Ethanol set to expand, serve Cal on waiver denial reports

11 June 2001 21:27  [Source: ICIS news]

HOUSTON (CNI)--The US ethanol industry said Monday it is already gearing up for expansion and stands prepared to supply California in the wake of reports that President George W Bush will deny the state's request for a waiver on US clean air regulations this week.

In a statement, the Renewable Fuels Association (RFA) said Monday that Bush's denial will "preserve the positive air quality benefits of oxygenates in gasoline and help keep California gasoline prices from rising higher."

Washington DC-based RFA is the industry's national trade association.

Said Bob Dinneen, vice president of the RFA: "President Bush is making the right decision to stand up for clean air, low prices and domestic renewable fuels. His decision is rooted in sound science and upholds the letter and spirit of the Clean Air Act."

Dinneen said proposed ethanol plants across the country "that have been on hold for the 25 months this decision has been pending are being given the green light to begin construction."

He said the industry can supply nearly 150m gallons of ethanol this year to California companies that have ceased blending methyl tertiary butyl ether (MTBE). He predicted it will take 580m gallons to meet California's demand for reformulated gasoline oxygenates in 2003.

Dinneen added that Bush's decision reaffirms what US Environmental Protection Agency (EPA) and state officials have said for two decades - that ethanol helps reduce air pollution.

Added Dinneen: "With the benefits of the oxygenate standard once again reaffirmed, all parties should move forward in California to ensure a smooth transition from MTBE to ethanol. There is no reason to put California consumers at risk with further delays."

California had sought a waiver from a Clean Air Act rule that requires the use of cleaner-burning reformulated gasoline (RFG) containing at least 2% oxygen by weight in regions with the worst air pollution.

Refiners have been using MTBE to meet that requirement but officials said the chemical has leaked from underground storage tanks and contaminated groundwater.

Two years ago, state officials ordered that MTBE be phased out of California's gasoline by the end of next year and asked the Clinton administration to waive the federal oxygenate requirement entirely.

Bush's pending decision will remove the uncertainty hovering over the future of California’s gasoline market, the RFA said, adding that the ethanol industry is ready to supply the California oxygen market.

By: Mike Sheridan
+1 713 525 2653

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