Senate panel approves MTBE phase-out bill, floor action unclear
By the OGJ Online Staff
WASHINGTON, DC, Sept. 26 -- The Senate Committee on Environment and Public Works Tuesday approved a controversial bill that would require the Environmental Protection Agency to ban the gasoline additive methyl tertiary butyl ether (MTBE) in 4 years.
The chemical compound has contaminated groundwater supplies in California and some other states.
MTBE producers and refiners say the chemical, which is used to help reformulated gasoline (RFG) burn cleaner, does not pose a health threat and the solution is not to ban it, but to prevent leaks of gasoline containing it.
The American Petroleum Institute said, "The debate over the reformulated gasoline oxygen mandate and the phase down of MTBE must be resolved to provide the petroleum industry with the flexibility and certainty it needs to provide adequate supplies of affordable fuels now and in the future."
It said the Senate bill "would be a significant step toward helping U.S. refiners provide adequate supplies of clean, environmentally acceptable gasoline to consumers. Without federal legislation, states are moving forward with their own efforts to address the oxygen mandate and MTBE issues. They are creating more boutique fuels that can contribute to tightened supplies and distribution problems. Further, states' efforts are mired in uncertainty because of lawsuits challenging state authority to regulate fuels. Federal legislation is needed to help resolve this uncertainty and avoid the creation of more boutique fuels."
Prospects for the bill are uncertain because the midwestern congressmen who support ethanol use want lawmakers to amend the bill to include a renewable oxygen standard for RFG.
Current RFG rules require refiners to add a minimum of 2% wt of oxygenate in each gallon. MTBE and fuel ethanol are the most widely available oxygenates. Opponents of a renewable oxygen standard, such as API, say it is a de facto mandate to use fuel ethanol, which is expensive to transport and may not be available in large enough volumes.
Fuel ethanol supporters say there will be enough supply and argue that removing the oxygen standard will mean refiners have to use more gasoline.
Using more gasoline worries groups that don't necessarily support subsidizing fuel ethanol. Sen. James Inhofe (R-Okla.) opposes the Senate bill, first introduced by Bob Smith (R-NH). Inhofe cited a Department of Energy analysis that said the bill, S. 950, could cause a 10% drop in summer US gasoline supply, or between 500,000 and 1 million b/d.
Under an agreement with committee chairman James Jeffords (I-Vt.), lawmakers did not offer amendments at the committee level. But several senators predicted the bill would never pass in its current form.
Both House and Senate leaders have said they want to streamline the RFG program to avoid shortages that have occurred when pipeline disruptions or refinery outages make it hard for industry to supply various gasoline specifications.