By the OGJ Online Staff
WASHINGTON, DC, Nov. 1 -- Policy makers should postpone decisions on whether to ban the fuel oxygenate methyl tertiary butyl ether in order to avoid gasoline supply shortages and price spikes, a Department of Energy official told lawmakers Thursday.
Acting Assistant Secretary for Fossil Energy Robert Kripowicz said DOE appreciates the view of California and 11 other states that want to eliminate the petrochemical as soon as December 2002 because of groundwater contamination concerns. But the risk of gasoline shortages is a more immediate worry, he indicated.
"We believe addressing these water quality concerns with near-term bans of gasoline additives would threaten the adequacy of gasoline supplies in those states," Kripowicz testified before the House Subcommittee on Oversight and Investigations.
If a sufficient number of states restricted MTBE use, refiners and distributors might remove the oxygenate from all gasoline in the region to protect the fungibility of the gasoline distribution system and avoid more specialized "boutique" fuels, according to Kripowicz.
"Although MTBE consumption is currently about 300,000 b/d nationally, in replacement terms MTBE's contribution to gasoline supplies is greater because of its high quality. Additionally, a loss of ability to use MTBE may also affect the ability of the US gasoline market to draw gasoline supplies from Europe, the major source of price-sensitive gasoline imports, since those refiners widely use MTBE."
Under the Clean Air Act, 10 urban areas that suffer from high levels of smog are required to use reformulated gasolines that contain at least 2% wt oxygen. Neither the Clean Air Act nor the Environmental Protection Agency, which administers the fuel program, mandates a specific oxygenate. But for commercial reasons refiners use MTBE in about 87% of RFG, according to EPA. The other practical alternative, fuel ethanol, is used extensively in the Midwest but is more expensive elsewhere.
EPA officials have urged Congress to give them more guidance on how to solve the MTBE issue even though the agency has the authority to ban the additive. However EPA has so far sought to discourage some congressional proposals to ban the oxygenate in 2 years. EPA also denied California's request for an exemption from the RFG oxygenate standard.
There is some political support for retooling RFG rules to encourage the replacement of MTBE with ethanol through a "renewable" oxygen standard. But whether such a measure will pass Congress this session is unclear.
In the interim, the agency plans a series of administrative reforms to give refiners more flexibility to meet RFG guidelines (OGJ Online, Oct. 24, 2001). EPA plans to give refiners more time to meet seasonal RFG requirements and to simplify accounting procedures.
And a formal proposal on if or when to phase-out MTBE will be ready for interagency review within 2 months, EPA told lawmakers.
The agency said US Geological Survey data indicates a "strong" relationship between MTBE use as a fuel additive in an area and finding low levels of MTBE.
But a USGS official told the subcommittee the health threat to water supplies is small compared to other water-related issues.
"MTBE levels do not appear to be increasing over time and are almost always below levels of concern from aesthetic and public health standpoints," said Robert Hirsch, USGS associate director for water. "The few locations in our database with high concentrations of MTBE may be associated with leaking underground storage tanks."
