In April, I began to think about bicycling more. With gasoline prices on the rise and outraged consumers calling for the scalps of the oil companies, President Bush was watching his popularity spiraling downward. He asked Stephen L Johnson, the Administrator of the Environmental Protection Agency (EPA), to use all of his authority to grant waivers relieving critical fuel supply shortages. The President justified the request by stating that, “I do that for the sake of our consumers. If Johnson finds that he needs more authority to relieve the problem, we're going to work with Congress to obtain the authority he needs.” The President was asking the EPA to relax fuel blend rules and reformulated gasoline regulations that are designed to alleviate local pollution but have instead caused shortages. In addition, several states, including Pennsylvania and Maryland, have also asked for waivers. Where does this issue come from? In the 1990s, Congress passed several amendments to the Clean Air Act which included provisions designed to spur increased reliance on the cleaner-burning “reformulated” gasoline (RFG) as a way to Reformulated gasoline is now required by the Clean Air Act to be used in parts of the US that experience the worst smog, such as cities, while other areas may opt to implement RFG whether a problem exists or not. The Federal RFG program was introduced in 1995, and such fuel formulations are currently used in 17 states and the District of Columbia. About 30% of all gasoline currently sold in the US is composed of RFG. Each oil company prepares its own formula which must meet federal emission reduction standards. The regulations were implemented in two phases: the first was designed to reduce smog-causing agents by 64 000 tons per year in the states that use RFG, compared to conventional gasoline. This had the practical effect of eliminating the smog-forming emissions, according to the EPA, from over 10 million vehicles. The second phase of the program was designed to reduce smog pollutants by an additional 41 000 tons per year (equivalent to the removal of 16 million vehicles) in RFG areas. As an added benefit, the phases also reduced levels of the carcinogen benzene, a component of non-RFG gasoline. On May 3, 2006, the EPA announced that it was amending the RFG regulations to remove the oxygen content requirement. One amendment addressed the RFG oxygen requirement and related compliance requirements for gasoline sold in California. No negative comment was received regarding the California rule, which went into effect on April 24, 2006. The other rule, intended to remove the oxygen requirement for RFG in all other parts of the country, was challenged in the comment stage but became final on May 5, 2006. Meanwhile, formulation regulations were caught in the switch to ethanol during the gas shortage. Formulations of oxygenated gasoline, originally containing the since-removed additive MTBE, are currently switching to ethanol. Refiners had asked for a waiver from liability for the use of MTBE, but Congress refused, refiners cut its use, and Administrator Johnson has ruled out MTBE reintroduction. Ethanol, on the other hand, potentially has a bright future. “E 10”, the 10% blend commonly seen in many parts of the US, is the most well-known formulation that will assist in reducing the nations dependence on foreign oil. However, it is “E 85”, consisting of 15% gasoline and 85% ethanol that takes advantage of a renewable resource and burns cleaner in so-called “flex fuel” vehicles. Two wonderful ideas, without doubt, but detractors point out that ethanol, used since Henry Ford's earliest cars, isn't as efficient a fuel, and because demand outweighs supply, is currently more costly than gasoline. Currently, few E85 pumps are open, but more are promised. Given the sparse number of current suppliers, large-scale use of ethanol remains far away. Just 90 or so plants produce ethanol in this country, with about 25 more on the way. However, at best, ethanol will yield approximately 5 billion gallons per year by 2007. Compare that to the 140 billion gallons of gasoline that are currently consumed by US gas-guzzlers. In the meantime, therefore, waivers represent little more than a very short-term drop in the proverbial supply bucket. Thus, for the short term we will live without one pollution-helping oxygenate (MTBE) that causes severe pollution problems, while getting enamored with another (ethanol). It may not be the answer to those who want to drive their SUV cross-country at 75 mph out of the smog in time for Aunt Hattie's Fourth of July party in Scottsbluff. But me? I am pedaling my two-wheeler to the local fireworks supplier which, if nothing else, will be an exciting addition to the mid-summer haze. Douglass F Rohrman Lord, Bissell & Brook LLP, Chicago
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