Posted: 2/26/2006 11:21:21 AM EDT
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/02/16/BAG04H9IQG1.DTL After nearly a decade of complaints and lawsuits from California political leaders and environmental groups, the U.S. Environmental Protection Agency on Wednesday revoked a long-standing mandate that oil refiners put additives like ethanol into their clean-burning gasoline.
"This is great news for California,'' said San Francisco Democrat Sen. Dianne Feinstein, who has led the battle with the EPA in trying to get rid of the requirement in California. "The announcement means that California refiners will finally be allowed to make gasoline that is cleaner burning than what they're making today."
Refiners and their representatives said Wednesday that they don't yet know how much they will reduce the use of ethanol, but state air-quality officials would like to see a reduction and have long argued that the use of ethanol as a gas additive during the summer can contribute to ozone levels.
The passage of the federal Energy Policy Act of 2005 removed the requirement, and the new regulations released Wednesday by the EPA put in place the program to remove the additive requirement. The decision will go into effect in California 60 days after they are published in the Federal Register this summer.
Since 1999, the state has opposed a mandatory use of an oxygen-boosting additive, saying that refiners could meet state standards for reformulated gas without an additive. By then, they knew that the MTBE used by refiners was a foul-tasting ether that leaked from underground tanks and contaminated drinking water and other water supplies in California and all over the country.
The state appealed to the EPA to issue a waiver to the requirement, arguing in high-level letters from Feinstein, two governors and the state Air Resources Board and, later, in lawsuits. The EPA was firm in its insistence to keep the mandate.
California was among the first states to ban MTBE in 2004 under an order by Gov. Gray Davis. Since then, about two dozen states have banned MTBE, a petroleum refining byproduct.
In releasing the new regulations on Wednesday, EPA officials referred to the former requirements as "burdensome.''
"Yes, they were burdensome,'' said John Millett, an EPA spokesman in Washington. "What was unforeseen was the banning of MTBE in some states because it was getting into groundwater. After MTBE was off the table, it was burdensome for states like California and New York that didn't have a strong ethanol base to meet the requirements.''
Luke Tonachel, a fuels analyst with the Natural Resources Defense Council, said his group has supported California's request for a waiver because of the clean-air benefits.
"Ethanol, when used in small quantities as an additive in gasoline, can cause air-quality problems especially in urban areas that already have severe ozone problems," he said. "It's particularly problematic in areas like the South Coast.''
In the summer, a phenomenon called "permeation'' occurs when hydrocarbons from the ethanol-laced gasoline migrate through the flexible hoses and connectors in a car's fuel system as well as from the gas tank, he said.
In 2005, California refiners used an estimated 900 million gallons of ethanol and blended it at 5.7 percent of the volume into clean-burning gas.
While refiners can opt out of using ethanol in reformulated gasoline, they must meet another part of the Energy Policy Act, called the Renewable Fuel Standards, which requires refiners over time to increase the use of ethanol. In 2006, they must use 4 billion gallons nationwide.
Stephanie Price, spokeswoman at Chevron Corp. in San Ramon, said with the change in the regulations, refineries now will have the flexibility to determine how much ethanol to use and in which parts of the country to use it. Refiners can also use bio-diesel and other renewable fuels to meet the standard, she said.
Catherine Reheis-Boyd, chief operating officer of Western States Petroleum Association, an industry group, said the corporations have invested millions of dollars into new infrastructure at distribution centers to deliver ethanol-added gasoline.
When refiners make business decisions in the future on how to change their reformulated gas formula, she said, "they'll have to take into account the investments that have already made during the time California couldn't get a waiver.
"It's not that ethanol won't be used. But the new regulations allow the flexibility to deal with the availability problems,'' she said.
The California Energy Commission conducted an ethanol-market outlook in November, and found that the oil refiners like ethanol because it extended the gasoline supply.
"The infrastructure is in place now, and for the time being they're going to continue using it,'' said commission spokesman Rob Schlichting.
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So let's see: -Crappy fuel additive -Causes more pollution over regular gasoline -Ethanol blends lower mpg over straight gas use -Ethanol production receives huge subsidies -GWB's new ethanol mandates produce an artifiical spike in demand, raising prices on ethanol and prices on blended gasoline. But hey, as long as we're funneling money to the corn growers and ADM, who cares how the taxpayers and consumers get screwed?
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