Hawaii and Alaska. Most ethanol is made in five Midwestern states.

In turning back efforts by a group of senators from the West and Northeast to limit the wide sweep of the ethanol requirement, the Senate set the stage for making the ethanol proposal a major part of a broad energy bill it hopes to complete in the coming weeks.

In addition to boosting ethanol demand, the proposal also would ban another gasoline additive, MTBE, which has been found to contaminate drinking water, and end a federal requirement that gasoline contain a minimum amount of oxygen in areas with air pollution problems.

The oil industry has said refiners can meet clean air standards without the oxygen mandate, which since 1990 has been credited with leading to significant reductions in air pollution from automobiles.

The increased ethanol use would be a boon to corn farmers. A bushel of corn produces about 2 1/2 gallons of ethanol. Ethanol supporters have praised the domestically produced fuel as a way to reduce America's reliance on imported oil. Using 5 billion gallons of ethanol a year is expected to displace about 250,000 barrels of oil, according to the ethanol industry.

While expanded use of ethanol has widespread political support among both Republicans and Democrats, a small group of senators, led by those from California and New York, strongly opposed requiring nationwide a gasoline additive made mostly in plants in the Midwest. It would have to be shipped by truck or rail to refineries across the country.

Sen. Dianne Feinstein, D-Calif., argued that requiring that California refiners use ethanol could cause supply shortages and lead to price spikes at the pump.

"This mandate forces California to use 2.5 billion gallons of ethanol over eight years that the state says is not needed," said Feinstein. She argued the requirement would benefit mainly Midwest corn farmers and ethanol producers.

Feinstein offered a change that that would allow states to exempt refiners from using ethanol if it could demonstrate to the Environmental Protection Agency that federal clean air standards could be met without the corn-based additive. Under the current proposal, only Hawaii and Alaska are exempted.

Feinstein's amendment was defeated 60-35, as was another amendment she offered that would have allowed governors to decide whether ethanol should be required. That amendment, whose co-sponsors included Democratic Sens. Hillary Rodham Clinton and Chuck Schumer of New York, failed 62-34.

"Why have a waiver when there is no problem. The problem doesn't exist," argued Senate Democratic leader Tom Daschle of South Dakota, a state that has both corn farmers and ethanol plants that would benefit by the national requirement.

Daschle said refiners in California, faced with a state ban on use of MTBE in gasoline, already are putting ethanol in 65 percent of the state's gasoline and will increase that to 80 percent by this summer with "absolutely no difficulty" in making the change.

The ethanol industry says it plans to sell 600 million gallons of ethanol in California this year, about a fourth of its 2003 ethanol production.


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