• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Ethanol Mandate for Gas Dropped

Posted on: Thursday, 16 February 2006, 09:00 CST

By Paul Rogers, San Jose Mercury News, Calif.

Feb. 16--California will no longer be required to put ethanol in its gasoline, the U.S. Environmental Protection Agency announced Wednesday, ending a decadelong battle over an additive that state leaders of both political parties said wasn't needed and had fought for years to remove.

The EPA's announcement resulted from the new national energy bill approved by Congress and signed by President Bush in August. The bill repealed federal rules that had required chemicals called oxygenates to be put in gasoline in areas that don't meet federal smog standards.

Ethanol, made from corn, is one such oxygenate. Another is MTBE, a chemical additive that was used in California but was banned statewide in 2004 because it created a huge water pollution problem.

Studies cited

The intent of the original federal rule was to help gasoline burn more cleanly. But critics -- including former Gov. Gray Davis, a Democrat, and Gov. Arnold Schwarzenegger, a Republican, along with leaders from New England states -- argued that numerous scientific studies show that gasoline could be made to burn as cleanly without ethanol as with it.

And because corn isn't grown in their states, ethanol had to be shipped thousands of miles on rail cars from Iowa and other Midwestern states, increasing costs for motorists, they contended.

Under a compromise in last summer's energy bill, the oxygenate mandate was dropped, except for a few areas, such as Los Angeles, where carbon monoxide levels in smog are high. Instead, the new law requires an increase in the use of plant-based fuels such as ethanol and biodiesel to 7.5 billion gallons by 2012. Oil companies can decide where and how they want to meet those rules.

California leaders cheered the new EPA rule. Some even noted that some studies show ethanol increased air pollution because of its high evaporation rate during hot days.

"The federal requirement has forced California's refiners to use an oxygenate even though they can make cleaner-burning gasoline without MTBE or ethanol," Sen. Dianne Feinstein, D-Calif., said in a statement. "The announcement means that California refiners will finally be allowed to make gasoline that is cleaner-burning than what they are making today."

No price changes

Oxygenate additives such as MTBE and ethanol increase the price of gasoline by 4 to 8 cents a gallon, the EPA estimates. But energy experts said they did not expect any immediate changes for motorists in California in price or availability of gasoline.

Rob Schlichting, a spokesman for the California Energy Commission in Sacramento, said his agency surveyed the state's refiners last fall and found that none planned to reduce or increase ethanol use in California gas in 2006 even though they knew the mandate for its use was going to be eliminated.

The reason: Ethanol makes up 5.7 percent of gasoline in California by volume now, and if it were eliminated, the companies would have to produce that much more gasoline to make up the difference, potentially causing shortages. Also, the companies have contracts that have not yet expired with ethanol producers, and they only recently spent millions of dollars retooling their distribution systems to blend it with gasoline.

California used 900 million gallons of ethanol in 2005, and produced only about 4 million, the commission's survey found.

"I never saw the need for the mandate for ethanol," said Frank Wolak, a Stanford University economics professor who specializes in energy issues. "It was more of a handout for Midwestern corn producers."

Supporters of ethanol say it reduces the need for imported oil. Wolak noted that new sources for making ethanol, such as wood waste, do not require fertilizer or harvesting like corn, and may be more energy-efficient overall.

"We should set the standards for cleaner-burning gasoline, and let refiners use the best technology to do that," Wolak added. "That will help keep prices lower."

Contact Paul Rogers at progers@mercurynews.com or (408) 920-5045.

-----

Copyright (c) 2006, San Jose Mercury News, Calif.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: San Jose Mercury News

More News in this Category