San Diego Union-Tribune

Page A-3

23-Jan-2001 Tuesday 

Clinton avoids gas additive issue 

Toby Eckert 

WASHINGTON -- California lost a last-minute lobbying battle to Midwest farm-state interests last weekend when the Clinton administration closed shop without acting on the state's request for a waiver of federal gasoline additive regulations.

Now both sides are trying to figure out what action, if any, the Bush administration or the new Congress might take.

At issue is Gov. Gray Davis' 1999 request for a waiver of a Clean Air Act provision that requires gasoline sold in most of Southern California and the Sacramento area to contain oxygen-boosting additives such as MTBE and ethanol. The additives make the gasoline burn cleaner, reducing air pollution.

But MTBE, methyl tertiary butyl ether, has fouled water supplies in California, and the state is set to ban its use by the end of 2002. Unless the clean-air regulations are waived, California gasoline refiners will have to switch to ethanol, and Davis fears that could delay the MTBE phaseout and drive up gasoline prices.

Davis has argued that current supplies of ethanol -- which is largely derived from corn -- are inadequate to replace all of the MTBE used in California. Refiners can produce gasoline that meets the clean-air standards without it, he says.

But the ethanol industry and corn farmers see California as a major growth market. They argue that more than enough ethanol can be produced to meet California's 550 million-gallon demand and have fought hard against the proposed waiver.

With President Clinton issuing a flurry of 11th-hour rules and regulations in the days before he left office, lawmakers and lobbyists on both sides of the issue launched a letter-writing and phone-calling campaign to the White House to sway the decision.

As late as Friday, California officials were expecting the administration to grant at least a partial waiver to the state, which was so crucial to Clinton's political fortunes.

"We had a commitment from the administration that they would take positive action on this waiver and that commitment was made on more than one occasion," said Sen. Dianne Feinstein, D-Calif.

But sources said a compromise proposal floated by the administration -- to reduce the amount of additive required in California gasoline to 1 percent from 2 percent -- was rejected by the ethanol lobby.

Feinstein vowed to continue pushing for the waiver.

"We're going to be seeking action by the Bush administration as soon as possible," said her spokesman, Howard Gantman.

The ethanol lobby will be pushing back just as hard.

"We can take some comfort in knowing the Clinton administration did not grant the waiver," said David Uchic, a spokesman for the National Corn Growers Association. "But it doesn't mean it's the end of the story. We're going to have to remain vigilant."

Both sides are trying to divine the sympathies of the Bush administration. President Bush's home state of Texas is a major producer of MTBE, and he may not be inclined to make it easier on a state that wants to ban the additive, which is derived from natural gas.

"Clinton proved himself to be a good ally of California in the past eight years," said Pat Souders, a top aide to Sen. Dick Durbin, D-Ill., who personally lobbied Clinton to reject the waiver. "If it were going to
happen, it would appear to me that it would have happened in the Clinton years."

But New Jersey Gov. Christie Whitman, whom Bush tapped to head the Environmental Protection Agency, hails from a state that has had its own troubles with MTBE. New Jersey officials supported an effort last year to abolish the gasoline additive mandate nationwide.

Congress is another arena for the battle. Last year, a Senate committee approved legislation to ban MTBE use nationwide and give states the ability to opt out of the oxygen additive mandate. But the bill also was seen as requiring more use of ethanol.

Regional divisions on the issue are deep in Congress, and the bill died.