Volume 148, No. 77 covering the 2nd Session of the 107th Congress (2001 - 2002) was published by the Congressional Record.
The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“SOLUTION TO MTBE PROBLEM” mentioning the Environmental Protection Agency was published in the Senate section on pages S5443-S5446 on June 12, 2002.
The publication is reproduced in full below:
SOLUTION TO MTBE PROBLEM
Mr. SMITH of New Hampshire. Mr. President, by now, most everyone in the Nation has heard of the problems caused by MTBE (methyl tertiary butyl ether). I am very pleased that S. 950, the Federal Reformulated Fuels Act of 2002, reported by the Senate Committee on Environment and Public Works, has largely been incorporated into the Senate energy bill, S. 517, passed by the Senate on April 25, 2002. I would like to thank all those who worked with me to negotiate this comprehensive solution to the MTBE problem.
The legislative package provides Federal funding for cleanup of existing contamination and for prevention of future releases of MTBE, while preserving the environment and protecting the country from gasoline price spikes and fuel shortages. I would like to engage in a brief colloquy with the chairman of the committee so that we can provide an overview of the problems caused by MTBE and how this legislation solves these problems.
The problem that initially motivated the committee and the Senate to act on S. 950 and this issue in general is the existing MTBE contamination of water resources. Leaking underground storage tanks
(USTs) are the major source of MTBE releases. Section 832 of this legislation authorizes $200 million from the Leaking Underground Storage Tank (LUST) Trust Fund for States to use for MTBE remediation. For this limited allocation of funds, the legislation waives the LUST requirement that the contamination be linked to an UST. Once in the environment, MTBE separates from other gasoline components and can quickly move far away from the source. Since MTBE contamination is difficult to trace, it is nearly impossible to establish a link between the contamination and a LUST.
In addition to cleaning up existing contamination, we must prevent future leaks from USTs because MTBE, in volumes much lower than current levels found in reformulated gasoline (RFG), may remain in gasoline for up to four years of enactment of this bill. To prevent future leaks, Section 832 of this legislation authorizes an additional $200 million from the LUST Trust Fund for States to use for activities to enforce existing UST regulations.
There is still more to learn about remediation of MTBE. Section 832 of this legislation authorizes $2 million for conducting bedrock bioremediation research and establishing an information clearinghouse. These authorized funds are intended to go to the Bedrock Bioremediation Center (BBC) at the University of New Hampshire. Currently, the BBC conducts research on bioremediation of various contaminants in fractured bedrock. This additional funding will allow the BBC to learn ways of cleaning up MTBE contamination in fractured bedrock and establish an information clearinghouse so that the newly developed remediation techniques may be shared across the nation. Once MTBE enters fractured bedrock, it is nearly impossible to remediate and equally as difficult to track. MTBE may contaminate wells that are many miles away from the original source. In simple terms, we can't get it out of bedrock and we can't tell where it will cause problems.
Mr. JEFFORDS. As the Senator from New Hampshire, the ranking member on the Environment and Public Works Committee, has pointed out, the committee acted to address existing contamination and to prevent future contamination. There are many sources of MTBE releases, including leaking underground storage tanks, motor vehicle accidents, fuel overfills, backyard mechanics and many more. With the numerous potential sources, the only way to ensure prevention of future contamination is to get MTBE out of gasoline. This legislation contains several provisions that work together to provide for quick reduction and eventual elimination of MTBE use in gasoline.
Section 834 eliminates the oxygen content requirement in Sections 211(k)(2) and 211(k)(3)(A) of the Clean Air Act. These provisions require RFG to contain two percent oxygen by weight. To satisfy this mandate, refiners must blend either fourteen percent MTBE or 5 percent ethanol into RFG. Elimination of the oxygen mandate will allow for a phase-down of the use of MTBE in RFG without requiring the use of ethanol in every gallon of RFG in certain non-attainment areas. But, RFG will still be required to meet all other statutory and regulatory requirements.
The elimination of the oxygen requirement also will allow refiners supplying RFG to the Northeast and many other States to use considerably less MTBE in RFG prior to the beginning of the phase out. MTBE is currently 3 percent of the national gasoline supply. Most of this is used in RFG areas, where MTBE volume in RFG is up to 15 percent.
The oxygen requirement is eliminated effective 270 days after enactment in order to provide time for EPA to put in place the anti-
backsliding provisions included under Section 834 of this legislation.
Mr. SMITH of New Hampshire. In addition to elimination of the oxygen mandate, as the Senator from Vermont has indicated, this legislation requires EPA to make a determination about the adequacy of any pending RFG petition to waive the oxygen content requirements of section 211(k)(2)(B) for RFG. If EPA fails to act in the required time, the petition shall be deemed approved. Although this includes an opt-out or other request, EPA's failure to act results in automatic approval of the petition only to the extent that the oxygen content requirement for RFG would be waived. No other RFG requirements are affected. This provision only applies to petitions pending at the time of enactment of this provision.
The State of New Hampshire submitted to EPA a request to opt-out of the RFG program and set state fuel standards that are identical to the Federal RFG specifications, excluding the oxygen mandate. The EPA is instructed to interpret the New Hampshire RFG opt-out request as a request to eliminate the oxygen mandate. If the request is deemed adequate, either by EPA or by statute, the RFG sold and used in New Hampshire will not be required to adhere to the oxygen content requirement, effective immediately upon the adequacy determination.
The removal of the oxygenate requirement alone, however, is not enough to ensure the removal of MTBE from gasoline. Therefore, Section 833 of this legislation contains a provision that prohibits the blending of MTBE in gasoline within 4 years of enactment. The 4-year period is intended to allow fuel refiners to phase out the use of MTBE on a schedule that will not cause gasoline shortages or price spikes. The absence of a mandatory statutory phase down schedule is intended to give maximum flexibility to fuel refiners as they proceed to an MTBE-
free gasoline supply.
The reference to use of MTBE in new section 211(c)(5)(A) of the Clean Air Act is meant to cover use by all persons. It includes all persons in the motor vehicle fuel production and distribution system, as well as ultimate consumer of the fuel and producers of MTBE. EPA's regulation may include appropriate provisions to implement this prohibition.
The findings listed in this section are intended to clarify that the elimination of the use of MTBE is intended to protect water quality. It is important to note that health concerns are not the main cause for Congressional action, based on information to date.
There is an allowance for de minimus amounts of MTBE to be present in gasoline because MTBE is sometimes produced in trace amounts during the gasoline production process. The Administrator will make a determination on what level is appropriate, but the legislation provides that it can be no more than .5 percent by volume.
Another provision gives States the authority to allow the use of MTBE in gasoline for sale and use within such State's borders. This provision is intended to allow a State to use MTBE should the State determine that other problems, such as increased air pollution, price spikes, or fuel supply shortages, outweigh any adverse impact MTBE may have on water quality. The regulations implementing this provision could allow production and distribution in other States for intended ultimate use in the notifying State, with appropriate safeguards to ensure that the fuel containing MTBE ultimately is only sold or used in the notifying State. Such rules, however, should not authorize production or use in a state that has banned MTBE and does not want it stored or handled there for fear of water supply contamination.
Section 833(d) is intended to hold harmless any legal recourse that the States may have during the on-going litigation over the efforts to impose or defend state MTBE bans or other legitimate actions to control or prohibit MTBE use or production.
Mr. JEFFORDS. The Senator has stated the essential point of this legislation and these provisions in the energy bill, that is the elimination of MTBE to protect water supplies. Its removal from the gasoline supply could encourage the replacement of fuel volumes with more toxic components, so section 834 of this legislation requires EPA to ensure maintenance of the toxics reduction over-compliance already achieved in RFG areas. EPA may comply with this requirement by amending the existing Mobile Source Air Toxics (MSAT) rule by updating the individual refinery RFG baselines from 1998-2000 to 1999-2000, and whatever other appropriate changes are necessary. We are advised by the Agency that any such changes should be minimal.
The MSAT rule currently makes a distinction between baseline volume, the average volume produced during the years 1998-2000, and incremental volume, or additional volume above baseline volume. These categories are treated differently under the rule and under this legislation. Under the rule, baseline volumes must adhere to new toxic reduction standards based on actual survey data from 1998-2000 and incremental volumes are held to the statutory or regulatory reduction, whichever apply. Under this legislation, the baseline volumes must adhere to the updated toxic reduction standard based on actual survey data from 1999-
2000. Incremental volumes are treated the same as under the rule unless the actual toxics levels in any PADD exceed the average 1999-2000 levels. If there is an exceedance, EPA must revise the existing regulation to require incremental volumes of RFG, in addition to baseline volumes, to adhere to the updated individual refinery baselines.
The RFG program set statutory content and performance requirements. Through regulatory authority provided by the Clean Air Act, EPA chose, in 1993, to adopt performance standards for toxic air pollutants and volatile organic compounds (VOCs) rather than the prescriptive fuels formula allowed under Section 211(k)(3)(A). These performance standards required a 15 percent reduction in toxic air pollutants from baseline fuel starting in 1995 and maintained through 1999, and required a 21.5 percent reduction from baseline fuel beginning in 2000, as part of Phase II.
Motor vehicle emissions of toxics have been drastically reduced in RFG areas, though they are still a very substantial portion of the air toxics inventory in many areas. Over-compliance with the toxics reduction goals in the Clean Air Act has been largely due to the dilution effect of the oxygenates MTBE and ethanol, relatively toxic-
free additives. RFG survey data suggest that refiners have achieved a 27 percent or higher reduction in toxic air pollutants from the 1990 baseline.
On March 29, 2001, EPA released a final strategy to further reduce air toxics emissions from motor fuels in an effort to comply with its responsibility under Section 202(l) of the Act. The strategy identified 21 mobile source air toxics (MSATs). It is intended to ensure that refiners continue over-compliance with RFG and anti-dumping requirements by maintaining their average 1998-2000 toxic emissions performance levels for baseline volumes of RFG and conventional gasoline. For incremental volumes, refiners must adhere to the regulatory standard of a 21.5 percent reduction. The MSAT rule is intended to ensure that toxics over-compliance is maintained regardless of whether any oxygenates are used. The MSAT rule commits EPA to revisiting additional fuel and vehicle MSATs controls in a 2004 rulemaking.
Section 834(b) supplements the air toxics provisions for RFG. Congress recognizes that EPA recently adopted regulations at 40 CFR part 80 Subpart J regarding air toxics performance of gasoline, including provisions for RFG. Congress intends that the regulations recently adopted by EPA are adequate to implement new section 211(k)(1)(B)(ii) and (iii), with the exception of the change in baseline year from 1998-2000 to 1999-2000 and any resulting baseline changes that may necessitate. The provisions in the current regulations for setting baselines, baseline adjustments, deficit carry-over, and the like should still all be appropriate under this new provision. While new baseline adjustments would not be allowed based solely on the new provision, prior baseline adjustments would not be affected, except as called for with the change in the baseline years. For example, the existence of a federal ban on MTBE would not automatically change any previously granted adjustments, and would not provide grounds for any new adjustments.
I would note that there is not wholehearted support for the MSAT rule at 40 CFR part 80 subpart J in Congress or in the States. The Northeast States for Coordinated Air Use Management has filed suit against the Agency claiming that this rule is inadequate to protect public health in the Northeast and inconsistent with the requirements in section 202(l) of the Clean Air Act. So, we have included a savings clause to be very clear that Congress has not blessed this rule through the inclusion of these anti-backsliding provisions.
Mr. SMITH of New Hampshire. Mr. President, the existing RFG regulations set separate standards for fuel sold in Northern and Southern RFG areas. Section 839 of the legislation we are discussing requires EPA to revise existing RFG regulations to apply the stricter Southern requirements in all RFG areas nationwide. This will provide the Northern RFG States, including New Hampshire, with less-polluting Southern RFG. In addition, this provision will help to reduce the number of boutique fuels. This provision does not alter the Administrator's current ability to make volatile organic compound (VOC) adjustments for ethanol blends of RFG, like the existing adjustment given to Chicago and Milwaukee.
Mr. JEFFORDS. Because of that change and the other congressional actions on MTBE and renewable fuels, there are likely to be significant changes in the Nation's gasoline characteristics. Section 836 of this legislation requires EPA to study and report on the changes in emissions of air pollutants and changes in overall air quality due to the use of fuels and fuel additives resulting from this bill. This report will provide information to evaluate the success of the provisions of this legislation and should help identify problems that can be solved by statute or regulation before they are serious.
Section 211(c) of the CAA provides the Administrator with regulatory authority over fuels or fuel additives, if, in the judgment of the Administrator, the fuels or fuel additives or emission products cause or contribute to air pollution that may reasonably be anticipated to endanger the public health or welfare. This legislation adds authority to protect water quality, in addition to air quality. The bill requires the Administrator to exercise this regulatory authority to prohibit the use of MTBE. The bill also adds water quality as an environmental protection criterion in Title II of the act.
Mr. SMITH of New Hampshire. To address the inflexibility of the opt-
in process for states that desire to use RFG to reduce emissions, section 837 of the Energy bill allows Governors of States within the Ozone Transport Region (OTR), to opt in any area to the RFG program. EPA must approve the request unless there is insufficient capacity to supply RFG to the area. Currently, only ozone nonattainment areas are allowed to opt in to the program. This legislation expands the program to include all areas within the OTR States. This will give those states, including New Hampshire, the opportunity to have one clean, MTBE-free RFG statewide. This provision is intended to provide cleaner fuel, address the boutique fuel problem, and help states achieve attainment.
The section addresses both the commencement and termination of the RFG requirements in areas in the OTR that opt-in to RFG under that provision. The provision on termination of the RFG program in these opt-in areas is not intended to change or modify in any way EPA's authority to adopt reasonable opt-out provisions under either section 211(k)(6)(A) or (B).
This section includes a provision that allows a temporary delay of the effective date of these requirements if there is insufficient capacity to supply gasoline to a State that chooses to opt in new areas to the RFG program. If EPA, in consultation with the Department of Energy, determines that expansion of the RFG program would result in insufficient supply of gasoline in the State, the effective date of the new opt-in areas may be delayed for a period of up to one year with the possibility of two more periods of up to one year each.
Mr. JEFFORDS. Section 838 of the legislation allows States to ask EPA to enforce any state-imposed fuel specifications that have been approved under processes established under Section 110 or Section 211(c)(4)(C) of the Clean Air Act. Effective and consistent enforcement of State and federal environmental laws is very important. States currently have very limited budgets for enforcement activities. To ensure full, faithful, and consistent enforcement of the state laws, this provision provides the ability for States to access additional federal resources for enforcement of state fuel specifications, once approved by EPA through the existing processes.
The section directs EPA to enforce certain state fuel controls or prohibitions in the same manner as if EPA had adopted the control or prohibition under section 211. This new provision is not intended to change in any way the requirements for approval of a State fuel control or prohibition in a SIP, including the requirement that it be enforceable by the state. It is also not intended to limit EPA's enforcement discretion. EPA would have the same discretion in enforcement matters with respect to these state fuel controls or prohibition as it would with a federal fuel control or prohibition adopted under section 211.
Mr. SMITH of New Hampshire. To avert air quality problems that might arise through increased use of ethanol, pursuant to the renewable fuels requirements, section 819(c) of the legislation allows States to eliminate the RVP waiver for gasohol if such waiver will increase air pollution in any area within the State. If a state determines the waiver will cause air quality problems, the State may submit notification, accompanied by supporting documentation, to EPA indicating that the stricter RVP limit must be applied to gasohol within the state. This provision will help new ethanol using states to control evaporative air pollution emissions from gasohol.
This section includes a provision that establishes a temporary delay of the effective date of these requirements if there is insufficient capacity to supply gasoline to a State that chooses to eliminate the ethanol RVP waiver. If EPA, after consultation with the Department of Energy, determines that elimination of such waiver would result in an insufficient supply of gasoline in the State, refiners may be allowed to retain the ethanol RVP waiver for a period of up to 1 year with the possibility of two more periods of up to 1 year each.
Mr. JEFFORDS. In order to prevent future problems similar to the MTBE debacle, Congress is expanding EPA's existing authority to regulate fuel additives. The current provisions of the Clean Air Act provide a process for EPA and authorized States to regulate fuels and additives in order to protect air quality. This legislation amends that process by allowing fuel and additive regulation in order to protect water quality, as well. If this authority already existed, EPA and the State of California might have been able to address the MTBE problem before it became acute without Congressional action.
There is also an additional prophylactic provision that requires EPA to study the health, air quality, and water quality effects of fuel additives and blend stocks that may be used as replacements for MTBE. The bill specifically lists ETBE, TAME, DIPE, TBA, ethanol, iso-octane, and alkylates as additives to be studied.
The existing law allows the Administrator to require fuel producers to conduct tests to determine the health and environmental effects of fuels and fuel additives. This provision mandates that the Administrator regularly require fuel and fuel additive manufacturers to conduct testing and supply information on the effects of those substances on public and environmental health.
Congress intends that the Administrator should use this authority to identify and assess any adverse public health, welfare, or environmental effects from the use of motor vehicle fuels or fuel additives or the combustion products of such fuels or fuel additives. The Administrator should use the authority to assess threats to both air pollution and water pollution in order to effectively exercise the authority in Section 211(c) as amended by this legislation.
The Blue Ribbon Panel on Oxygenates in Gasoline recommended that EPA and others accelerate ongoing research efforts into the inhalation and ingestion health effects, air emission transformation byproducts, and environmental behavior of all oxygenates and other components likely to increase in the absence of MTBE. This should include research on ethanol, alkylates, and aromatics, as well as on gasoline compositions containing those components.
Mr. SMITH of New Hampshire. In order to limit potential negative impacts on gasoline prices and fuel supplies, the legislation authorizes a total of $750 million over three fiscal years to promote production of other fuel additives. This funding is intended to provide grants to merchant MTBE producers for retooling existing facilities to produce other clean fuel additives, such as iso-octane, in order to avoid any fuel shortages that may have otherwise resulted from the elimination of the use of MTBE.
According to a report from the EPA, the impact of the Federal Reformulated Fuels Act on the fuel supply could range from a one percent shortage to a one percent surplus. The report further stated that, due to the transition assistance, the actual impact is more likely to be on the surplus side.
Mr. JEFFORDS. The renewable fuels and MTBE provisions contained in H.R. 4, as passed by the Senate, constitute an agreement among many competing interests that is designed to get rid of MTBE and increase renewable fuel use.
After the reformulated gasoline program went into effect in 1995, many refiners chose to use MTBE to satisfy the minimum 2 percent oxygen requirement of the program. Oxygenates reduce tailpipe emissions of carbon monoxide and other ozone precursors and provide a clean source of high octane, thereby displacing such toxic gasoline octane enhancers as benzene, toluene, and 1,3 butadiene. After implementation of the RFG program, increasing detection of MTBE in ground water and surface water led California to establish a schedule to ban MTBE and 13 other States have followed with their own MTBE bans.
It became clear that the combination of a phase out of MTBE in these states and the continued existence of the two percent oxygen content requirement for RFG could result in a potentially disruptive and abrupt transition to ethanol in states that did not have a history of using ethanol. To facilitate the ban of MTBE, and to provide greater flexibility in producing RFG, states and refiners requested Congress and the administration to lift the RFG oxygen requirement. At the same time, ethanol producers saw a major opportunity for market growth and were reluctant to support elimination of the RFG oxygen requirement.
To address the challenge of maintaining market growth for ethanol, providing greater flexibility in making clean-burning gasoline, and reducing the use of MTBE, Senators Lugar and Daschle in 2000 introduced the Renewable Fuels Act, S. 2503. That bill would allow States to waive the 2 percent oxygen requirement and established a nation-wide renewable fuels standard (RFS) to roughly triple the use of ethanol from current levels over 10 years. That RFS requirement would apply to refiners, who would be able to generate, bank, and trade credits for the use of renewable fuels, such as ethanol and biodiesel. This mechanism was designed to increase the use of renewable fuels, provide maximum flexibility in the use of those renewable fuels, while ensuring that eliminating MTBE from gasoline supplies will not lead to greater dependence on foreign oil. As a result of the credit trading and banking, refiners will use renewable fuels where and when it is most economical to do so, and no State will need to use any particular amount of renewable fuel.
That legislation also established that ethanol produced from cellulosic biomass, which is particularly energy-efficient and produces superior greenhouse gas benefits, would receive 1.5 credits for every gallon used. This should spur the establishment of new ethanol facilities across the United States that will use wood waste, municipal solid waste, switchgrass, and other innovative feedstocks.
In September of 2000, the Environment and Public Works Committee passed legislation, S. 2962, which incorporated many of the elements of S. 2503, but Congress adjourned prior to enactment of that bill. The EPW Committee again took up the issue in September of 2001, passing legislation to allow states to waive the oxygen requirement, banning MTBE, and providing additional resources for cleaning up MTBE contamination, but not including a renewable fuels standard. As the Senator from New Hampshire mentioned earlier, that legislation, S. 950, was largely incorporated into S. 517, the Energy Policy Act. A separate section establishing a renewable fuels standard also was included in S. 517. Subsequently, negotiations between the Environment and Public Works Committee, the Energy Committee, and ethanol, public health, environmental, and petroleum interests produced a compromise that replaced the initial MTBE and renewable fuels provisions of S. 517.
During debate on the RFS, concerns were raised that it could lead to gasoline price increases. In response, Senators Murkowski and Daschle asked the Energy Information Administration (EIA) to evaluate the potential costs of implementing the RFS, as well as the other fuels provisions in S. 517. The EIA found that the RFS would raise gasoline prices by less than 1 penny per gallon in RFG areas and less than one-
half a cent per gallon nationwide. The EIA also noted that these were upper-bound estimates that did not account for the economic benefits that would result from the credit trading and banking provisions. The American Petroleum Institute estimated that the maximum cost increase for a gallon of gasoline due to the implementation of the RFS would be less than one-third of a cent per gallon.
Concerns have also been expressed that requiring the nation to use more renewable fuels could lead to supply shortages and price increases. The evidence suggests that there will be abundant supplies of renewable fuels to meet the RFS. The RFS begins in 2004, requiring 2.3 billion gallons of ethanol to be used in that year. According to the California Energy Commission report on nationwide ethanol supplies, issued in August of 2001, there will be 2.7 billion gallons of ethanol capacity in place by then, so renewable fuels supplies should be plentiful.
Nevertheless, additional consumer protections were incorporated into the legislation. Under the bill, the Department of Energy is required to evaluate supply and logistics of transporting and blending renewable fuels. If problems are anticipated, the Administrator of the Environmental Protection Agency is instructed to reduce the level of the RFS in 2004. In subsequent years, States that are concerned about renewable fuels prices or supplies may apply to the Administrator of the Environmental Protection Agency to reduce the RFS in whole or in part. State applications must be acted upon within 90 days.
The legislation creates a narrow prospective safe harbor from liability for defect in design or manufacture of a renewable fuel by virtue of it being mandated by this legislation. To qualify for this limited protection, manufacturers of such fuels must have evaluated them for EPA with respect to their toxicity, carcinogenicity, air quality impacts, water quality impacts and they must be used in compliance with any restrictions imposed by EPA. All other causes of action or damages available under applicable State or Federal law are unaffected by this legislation including, but not limited to, negligence, duty to warn, personal injury, property damage, environmental damage, wrongful death, compensatory damages, and punitive damages.
The Senate passed its bill on April 25 and appointed conferees on May 1. We should move quickly to begin this conference because there are many difficult matters to negotiate. Fortunately, the compromise provisions which we have been discussing relating to MTBE and renewable fuels appear to have broad support, judging from the votes in the Senate, and should be amenable to swift agreement among the energy bill conferees.
So, as I mentioned during the debate on S.517 as part of my summary of these provisions, this is not an ideal package, but it meets the test of improving and protecting air and water quality and promoting renewable energy.
Mr. SMITH of New Hampshire. Mr. President, I agree with the chairman that this legislation is not ideal, but it accomplishes our main goal of remediation and prevention of MTBE contamination. I am pleased that the House has appointed its conferees today and I hope that we can move that conference to an expeditious conclusion maintaining the integrity of the compromise that we worked out here in the Senate.
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