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CLINTON-GORE ADMINISTRATION ACTS TO ELIMINATE MTBE, BOOST ETHANOL

Release Date: 03/20/2000
Contact Information:

FOR IMMEDIATE RELEASE CONTACT: 202 564-9828 or 260-2587, EPA
MARCH 20, 2000 202 720-4623, USDA

WASHINGTON, March 20, 2000 -- EPA Administrator Carol M. Browner and Agriculture Secretary Dan Glickman today announced actions by the Clinton-Gore Administration to significantly reduce or eliminate use of the fuel additive MTBE and boost the use of safe alternatives like ethanol. The Clinton-Gore Administration is taking these actions in order to protect drinking water, preserve clean-air benefits, and promote greater production and use of renewable fuels like ethanol.

Browner and Glickman released a legislative framework to encourage immediate Congressional action to reduce or eliminate MTBE and promote renewable fuels like ethanol. Browner also announced the beginning of regulatory action by EPA to eliminate MTBE in gasoline.

The legislative framework being sent to Congress includes the following three recommendations, which taken together as a single package, provide an environmentally sound and cost effective approach:

• First, Congress should amend the Clean Air Act to provide the authority to significantly reduce or eliminate the use of MTBE. This step is necessary to protect America's drinking water supplies.

• Second, as MTBE use is reduced or eliminated, Congress must ensure that air quality gains are not diminished. The Clinton-Gore Administration is deeply committed to providing Americans with clean air and clean water.

• Third, Congress should replace the existing oxygenate requirement in the Clean Air Act with a renewable fuel standard for all gasoline. By preserving and promoting continued growth in renewable fuels, particularly ethanol, this step will increase farm income, create jobs in rural America, improve our energy security, and help protect the environment.

"Threats posed by MTBE to water supplies in many areas of the country are a growing concern," Browner said. "Action by Congress is the fastest and best way to address this problem. We need to begin now to eliminate MTBE from gasoline and move to safer alternatives, like ethanol because Americans deserve both clean air and clean water -- and never one at the expense of the other."

"These principles provide a strong, unified framework for promoting the continued growth of renewable fuels like ethanol," said Glickman. "Ethanol will play an important role in ensuring that we maintain the air quality gains we have achieved to date, and the renewable fuels standard will encourage substantial new growth in the use of ethanol and other renewable fuels across the country. That's good news for our farmers, for our energy security, and for the environment."

In addition to the legislative framework, Browner also announced that EPA today formally began regulatory action to eliminate or phase down MTBE, issuing an Advance Notice of Proposed Rulemaking under Section 6 of the Toxic Substances Control Act.

"To ensure that our water supplies will be protected, I am also directing EPA to take an additional insurance policy by starting a regulatory process aimed at phasing out MTBE," Browner added. “However, this action can require time to complete; that is why it is in the best interest of the American people for Congress to take quick action now.”

Section 6 of the Toxic Substances Control Act gives EPA authority to ban, phase out, limit or control the manufacture of any chemical substance deemed to pose an unreasonable risk to the public or the environment. EPA expects to issue a full proposal to ban or phase down MTBE within six months, after which more time is required by the law for analysis and public comment before a final action can be taken.

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Today I am here to deliver a very simple but important message: It is imperative that we significantly reduce or eliminate the fuel additive MTBE from gasoline and boost the use of safe alternatives like ethanol in order to protect U.S. water supplies and to preserve air quality benefits.

Today, we are moving on two fronts to ensure that MTBE is significantly reduced or eliminated from gasoline:

First, the Clinton/Gore Administration is providing Congress with a legislative framework, which, if fully adopted, will significantly reduce or eliminate MTBE while preserving clean-air benefits by ensuring the use and growth of ethanol and other safe renewables in fuels.

Second, as a backstop measure, today we are announcing that EPA is beginning regulatory action aimed at eliminating MTBE from gasoline. Under Section 6 of the Toxic Substances Control Act, we are taking the first step by issuing what is called an Advance Notice of Proposed Rulemaking to ban MTBE from gasoline. This action is the best tool legally available for eliminating the use of MTBE.

The principles for legislative action that we are sending to Congress must be viewed and accepted as a single package and will provide an environmentally sound and cost effective approach to dealing with this issue:

First, we are calling on Congress to amend the Clean Air Act to significantly reduce or eliminate the use of MTBE in gasoline, in order to protect drinking water.

Second, we are calling on Congress to strengthen the Clean Air Act to guarantee that clean air benefits are preserved.

And finally, we are calling on Congress to remove the requirement from the Clean Air Act that has led to a three-fold increase in the use of MTBE, while, at the same time, taking the unprecedented step of providing content levels for ethanol and other safe biofuels in gasoline.

These principles will ensure that the MTBE problem is addressed as soon as possible. . . that our commitment to cleaner air is preserved . . .that America's waters are protected . . .and that we continue to create important opportunities for renewable fuels in our nation’s energy supply.

Legislative action is our first priority and the best way for America to address the MTBE problem.

As I noted, however, we also are taking out an additional insurance policy today. We are backing up our request for timely legislation with the first step in a regulatory action under the Toxic Substances Control Act.

That Act gives EPA authority to ban, phase out, limit or control the manufacture of any chemical substance deemed to pose an unreasonable risk to the public or the environment. But the procedural burdens required by the Act can be weighty and time consuming. That is why we still are requesting that Congress act immediately to significantly reduce or eliminate MTBE in gasoline. Legislative action is the first and best line of defense. We look forward to working with the Congress to achieve that critical legislative goal.

The use of MTBE in gasoline in the U.S. has increased three-fold primarily in the last decade. Because of growing environmental concerns, I convened a Blue Ribbon Panel in 1998 which concluded that MTBE did, in fact, pose unique threats to water supplies. As a result, last summer we first called on Congress to phase out the use of MTBE in gasoline. Today, we are
taking the next steps.

EPA continues to work with those cities and states that need help cleaning up existing problems. Remediation will be challenging, but essential. And we are working to develop and promote new cleanup technologies. We also are strengthening our efforts to make storage tanks more secure.

MTBE is a problem that must be addressed. If we delay too long, the problem will become worse. The time has come to take action. Americans deserve both clean air and clean water and never one at the expense of the other.

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Oxygenates in Gasoline
Congress required, in the Clean Air Act of 1990, that areas of the country with the worst ozone smog problems use reformulated gasoline (RFG) with an increased oxygen content of 2%. Seventeen states and the District of Columbia presently use reformulated gasoline (RFG), either because of the Congressional mandate, or because some areas have voluntarily chosen to use RFG to help achieve their clean air goals. Methyl tertiary-butyl ether (MTBE) is the oxygen additive most commonly used by the petroleum industry to satisfy the RFG mandate. MTBE is used in approximately 87% of RFG, with ethanol being the second most commonly used additive. Of those areas listed below, only Milwaukee and Chicago use RFG that is primarily ethanol.

Areas Required to Use RFG

Areas That Have Voluntarily Chosen to Use RFG

Los Angeles, CA San Diego, CA Hartford, CT New York City (NY-CT-NJ) Greater Philadelphia (PA-NJ-DE-MD) Chicago (IL-WI-IN) Baltimore, MD Houston, TX Milwaukee, WI Sacramento, CA

The State of Connecticut (that portion not part of NYC) The State of Delaware (that portion not part of Phil.) The District of Columbia Kentucky portion of Cincinnati Metro Area Louisville, KY Maryland - DC suburbs and two other nearby counties The State of Massachusetts St. Louis, MO New Hampshire Portion of Greater Boston The State of New Jersey (that portion not part of NYC and Phil.) New York counties near NYC The State of Rhode Island Texas - Dallas-Fort Worth area Virginia - DC suburbs, Richmond, Norfolk-Virginia Beach-Newport News

Since the late 1970s, MTBE also has been used by the petroleum industry in much smaller amounts as an octane enhancer to replace lead. Approximately 4.5 billion gallons of MTBE are used each year in gasoline (275,000 barrels per day out of a total of 8.2 million barrels/day of gasoline), an increase of more than 3 times since Congress’s 1990 mandate.

MTBE in Water
Since MTBE is very soluble in water and does not “cling” to soil well, it has a tendency to migrate much more quickly into water than other components of gasoline. Recent testing by the United States Geological Survey show detections of MTBE in approximately 20% of the ground water in RFG areas, while there is only a 2% detection rate in non-RFG areas. Most of these detections are below the levels of public health concern and are within the range EPA has set for a taste and odor water advisory for MTBE at 20 to 40 parts per billion. Small individual fuel spills (more than 9 million gallons of gasoline each year) and storm water runoff contribute to low level detections of MTBE in water supplies. MTBE detections at higher concentrations usually result from leaking underground or aboveground fuel storage tanks and pipelines. Even though significant air quality gains have been made using RFG, these air benefits can be maintained without using MTBE and without endangering the nation’s water resources.

MTBE – Call to Action
In response to the growing concerns regarding MTBE in water, EPA Administrator Browner appointed an independent Blue Ribbon Panel of experts to investigate the use of oxygen additives in gasoline. The Panel called for significant reduction in the use of MTBE in gasoline and recommended that Congress and EPA take action to lift the oxygen mandate and clean up MTBE contamination. EPA fully supports the Panel recommendations and is taking steps to strengthen its underground storage tank, safe drinking water, remediation, and research programs. Upon release of the Panel’s report in September 1999, EPA immediately began working with and encouraging Congress to pass legislation that responded to the Panel’s recommendations. To date, legislation that would solve this problem has not moved forward. EPA is now providing Congress with a framework for legislation that will give EPA the authority to significantly reduce or eliminate MTBE. EPA is also taking action to control MTBE under the Toxic Substances Control Act (TSCA) as a backup to the needed Congressional action. A TSCA rulemaking is procedurally burdensome and may take several years to complete.

Ethanol Use Will Expand

Current annual ethanol production is about 1.5 billion gallons. Of this total, about 30 percent is used in RFG during the summer in Federally designated non-attainment areas. About 20 percent of ethanol production is used in the winter oxygenate program in Federally designated areas where carbon monoxide is a problem. The remaining 50 percent of production is used in conventional gasoline markets around the United States to enhance octane and extend fuel supplies.

With today’s announcement by Secretary Glickman and Administrator Browner, ethanol use is expected to continue to grow. Provided air quality gains achieved to date are not reduced, ethanol will continue to be used very much as it is used today. In areas of the country where it is heavily used, ethanol will continue to be favored based on its price, availability and environmental benefits. Other areas may also find ethanol to be an economic way to maintain air quality benefits that had been achieved with the use of MTBE. Without the renewable fuels standard, some petroleum-based substitutes for ethanol may emerge over time. The proposed renewable fuels standard would ensure that the current market for ethanol would be maintained and expand over time.

The renewable fuels standard will be met through the use of fuels made from a variety of renewable feedstocks. While most ethanol now is made from corn, other crops, such as wheat and sorghum, have and could also be used. In addition, new conversion technologies now in development are expected to be available in the future for efficient conversion of cellulosic material to ethanol. These technologies would make possible the broader use of a wide array of renewable feedstocks, including agricultural waste and residue, such as corn stalks, and dedicated crops, such as switchgrass.

The President has set a goal to triple U.S. use of biobased products and bioenergy by 2010. The Administration’s FY 2001 budget proposes an increase of $96 million (56 percent) to support biobased products and bioenergy research and development, demonstration and commercialization, and outreach and education activities. The President also directed USDA’s Commodity Credit Corporation to provide up to $100 million in FY 2000 and up to $150 million in 2001 and 2002 in incentive payments to ethanol and other bioenergy producers to expand production of biobased fuels. Payments will be made on a portion of the increase in agricultural commodities purchased for expanded bioenergy production, with smaller and cooperatively-owned facilities receiving higher payment rates. ____________________________________________________________________

The Federal Reformulated Gasoline Program (RFG) established in the Clean Air Act Amendments of 1990 has provided substantial reductions in the emissions of a number of air pollutants from motor vehicles, most notably volatile organic compounds and nitrogen oxides (precursors of ozone), carbon monoxide, and air toxics (benzene, 1,3-butadiene, and others). In most cases these reductions have exceeded those required by law.

However, the use of methyl tertiary butyl ether (“MTBE”) in our nation’s fuel supply has created a significant and unacceptable risk to drinking water and ground water resources. As a result of these concerns, last year EPA commissioned a Blue Ribbon Panel on MTBE and Oxygenates in Gasoline (the “Panel”). On July 27, 1999 the Panel issued recommendations on ways to maintain air quality while protecting water quality from the risks associated with MTBE. Significantly, the Panel called for a substantial reduction in the use of MTBE as well as action by Congress to remove the current 2% oxygenate requirement from the Clean Air Act. EPA endorsed the Panel’s recommendations and committed to work with Congress to make targeted amendments to the Clean Air Act.

In the months since the Panel issued its recommendations, detections of MTBE in water supplies have grown and Congress has not yet acted to address this issue. It is of increasing importance to enact legislation that addresses this problem in an environmentally sound and cost-effective way. Such legislation should provide authority to phase out MTBE while avoiding gasoline supply shortages and ensuring price stability.

The following legislative principles, taken together as a single package, are designed to maintain air quality and enhance water quality protection while preserving the significant role of renewable fuels, most importantly ethanol. In addition, it is the Administration’s intention that the resulting legislation provide sufficient flexibility with respect to both time and range of technological choices so as to allow for continued adequate supplies of gasoline at reasonable prices for consumers.

Recommendation #1: Amend the Clean Air Act to provide the authority to significantly reduce or eliminate the use of MTBE.

The rising number of MTBE detections in ground and surface water in some areas of the nation have increased the urgency for preventing further MTBE contamination. In some cases, communities have been forced to abandon their drinking water supply. To effectively address this growing problem, the Administration recommends that Congress amend the Clean Air Act to provide the authority to significantly reduce or eliminate the use of MTBE.

Recommendation #2: As MTBE use is reduced or eliminated, ensure that air quality gains are not diminished.

The clean burning Reformulated Gasoline Program has helped bring clean air to cities across the nation. In many cases, Americans have enjoyed air quality improvements that have exceeded expectations. The Administration recommends that as Congress significantly reduces or eliminates MTBE, it institute measures that maintain our air quality gains.

Recommendation #3: Replace the existing oxygen requirement contained in the Clean Air Act with a renewable fuel standard for all gasoline.

Reducing or eliminating MTBE in no way diminishes the continued need for other oxygenates, such as ethanol, to control mobile source emissions. In addition, a significant role for renewable fuels is important to our nation’s energy supply (see, EO 13134 in which President Clinton sets a goal of tripling the use of renewable bio-energy by 2010). Thus, the Administration recommends that Congress replace the 2% oxygenate requirement in the Clean Air Act with a renewable fuel annual average content for all gasoline at a level that maintains the current level of renewable fuel (1.2% of the gasoline supply) and allows for sustained growth over the next decade.

Congressional action on these recommendations is essential if we are to continue to achieve the clean air public health benefits of cleaner burning gasoline while avoiding unacceptable risks to our nation’s water supplies. The Administration urges Congress to address this request for legislation as quickly as possible. We remain committed to working with Congress to provide a targeted legislative solution to this matter.