CLEAN AIR, CORN SALES, AND VOTES

April 16, 1990
Nothing can sabotage progress on a national issue like good old home state politics. The U.S. Senate just couldn't resist using watershed environmental legislation to boost corn sales and win votes. Vehicle fuel provisions of its Clean Air Act reauthorization bill amount to pork barrel mischief that won't improve overall air quality.

Nothing can sabotage progress on a national issue like good old home state politics. The U.S. Senate just couldn't resist using watershed environmental legislation to boost corn sales and win votes. Vehicle fuel provisions of its Clean Air Act reauthorization bill amount to pork barrel mischief that won't improve overall air quality.

The Senate had been on the right track. It rejected the Bush administration plan to mandate sales in highly polluted areas of alternative fuels and the vehicles that burn them. It instead set vehicle emission standards and proposed to let auto and fuel makers decide how to meet them. Then it veered off course with an amendment by Tom Daschle (D-S.D.) that sets gasoline specifications favoring ethanol, most of which comes from corn.

A BOOST FOR ETHANOL

The amendment requires that gasoline in nine heavily polluted cities--down from the 40 Daschle proposed--contain 2.7 wt % oxygen. For at least a few years, the mandate would strain supplies of methyl tertiary butyl ether (MTBE), an octane booster that can satisfy the oxygen mandate. Opportunities would open for blended ethanol, the only other widely available oxygenate now able to attain the 2.7 wt % standard. In fact, ethanol might replace some MTBE. Gasoline containing 10% ethanol receives a 6 cents/gal federal excise tax exemption and a 1 psi Rvp volatility credit. MTBE enjoys neither benefit, without which fuel ethanol would be uneconomic.

Mandated use of a heavily subsidized fuel additive might be warranted if it made environmental sense. But it does not. Fuel oxygenation addresses carbon monoxide pollution, a problem vehicle fleet modernization should eliminate in most places by the mid-1990s. Even in chronic CO problem areas, a 2.7 wt % standard is high. Denver, once the U.S. leader in CO pollution, has made great improvements by supplementing fleet turnover gains with wintertime fuel oxygenation mandates of no more than 2 wt %.

The Daschle amendment's excessive oxygen requirement, moreover, will impede progress in more critical pollution areas. Blended ethanol raises gasoline volatility by about 1 psi Rvp, the reason for its waiver. The result is a tradeoff between emissions of CO, a diminishing pollutant, and of ozone precursors, a more stubborn problem. Ethanol processed into gasoline as ethyl tertiary butyl ether (ETBE) can resolve the volatility problem at some sacrifice of octane. But ETBE also needs tax subsidies and an oxygen waiver.

Daschle sold his amendment with a demagoguery that should have made his colleagues suspicious. He accused the petroleum industry of resisting his gasoline recipe in order to maintain its ,.monopoly" on the fuel market. That's ridiculous. If the government insists on mandating fuels, the petroleum industry will manufacture and sell whatever is required, including ethanol blends, and make money doing so. It's a question of costs and gain.

RAISING COSTS

With its excessive oxygen standard, Daschle's gasoline recipe would force refiners into product characteristic tradeoffs detracting from air quality progress in areas more critical than CO. Ultimately, the petroleum monopolists of Daschle's fantasy would make the required adjustments, and motorists would pay the bill-through higher fuel prices, through tax subsidies, and through air quality compromises.

With or without the Daschle amendment, the costs of Clean Air Act reauthorization proposals are too great to ignore. The House has the issue now. Maybe its members will remind their Senate counterparts that the objective is to clean the air, not to buy farmers' votes with motorists' money.

Copyright 1990 Oil & Gas Journal. All Rights Reserved.