More Reaction to EPA's California Waiver Denial

June 14, 2001

House Agriculture Committee Chairman Larry Combest (R-TX) believes that the EPA announcement holding California to clean-burning gasoline standards elevates ethanol as the clean, renewable, American-grown choice for a comprehensive energy plan. Tuesday morning, EPA announced that it would not approve the State of California's request to ignore the Clean Air Act's federal oxygen content requirement for reformulated gasoline (RFG). Rather than seeking use of another oxygenated additive such as ethanol – produced from corn – state officials sought a waiver from Clean Air rules by dropping the use of all oxygenates, after abandoning MTBE

Ethanol supporters believe their product now becomes the alternative oxygen additive of choice for states now abandoning the petroleum-derivative MTBE. "Ethanol becomes the American-grown, renewable resource for the comprehensive fuel mix called for by the president's energy plan," said Combest.

Demand for ethanol in California will be approximately 580 million gallons annually, with about 230 million bushels of corn necessary to produce the ethanol needed by California motorists, according to the National Corn Growers Association. The NCGA projects that amount of corn grind will boost corn prices by 10 to 15 cents/bushel, increasing the value of the nation's corn crop by as much as one billion dollars.

"After more than two years of uncertainty on this issue, NCGA applauds the Bush Administration for reaching the correct decision on the waiver," said Tim Hume, NCGA president-elect, a grower from Walsh, CO.

In announcing the decision, EPA stated: "After an extensive analysis, the Agency concluded that there is significant uncertainty over the change in emissions that would result from a waiver. California has not clearly demonstrated what the impact on smog would be from a waiver of the oxygen mandate."

"NCGA supplied EPA with the factual data - in the form of a technical analysis - to help secure a favorable decision," explained Hume. "Specifically, NCGA's data demonstrated that adding ethanol to California's gasoline would improve air quality and protect water resources. EPA's comments on its reasons to deny the waiver indicated the role that such data assumed. Without funding from the state checkoff boards, NCGA's technical data would not have been available to influence the administration's decision."

Ethanol production for this year is on schedule to exceed 2 billion gallons. With 600 million gallons of ethanol obligated for clean fuels programs, there is plenty of ethanol available to meet the needs of California motorists. And ethanol production capacity is expected to increase significantly, because the uncertainty surrounding the waiver has dissuaded growers from investing in new ethanol plants and increasing capacity at existing facilities.

"EPA's decision-coupled with congressional initiatives to incorporate a renewable fuels standard in emerging energy policy-will enable ethanol producers to help meet national energy security goals, facilitate environmental stewardship and promote economic development for rural communities," Hume concluded.