AFBF Urges Congress Keep Oxygen Standard

July 19, 2001

The American Farm Bureau Federation is urging Congress to reject an effort to waive the oxygenate standard in reformulated gasoline. An amendment to legislation on energy policy is expected to be offered in the House Energy and Commerce Committee by Reps. Christopher Cox (R-CA) and Henry Waxman (D-CA). It would require the Environmental Protection Agency to waive the oxygenate content requirement when petitioned by any governor.

"If this amendment is offered and is successful, it would have a serious and negative impact on air quality and on the ethanol industry," said AFBF President Bob Stallman. The two congressmen contend there may not be enough ethanol to satisfy the demand for oxygenates in states such as California. They also contend that a lack of sufficient transportation would make it difficult to ship ethanol economically.

"There is no basis for either argument," said Stallman. The California Energy Commission just completed a comprehensive survey of the U.S. ethanol industry and concluded there will be two billion gallons of new ethanol production capacity on line by 2003. That would be more than enough to meet the 580 million gallons of demand created in California and the 800 million gallons of potential demand in the northeast.

Transportation issues are being addressed and large volumes of ethanol -- between 10 and 12 million gallons per month -- are already being shipped to California by rail or water. The transportation infrastructure of shipping ethanol from Gulf Coast ports to California is exactly the same as that being used for other gasoline-blending components. The American Waterways Operators indicate they will not have a problem handling the increased demand for ethanol.

Stallman said: "The proposed amendment is flawed. If one governor petitions EPA for a waiver while others don't, the federal reformulated gasoline program will become even more segmented. That would further complicate gasoline production and distribution systems, limiting supply and increasing consumer costs."