By OGJ editors
WASHINGTON, DC, June 5 -- The US Court of Appeals for the Ninth Circuit in San Francisco, Calif., Wednesday unanimously affirmed a lower court decision that found California did not preempt federal authority when the state banned the fuel additive methyl tertiary butyl ether.
"We conclude that, in enacting the Clean Air Act, Congress left the states substantial authority to enact legislation governing matters of public health and safety. Though the MTBE ban is not expressly exempted from preemption by the Clean Air Act, the ban nonetheless is not preempted because it does not conflict with the goals and purposes of the Clean Air Act," the appeals court said.
The Renewable Fuels Association, which represents fuel ethanol producers, predicted the court's action might encourage additional states to ban MTBE. RFA says its members can easily supply refiners with product so states can meet federal reformulated gasoline program guidelines. Those rules essentially require either MTBE or ethanol to be added to RFG in the nation's smoggiest cities.
MTBE producers and fuel refiners argue there is no scientific justification for banning the additive. They argue that if policy makers force suppliers to rely on fuel ethanol, it could drive retail prices as much as 10¢/gal higher than conventional fuel depending on location.
Despite these predictions, New York, Connecticut, and California next year are banning MTBE due to groundwater contamination concerns. Washington state's ban also is scheduled for this year. An earlier MTBE ban in Arizona expired in 2001. Five other states—Colorado, Nebraska, South Dakota, Minnesota, and Iowa—already have bans on MTBE. Meanwhile, Kansas, Illinois, and Indiana, like California and New York, have bans that will activate in 2004. By 2006, a total of 16 states plan to have bans in place, according to American Petroleum Institute data.
Congress is now mulling an update to the RFG program within a pending energy bill. A Senate proposal now being debated phases down MTBE use nationwide, installs an ethanol mandate plan requiring refiners to more than double their use of ethanol to 5 billion gal by 2012, and eliminates the CAA's 2% wt. oxygenate standard for RFG.
The provision has wide bipartisan support in both the House and Senate although lawmakers in the Northeast and West Coast continue to voice concerns that expanding ethanol use could instigate short-term gasoline price spikes.
Ethanol supporters say fears over ethanol-related gasoline price increases are unfounded and that the pending provision gives suppliers flexibility through a credit trading system.