Stateline Story

MTBE Bans Boost Ethanol

  • June 06, 2005
  • By Eric Kelderman

A gasoline additive that helps clean up car exhaust is being banned in a growing number of states that are finding the chemical is polluting their water supplies.

Montana and Vermont are the latest of 21 states to outlaw MTBE (methyl tertiary butyl ether) a decade after oil companies started using the substance to meet federal air pollution requirements. Legislatures in Delaware, North Carolina and New Jersey are considering similar laws.

Congress also is weighing a nationwide ban of MTBE, which has been linked to cancer and has leaked from pipelines and storage tanks into surface waters and groundwater in 36 states. But Congress' proposal would ban MTBE by 2014, long after many of states will have prohibited it.

Eleven state attorneys general plus state officials across the country are urging Congress to preserve states' rights to sue oil companies for MTBE pollution.

All of this spells a boon for ethanol and bio-diesel, fuel alcohols commonly distilled from farm crops, which also can be blended with gasoline to make car emissions cleaner. The Environmental Protection Agency on June 2 rejected an attempt by California, New York and Connecticut to be exempted from having to use additives to make gasoline burn more cleanly. Because those states already have decided to ban MTBE, the EPA decision likely will force them to use ethanol to supply gasoline blends to fight smog.

Congress also is considering a proposal to require the nation to use up to 8 billion gallons of bio-fuel a year by 2012, more than double the amount of ethanol produced last year.

If you do ban MTBE, the only economical choice is ethanol, said Rich Martin, who works on state policy relations for the American Petroleum Institute.

MTBE came into wide use in 1995, when the federal Clean Air Act required 14 states to sell cleaner-burning gasoline in their most polluted cities year-round. Five other states also voluntarily agreed to sell reformulated gas in some areas. Of those 19 states, California, Connecticut, Illinois, Indiana, Kentucky, Missouri, New Hampshire, New York and Wisconsin have banned MTBE. Delaware, Georgia, Louisiana, Massachusetts, Maryland, New Jersey, Pennsylvania, Rhode Island, Texas and Virginia are still using gasoline with MTBE.

The clean-air law required gasoline in polluted areas to be blended with an "oxygenate" to reduce;smog-forming chemicals in auto emissions but did not specify MTBE. Oil producers chose to use the substance because it could be blended with gasoline at the refinery and sent through pipelines, said Charlie Drevna of the National Petrochemicals and Refiners Association. Ethanol, which also is an oxygenate, has to be shipped by truck or rail and must be blended closer to the pump, he said.

But MTBE began to leak from underground storage tanks and pipelines and was found in water supplies, even in states where the chemical was not required in gasoline. Vermont, a state not required to use cleaner-burning gasoline, banned MTBE this year after a 1997 fuel spill.

"Since that day in 1997, some 38 drinking water wells in this community have been contaminated. The people that used to get their water from those wells now make due with weekly deliveries of bottled water and filters on their water systems," Gov. James Douglas (R) said at a Hartland, Vt. bill signing..

The Vermont Department of Natural resources has found MTBE contamination at some 1,500 sites statewide, including 300 drinking water wells.

Environmental concerns also are leading federal lawmakers to consider banning MTBE nationwide by 2014 -- one provision of the federal energy bill that has passed the U.S. House and that awaits action by the Senate. But states strongly oppose a section of that bill that would shield MTBE makers from some legal liability for the pollution.

The legal shield would "leave local taxpayers and water consumers to pay for the cleanup of contaminated drinking water," said a letter to U.S. senators from attorneys general in California, Connecticut, Illinois, Maryland, Massachusetts, Montana, New Jersey, New Mexico, Rhode Island, Vermont and Wisconsin.

Another portion of the federal energy bill would require the nation to use up to 8 billion gallons of ethanol and bio-diesel annually, and advocates say their industry is ready to fill the nation's need for cleaner fuels.

"If you ban MTBE, we will be there," said Monte Shaw, a spokesman for the Renewable Fuels Association, which represents ethanol producers.

In New Hampshire, which is required to sell reformulated gasoline in four counties, gasoline blended with ethanol easily will replace fuel with MTBE, said Mike Fitzgerald of the state's Department of Environmental Services.

A number of states are promoting bio-fuels even without being required to sell cleaner-burning gasoline. Hawaii requires 85 percent of all gasoline sold to contain 10 percent ethanol. Montana passed a similar mandate this year, but it will not go into effect until 60 million gallons of ethanol are produced in the state. Minnesota has required a 10 percent ethanol blend since 1997, and a new law passed this year increases that to percent by 2012.

Fourteen states give tax incentives to ethanol producers, and seven states give tax breaks to consumers who buy ethanol-blended gasoline at the pump, according to the American Coalition for Ethanol.