UPDATE - Calif. governor postpones ban on MTBE fuel additive
Date: 18-Mar-02
Country: USA
Author: Soo Youn
Davis said his decision delaying the ban on methyl tertiary butyl ether to Jan. 1, 2004 from Jan. 1, 2003 will also protect the nation's most populous state and biggest gasoline market from the sort of crippling energy crisis it faced last year.
MTBE and its alternative ethanol are two so-called oxygenates added to gasoline to make it burn cleaner. The federal 1990 Clean Air Act requires an oxygenate to be added to at least one quarter of the nation's gasoline supply.
"If I could snap my fingers and make MTBE go away tomorrow, I would," Davis said. "But we've seen this movie before and I am not going to allow Californians to be held hostage by another out-of-state energy cartel."
Davis, who made the announcement at the opening of a high-tech commercial center in the coastal Los Angeles suburb of Redondo Beach, said that without the extension, Californians could see $3 a gallon prices at the pumps next year.
The decision came after the General Accounting Office, the investigative arm of Congress, said earlier this month California residents could face higher gasoline prices and supply problems if the state has to rely on ethanol after dropping MTBE.
Davis added his decision was made in concert with Senators Diane Feinstein and Barbara Boxer, who are working on a compromise for the Senate energy bill. Feinstein's provisions would grant California a waiver from the oxygenate mandate since the state's strict environmental regulations are already tougher than federal standards.
The current draft of the Senate energy bill, authored by Majority Leader Tom Daschle, who represents a farm state, includes a mandate for ethanol use.
"This mandate forces Californians to use additives we do not need to meet Clean Air Act standards, and it creates major problems for our state," Feinstein said in a statement.
ETHANOL SUPPORTERS DISMAYED
But ethanol backers slammed the California delay, saying the growing production of ethanol will be enough for a smooth transition. Corn-based ethanol is produced mostly in the Midwest farm states.
"Governor Davis' about-face on the MTBE phase-out schedule is completely unjustified and places political expediency ahead of safe drinking water," said Bob Dinneen, the Renewable Fuels Association president.
California and at least a dozen other states, including New York, Connecticut and Maine, have decided to phase out MTBE. Water wells in California contaminated with the chemical have been shut down at a cost of millions of dollars.
MTBE proponents, who argue ethanol is difficult to send through pipelines because it is water soluble, cheered the governor's decision and said it would provide time to show the additive is safe.
"It's a great start," said Ryan Knoll, spokesman for the world's largest MTBE producer, Lyondell Chemical Co. .
But Davis also said the delay was necessary because of doubts over whether enough corn-based ethanol could be shipped to meet car-loving California's gasoline needs.
Davis added he would not take any chances that California, equivalent to the world's fifth-biggest economy, would experience an energy crisis like the electricity mess last year which brought days of rolling blackouts and cost billions of dollars.
"We will watch developments very carefully as we decide how to proceed with the transition to ethanol - including, if necessary, a review of this executive order next year," Davis said.
(additional reporting by Michael Kahn in San Francisco).
