Redistributed as a Service of the National Library for the Environment*
98-290: MTBE in Gasoline: Clean Air and Drinking Water Issues
James E. McCarthy and Mary Tiemann
Updated May 15, 2001
Concern over water contamination caused by the gasoline additive methyl tertiary butyl ether (MTBE) has raised new questions concerning the desirability of using the additive as a means of producing cleaner burning fuel. MTBE is used by most refiners to produce the reformulated gasoline (RFG) required under the Clean Air Act in portions of 17 states and the District of Columbia. It is credited with producing marked reductions in carbon monoxide emissions; RFG has also reduced the volatile organic compounds that react with other pollutants to form smog. Over the last few years, however, incidents of drinking water contamination by MTBE, particularly in California, have raised concerns and led to calls for restrictions on its use. In March 1999, Governor Davis of California ordered a phase-out of MTBE use in the state by December 31, 2002. Ten other states, including New York, have subsequently enacted limits or phase-outs of the substance.
Until late 1998, EPA opposed measures to reduce use of the substance. Based on available research, it concluded that MTBE posed some risk, although no greater risk than that posed by other gasoline components. The Agency responded to initial reports of ground water contamination by providing information, intensifying research, and focusing on the need to minimize leaks from underground fuel tanks. As reports of contamination spread in 1998 and 1999, however, EPA's position evolved. On March 20, 2000, the Agency announced it was beginning the process of requiring a reduction or phase-out of MTBE use under Section 6 of the Toxic Substances Control Act. Because regulatory action could take several years to complete, EPA urged Congress to amend the Clean Air Act to provide specific authority to reduce or eliminate use of the substance. On September 28, 2000, the Senate Environment and Public Works Committee reported S. 2962, a bill to provide such authority, but no further action was taken on the bill.
If MTBE were removed from gasoline without amending the Clean Air Act, there would be a need for refiners to use alternative sources of oxygen in RFG. The potential alternatives are other forms of ether, or alcohols such as ethanol. These substitutes may pose adverse health and environmental impacts, but inadequate research make conclusions difficult at this time. Although a study by the State of California concluded that switching to ethanol would cause no significant adverse impacts to public health or the environment, such a switch would not be without problems. Ethanol costs more to produce than MTBE, poses challenges to the gasoline distribution system, and, in the short term, is unlikely to be available in sufficient quantity to replace MTBE nationwide. Gasoline that meets the performance requirements for RFG without using oxygenates at all can be made, but current law requires the use of oxygenates in such fuel.
The principal issues for Congress are whether MTBE use should be limited or phased out and whether Clean Air Act provisions concerning reformulated gasoline should be modified to allow refiners to discontinue or lessen their use of oxygenates. Numerous bills have been introduced in Congress to address these and other issues.
This report provides background information concerning the gasoline additive methyl tertiary butyl ether (MTBE), discusses air and water quality issues associated with it, and reviews options available to congressional and other policy-makers concerned about its continued use. It includes a discussion of legislation considered in the 106th Congress, which may serve as a starting point for legislation in the 107th.
Under the Clean Air Act Amendments of 1990, numerous areas with poor air quality are required to add chemicals called "oxygenates" to gasoline as a means of improving combustion and reducing emissions. The Act has two programs that require the use of oxygenates, but the more significant of the two is the reformulated gasoline (RFG) program, which took effect January 1, 1995. (1) Under the reformulated gasoline program, areas with "severe" or "extreme" ozone pollution (82 counties with a combined population of 55 million) must use reformulated gasoline; areas with less severe ozone pollution may opt into the program as well, and many have. In all, portions of 17 states and the District of Columbia use reformulated gasoline (see Table 1 and Figure 1); a little more than 30% of the gasoline sold in the United States is RFG.
The law requires that RFG contain at least 2% oxygen by weight. Refiners can meet this requirement by adding a number of ethers or alcohols, any of which contain oxygen and other elements. Because these substances are not pure oxygen, the amount used to obtain a 2% oxygen level is greater than 2% of the gasoline blend. For example, MTBE is only 19% oxygen and, thus, RFG made with MTBE must contain 11% MTBE by volume to meet the 2% requirement.
By far the most commonly used oxygenate is MTBE. In 1999, 87% of RFG contained MTBE. MTBE has also been used since the late 1970s in non-reformulated gasoline, as an octane enhancer, at lower concentrations. As a result, gasoline with MTBE has been used virtually everywhere in the United States, whether or not an area has been subject to RFG requirements.
Areas Using Reformulated Gasoline (as of August 2000)
Mandatory RFG Areas*
Chicago, IL (and portions of Indiana and Wisconsin)**
Los Angeles, CA
New York, NY (and portions of CT and NJ)
Philadelphia, PA (and portions of DE, MD, and NJ)
San Diego, CA
Opt-In RFG Areas***
Connecticut (entire state)
Dallas / Fort Worth, TX
Delaware (entire state)
District of Columbia
Kentucky portion of Cincinnati metropolitan area
Maryland (DC suburbs)
Massachusetts (entire state)
New Hampshire portion of Greater Boston
New Jersey (entire state)
New York (counties near New York City)
Rhode Island (entire state)
St. Louis, MO
Virginia (DC suburbs, Richmond, Norfolk - Virginia Beach - Newport News)
* RFG use required by the Clean Air Act.
** In the Chicago and Milwaukee areas, RFG is made with ethanol rather than MTBE.
*** RFG use required by State Implementation Plan as a means of attaining the
ozone air quality standard. These "opt-in" areas may opt out of the program by substituting other control measures achieving the necessary reductions in emissions, but not before January 1, 2004.
Source: U.S. EPA
State and local environmental agencies and EPA attribute marked improvements in air quality to the use of fuels containing MTBE and other oxygenates, but the exact role of oxygenates in achieving these improvements is subject to discussion. In Los Angeles, which has had the worst air quality in the country, the use of reformulated gasoline was credited with reducing ground-level ozone by 18% during the 1996 smog season, compared to weather-adjusted data for the same period in 1994 and 1995. Use of RFG also reduced the cancer risk associated with exposure to vehicle emissions by 30 to 40%, according to the California EPA, largely because it uses less benzene, a known human carcinogen. (2)
Whether the oxygenates themselves should be given credit for these improvements has been the subject of debate, with the answer depending to some extent on what one assumes would replace the oxygenates if they were removed. Asked to look at the ozone-forming potential of different oxygenates used in reformulated gasoline, a National Academy of Sciences panel concluded that "... the addition of commonly available oxygenates to RFG is likely to have little air-quality impact in terms of ozone reduction." (3) An EPA advisory panel, by contrast, concluded that the use of oxygenates "appears to contribute to reduction of the use of aromatics with related toxics and other air quality benefits." (4)
Less controversy exists regarding oxygenates' role in reducing carbon monoxide emissions. Both EPA and an interagency group chaired by the White House Office of Science and Technology Policy (OSTP) have reported improvements in carbon monoxide (CO) levels due to the use of oxygenates. According to the June 1997 OSTP report, "analyses of ambient CO measurements in some cities with winter oxygenated gasoline programs find a reduction in ambient CO concentrations of about 10%." (5)
EPA also "believes that the reductions estimated in air quality studies are significant and that these reductions help to protect the public from the adverse health effects associated with high levels of CO in the air." (6) The Agency based its conclusions on both its own analysis and on a report prepared for two industry groups. The latter, using hourly data for more than 300 monitoring sites gathered over a 9-year period, concluded that use of oxygenated fuels was associated with a 14% reduction in ambient CO concentrations. (7)
The improvements in measured air quality have not come without questions. In several cities, residents have complained of a variety of health effects from exposure to MTBE/gasoline exhaust: headaches, dizziness, nausea, sore eyes, and respiratory irritation. Some complaints have centered around the use of MTBE in cold weather, two of the principal areas noting complaints being Alaska and Milwaukee, Wisconsin.
The Interagency Task Force examined these complaints and concluded:
Additional research is being conducted by EPA, universities, and others. Under the authority of Section 211 of the Clean Air Act, EPA has requested that refiners conduct a number of health effects studies on oxygenated, reformulated, and conventional gasoline, which should provide additional information.
Much discussion has centered on whether MTBE has the potential to cause cancer. Although there are no studies on the carcinogenicity of MTBE in humans, several rodent studies have been done. Based on these animal studies (which looked primarily at inhalation effects), EPA has concluded that MTBE poses a potential for carcinogenicity to humans at high doses; however, because of uncertainties and limitations in the data EPA has been unable to make a confident estimation of risk at low exposure levels. (9) In 1998, the International Agency for Research on Cancer (IARC), the U.S. National Toxicology Program, and California's Carcinogen Identification Committee all determined not to list MTBE as a human carcinogen.
Regarding noncancer effects, another California advisory committee determined that there was not clear scientific evidence to support listing MTBE as a toxic substance affecting human development or reproduction. In reviewing available research on both cancer and noncancer effects, these groups generally noted that research gaps exist, and that the data were particularly limited on health effects associated with MTBE ingestion.
For practical purposes, the interpretation of any health risks associated with the addition of MTBE to gasoline requires a comparison to the health risks associated with conventional gasoline. The Interagency Task Force, EPA, and some environmental groups have all argued that current knowledge suggests that MTBE is a less serious pollutant than the gasoline components it replaces. According to the OSTP report, the cancer risk from exposure to MTBE is "substantially less than that for benzene, a minor constituent of gasoline that is classified as a known human carcinogen; and more than 100 times less than that for 1,3-butadiene, a carcinogenic emission product of incomplete fuel combustion." (10)
A major issue regarding the use of MTBE concerns its detection at low levels in ground water in numerous locations nationwide and at elevated levels in some municipal drinking water wells and reservoirs. MTBE is very soluble and, once released, it moves through soil and into water more rapidly than other chemical compounds present in gasoline. Once in ground water, it is slow to biodegrade and is more persistent than other gasoline-related compounds. In surface water, it dissipates more rapidly: studies show that most of it evaporates from the upper levels of surface water in a few weeks, while it persists longer at greater depths. (11)
The available data indicate that the primary source of MTBE in ground water has been petroleum releases from leaking underground storage tank (UST) systems. Other significant sources include leaking above ground storage tanks, fuel pipelines, refueling facilities, and accidental spills. The most significant source of MTBE in lakes and reservoirs appears to be exhaust from motorized watercraft, while smaller sources include gasoline spills, runoff, and ground water flow. (12)
Occurrence of MTBE in Drinking Water. Available information on the occurrence of MTBE in public drinking water supplies has increased substantially over the past few years but has been somewhat limited geographically. Although a number of serious contamination incidents have been reported, particularly in California, the available data generally do not indicate a broad presence of MTBE in drinking water supplies at levels of public health concern. However, as monitoring has increased among the states, so has the number of public water systems and private wells showing low-level detections of MTBE.
The most extensive MTBE monitoring data for drinking water are available for California, where testing for MTBE was made mandatory for most public water systems in February 1997. As of May 2001, 2,262 systems had tested 8,394 sources of drinking water. MTBE was detected in 70 (0.8%) of these sources, including 45 (0.6%) of 7,835 ground water sources and 25 (4.5%) of 559 surface water sources. Overall, 42 (1.9%) of the 2,262 public water systems reported detections of MTBE in at least 1 of their drinking water sources, and 13 (0.6%) of the systems reported that a total of 19 (0.2%) sources of water had MTBE concentrations exceeding California's MTBE drinking water standard of 13 micrograms per liter (g/L). (13)
In 1998, the State of Maine tested nearly 800 public water supplies and 950 randomly selected private wells and found detectable levels of MTBE in 16% of the public water supplies and 15.8% of the private wells. None of the public water supply samples exceeded the state drinking water standard of 35 g/L, while 1% of private well samples contained MTBE concentrations above the standard. Roughly 94% of public water supply samples showed MTBE levels that were either not detectable or below 1 g/L; the remaining 6% of samples were between 1 g/L and 35 g/L. (14)
Nationwide, the data on the presence of MTBE in drinking water have been more limited. In July 1999, the EPA-appointed Blue Ribbon Panel on Oxygenates in Gasoline reported that between 5% and 10% of drinking water supplies tested in high oxygenate use areas show at least detectable amounts of MTBE, and that the vast majority of these detections have been well below levels of public health concern, with roughly 1% of detections exceeding 20 g/L. (15)
More recent federal and state monitoring efforts have been advancing the knowledge about the presence of MTBE in drinking water. Perhaps most notably, the United States Geological Survey (USGS), in cooperation with EPA, recently assessed the occurrence of MTBE and other volatile organic compounds (VOCs) in public water supplies in 10 mid-Atlantic and Northeastern states where MTBE use is common. The study analyzed water from 1,194 randomly selected community water systems and is expected to be published soon. (16) According to the report's abstract, MTBE was detected in 8.9% of the tested water systems and was strongly associated with areas where reformulated and/or oxygenated (RFG/OXY) fuels are used. Fifteen percent of systems in RFG/OXY areas reported detecting MTBE at concentrations of 1 g/L or more, while 3% of systems outside of RFG/OXY areas reported such detections. Most MTBE concentrations ranged from 0.5 to 5 g/L, and less than 1% of the systems reported MTBE at levels equal to or exceeding 20 g/L, the lower limit of EPA's drinking water advisory. (17)
Occurrence of MTBE in Ambient Ground Water. Looking at ground water generally (not only drinking water wells), the data indicate that low-levels of MTBE are found often. Nationally, the most comprehensive ground water research has been conducted by the USGS through the National Water Quality Assessment Program (NAWQA). USGS data for some 2,743 monitoring, observation, and water supply wells in 42 states (from 1993-1998) showed MTBE present in about 5% (145) of the wells, with MTBE levels exceeding 20 g/L in 0.5% (12) of the wells. In all, MTBE was detected in ground water in 22 of the 42 states. The USGS further evaluated the occurrence data based on whether or not detections occurred in RFG or winter oxyfuel program areas. The researchers reported that low concentrations of MTBE were detected in 21% of ambient ground water samples in high MTBE-use areas and in 2.3% of samples in low or no-MTBE use areas. (18)
MTBE has been detected most frequently in ground water associated with leaking underground storage tank (UST) sites. The California Environmental Protection Agency has estimated that, based on monitoring information available for these sites, MTBE can be expected to be found in shallow, unused ground water at thousands of UST sites in the state, and often at high concentrations (in the parts per million range). (19) Moreover, a 1998 report by the Lawrence Livermore National Laboratory found that MTBE was not significantly degrading in the monitoring networks for these leaking UST sites. (20)
The picture nationwide may be similar. As of late 2000, 42 states had begun to require testing for MTBE in ground water at leaking UST sites. In a September 2000 survey of state leaking underground storage tank (LUST) programs, 31 states reported that MTBE was found in ground water at 40% or more of gasoline-contaminated sites in their states; 24 states reported MTBE at 60% to 100% of sites. (21)
Safe Drinking Water Act Initiatives. To address concerns raised by the detection of MTBE in ground water and drinking water supplies, EPA has undertaken a range of activities. In December 1997, the Agency issued a drinking water advisory for MTBE based on consumer acceptability (for taste and smell). EPA issues drinking water advisories to provide information on contaminants in drinking water that have not been regulated under the Safe Drinking Water Act (SDWA). (22) Advisories are not enforceable, but provide guidance to water suppliers and other interested parties regarding potential health effects or consumer acceptability. While the MTBE advisory is not based on health effects, EPA notes that keeping MTBE levels in the range of 20-40 g/L or lower for consumer acceptability reasons would also provide a large margin of safety from adverse health effects. Specifically, the advisory states that,
EPA plans to propose a secondary drinking water standard for MTBE in 2001. Secondary standards are based on public welfare (e.g., taste and smell), in contrast to primary standards which are based on health effects. SDWA authorizes EPA to issue secondary standards for contaminants that may affect the odor or appearance of water and that cause a substantial number of people served by a water system to discontinue its use. Such standards are not enforceable, but EPA encourages states to adopt them.
Additionally, EPA is taking steps that could lead to the development of an enforceable National Primary Drinking Water Standard for MTBE. In February 1998, EPA included MTBE on a list of contaminants that are potential candidates for regulation under the Safe Drinking Water Act. Every 5 years, EPA is required to develop a list of contaminants that may require regulation. By August 2001, the Agency was required to select at least five contaminants from the list and determine whether each contaminant should be regulated.
Compounds on the contaminant candidate list are categorized as regulatory determination priorities, research priorities, or occurrence priorities. Because of data gaps on MTBE health effects and occurrence, EPA placed MTBE in the category of contaminants for which further occurrence data collection and health effects research are priorities. Thus, while EPA did not select MTBE for regulation in this 5-year cycle, the Agency is pursuing research to fill the existing data gaps so that a regulatory determination may be made.
The Safe Drinking Water Act also directed EPA to publish a rule by August 1999, requiring public water systems to conduct monitoring for a list of unregulated contaminants that may require regulation. EPA included MTBE in this rule and directed large public water systems to begin monitoring for MTBE in January 2001. (24)
The occurrence data generated under the Unregulated Contaminant Monitoring Rule, combined with the results of ongoing health effects studies, are intended to provide information needed by EPA to make a regulatory determination for MTBE. Under SDWA, the next round of regulatory determinations will be made in 2006. EPA typically requires roughly three and one-half years to promulgate a drinking water regulation; thus, the earliest EPA would be expected to issue a regulation for MTBE is 2010. (25)
Underground Storage Tank Regulation. A key EPA and state contamination prevention effort involves implementing the underground storage tank program established by the 1984 amendments to the Resource Conservation and Recovery Act (RCRA). Under this program, EPA has set operating requirements and technical standards for tank design and installation, leak detection, spill and overfill control, and tank closure. As of 1993, all tanks were required to comply with leak detection regulations. Additionally, all tanks installed before December 1988 (when standards for new tanks took effect) were required to be upgraded, replaced or closed by December 22, 1998. Federal and state regulators anticipate that as tank owners and operators comply with the new requirements, the number of petroleum and related MTBE leaks from UST systems should decline significantly. Based on reporting by states, EPA estimates that 86% of approximately 715,000 tanks were in compliance with the December 1998 requirements by the end of fiscal year 2000. However, MTBE has been detected at many leaking underground storage tank sites, and this additive is proving more difficult and costly to remediate than conventional gasoline. Moreover, many sites have not been tested for MTBE. As testing increases, it is likely that the number and scope of corrective actions may increase as well.
In 1986, Congress created a federal response program for cleaning up releases from leaking petroleum USTs through the Superfund Amendments and Reauthorization Act, which amended RCRA Subtitle I. These provisions created the Leaking Underground Storage Tank (LUST) Trust Fund and authorized EPA and states to use the Fund to clean up tank spills and leaks in cases where tank owners or operators do not clean up sites. EPA and states use the annual Trust Fund appropriation primarily to oversee and enforce corrective actions performed by responsible parties. EPA and states also use Fund monies to conduct corrective actions where no responsible party has been identified, where a responsible party fails to comply with a cleanup order, or in the event of an emergency, and to take cost recovery actions against parties. For FY2000, Congress appropriated $70 million for the LUST program, or about 31% of the $262 million earned by the fund during the fiscal year. For FY2001, Congress has provided roughly $72 million, the amount requested. The Administration has requested this amount again for FY2001.
In late 2000, EPA launched a new USTfields initiative to address abandoned or idle industrial and commercial properties where redevelopment is hindered by petroleum contamination from abandoned USTs. This program complements EPA's Superfund-related Brownfields program which generally does not cover petroleum contamination. EPA estimates that out of 450,000 brownfields, roughly 100,000 to 200,000 contain abandoned tanks. Under the USTfields initiative, in November 2000, EPA made grants of $100,000 to each of ten communities to clean up abandoned UST sites, with special consideration being given to cities with problems caused by MTBE contamination. (26)
As part of its effort to gather information and focus research, in November 1998, EPA established an independent Blue Ribbon Panel on Oxygenates in Gasoline to review the broad range of issues posed by the use of MTBE and other oxygenates. The panel was established under the auspices of the Clean Air Act Advisory Committee, and its membership reflected a broad range of experts and stakeholders. (27)
The panel was directed to perform the following tasks:
The panel also was directed to study the causes of ground water and drinking water contamination from motor vehicle fuels, to explore prevention and cleanup technologies for water and soil, and to make recommendations to EPA "on how to ensure public health protection and continued improvement in both air and water quality."
Findings and Recommendations. In releasing its recommendations July 27, 1999, the Blue Ribbon Panel stressed that "RFG has provided substantial reductions in the emissions of a number of air pollutants from motor vehicles, most notably volatile organic compounds (precursors of ozone), carbon monoxide, and mobile-source air toxics (benzene, 1,3-butadiene, and others), in most cases resulting in emissions reductions that exceed those required by law." (28)
However, the panel noted water quality problems associated with MTBE releases and made a number of recommendations. Specifically, the panel:
The panel's numerous water protection recommendations addressed prevention, treatment, and remediation. For example, the panel recommended that EPA work with Congress to determine whether aboveground petroleum storage tanks (which generally are not regulated) should be regulated; work to enhance state and local efforts to protect lakes and reservoirs that serve as drinking water supplies by restricting use of recreational water craft; and accelerate research for developing cost-effective drinking water treatment and remediation technologies.
With regard to the recommendation to reduce substantially the use of MTBE, the panel noted that accomplishing such a major change in gasoline supply without disruptions to fuel supply and price would require up to 4 years lead time if the use of MTBE were eliminated (or less if use was substantially reduced).
The panel also suggested that EPA and others should accelerate ongoing health effects and environmental behavior research of other oxygenates and gasoline components that would likely increase in use in the absence of MTBE.
Former EPA Administrator Carol Browner concurred with the recommendation of the Blue Ribbon Panel calling for a significant reduction in the use of MTBE. She also stated her commitment to work with Congress for "a targeted legislative solution that maintains our air quality gains and allows for the reduction of MTBE, while preserving the important role of renewable fuels like ethanol." (30)
On March 20, 2000, she announced that EPA would begin the process of issuing regulations to reduce or phase out use of MTBE (discussed at greater length below in the section on "Current Statutory Authority"). Recognizing that this process could take several years to complete, she renewed her call for congressional action to "amend the Clean Air Act to provide the authority to significantly reduce or eliminate the use of MTBE," to "ensure that air quality gains are not diminished," and to "replace the existing oxygen requirement contained in the Clean Air Act with a renewable fuel standard for all gasoline." (31)
The major potential alternatives to MTBE are other oxygenates. This is so both for practical and for regulatory reasons: at present, oxygenates are required by the Clean Air Act, and, they possess several advantages, including high octane and the ability to replace toxic components of conventional gasoline.
Oxygenates that could replace MTBE include ethers, such as ethyl tertiary butyl ether (ETBE), and alcohols such as ethanol. These other oxygenates may pose health and environmental impacts, but inadequate data make it difficult to reach definite conclusions. EPA's Blue Ribbon Panel concluded:
Ethanol and other alcohols are considered relatively innocuous on their own; they generally do not persist in ground water and are readily biodegraded. However, research suggests that the presence of ethanol in a gasoline plume can extend the spread of benzene and other toxic constituents of gasoline through ground water. (33) This is largely because ethanol is likely to be degraded preferentially by microorganisms that would otherwise feed on other chemical components of gasoline including benzene, toluene, ethylbenzene, and xylene (BTEX).
In announcing the phase-out of MTBE in his state, March 25, 1999, California's Governor Davis required three state agencies to conduct additional research on the health and environmental impacts of ethanol, the most likely substitute. In reports approved in January 2000, the agencies concluded that if ethanol were substituted for MTBE, there would be "some benefits in terms of water contamination" and "no substantial effects on public-health impacts of air pollution." (34)
A recent article, based on the California ethanol review, focused specifically on the relative risks of ground-water contamination by spills of ethanol-blended gasoline, MTBE-blended gasoline, and non-RFG gasoline. The authors concluded that,
The switch from MTBE to ethanol is not without problems, however. Ethanol costs substantially more to produce than MTBE; it poses challenges to the gasoline distribution system (it would separate from gasoline if transported long distances by pipeline, so it must be mixed with non-oxygenated gasoline blendstock close to the market in which it is to be sold); and, in the short term, it is unlikely to be available in sufficient quantity to replace MTBE nationwide. (36)
Since late 1997, some refiners have discussed the possibility of making gasoline that meets the performance requirements for RFG without using oxygenates. Tosco and Chevron, two firms with large stakes in the California gasoline market, have discussed this possibility, and asked for changes in the rules to allow the sale of RFG not meeting the oxygenate requirement. In October 1997, Tosco expressed concern about the growing evidence of the potential for extensive MTBE contamination in asking the California Air Resources Board to "take decisive action" to "begin to move away from MTBE." (37) Chevron, California's largest refiner, followed suit, announcing that it "may be possible to make a cleaner burning gasoline without oxygenates, and still reduce emissions to the same extent achieved with current standards." (38) The company has stated its support for legislation allowing it to stop or reduce its use of oxygenates. These statements were supported by the Western States Petroleum Association. The American Petroleum Institute now also supports legislation to remove the RFG oxygenate requirement.
Affected industries are not united in seeking authority to replace MTBE, however. The major producers of MTBE, notably ARCO, have not joined the efforts to promote alternatives, and ethanol producers and agricultural interests (most ethanol is made from corn) are concerned that removing the oxygenate requirement would negatively affect the sales of their products.
Whether EPA has authority to take steps to regulate or ban MTBE use in the absence of specific congressional authorization is a question many have raised as the Agency and Congress consider their responses to MTBE contamination. In theory, if the Agency determines that MTBE poses what it considers a significant threat to air quality, water quality, or human health, it can take action to restrict or ban the substance using existing authority under the Toxic Substances Control Act (TSCA). (39) Until early 2000, based on its public statements, the Agency seemed unlikely to make such a determination. In April 1998 testimony before a House Commerce subcommittee, for example, EPA's then Acting Assistant Administrator for Air and Radiation stated: "One needs to be very cautious about initiating changes to the RFG program that could upset the balance of previous agreements that have led to the significant emissions reductions we are seeing today." (40) Instead, the Agency focused attention on the need to prevent leaks from underground fuel storage tanks, which, it argued, would address the major cause of drinking water contamination by MTBE.
On March 20, 2000, however, former EPA Administrator Browner announced that the Agency would start a regulatory process "aimed at phasing out MTBE," (41) using Section 6 of TSCA. According to the Agency's press release, the Agency expected to issue a proposed rule to ban or phase down MTBE within 6 months. As the Agency noted, however, a TSCA rulemaking is procedurally burdensome and may take "several years" to complete. To use the authority, the Agency will have to conclude that MTBE poses an unreasonable risk to health or the environment. In the 24 years since TSCA was enacted, the Agency has successfully invoked this authority against fewer than half a dozen classes of chemicals.
The first step in the TSCA rule-making process was the issuance of an Advance Notice of Proposed Rulemaking (ANPRM) on March 24, 2000. (42) The ANPRM solicited the input of interested parties regarding EPA's course of action, including:
The Agency also requested additional information regarding releases of gasoline containing MTBE, the extent of contamination of water resources by the substance, remediation technologies, alternatives to MTBE and their potential impacts on health and the environment, and the cost of limiting or phasing out MTBE over various time frames. (43) As of May 2001, the Agency is still preparing a proposed rule, with decisions as to its specifics and actual proposal unlikely before summer 2001.
In addition to TSCA authority, Section 303 of the Clean Air Act could possibly have been invoked. Section 303 allows the Administrator to seek a restraining order (and temporarily to issue such orders on her own authority) in cases where "a pollution source or combination of sources ... is presenting an imminent and substantial endangerment to public health or welfare, or the environment...." In EPA's assessment, however, studies to date suggest that MTBE is less toxic than certain other gasoline components, such as benzene, so it might be difficult to justify a finding of imminent and substantial endangerment.
Legislation that could affect MTBE use has been introduced in every Congress since the 104th. In the 106th Congress, S. 2962, a bill to ban the use of MTBE in gasoline within 4 years, allow states to waive the RFG program's oxygenate requirement, stimulate the use of ethanol and clean vehicles, provide additional funding for the cleanup of contaminated ground water, and provide additional authority to EPA to regulate fuel additives and emissions, was reported by the Environment and Public Works Committee September 28, 2000 (S.Rept. 106-426). On August 4, 1999, the Senate also adopted an amendment to the FY2000 agricultural appropriations bill (S. 1233), offered by Senator Boxer, expressing the sense of the Senate that use of MTBE should be phased out.
In addition to the reported bill, about 25 other bills related to MTBE were introduced in the 106th Congress. About half would have repealed the RFG program's oxygenate requirement or allowed waivers. Most would have phased out or limited the use of MTBE in gasoline. Other introduced bills addressed specific aspects of the MTBE issue: some, for example, would have required research and/or monitoring of the substance; some would have accelerated the cleanup of MTBE from leaking underground storage tanks and/or assisted communities with responding to MTBE contamination that affects drinking water supplies or threatens public health; one would have accelerated the schedule for new emission standards for marine engines, in order to reduce the amount of fuel and MTBE emitted to surface waters.
As in previous years, one of the bills in the 107th Congress (H.R. 52) aims to change the regulatory requirements for reformulated gasoline as they pertain to California. California has unique status under Section 211(c)(4)(B) of the Clean Air Act. Because its air pollution program predated the federal program and because air quality in portions of the state has historically been worse than that anywhere else in the country, California is allowed to have separate regulations for fuels. As a result of this unique status, gasoline sold in portions of the state (Los Angeles, Sacramento, and San Diego) must meet two separate sets of requirements -- state and federal. The federal requirements mandate that RFG contain at least 2% oxygen by weight (a requirement now generally met by adding MTBE to the fuel). These standards apply in areas containing about two-thirds of the state's population. California's standards, which became effective a year later than the federal, include an oxygen content specification "because of the oxygen requirements in the federal RFG program." (44) According to Cal EPA, however, "a key element of the California program is a mathematical or 'predictive' model that allows refiners to vary the composition of their gasoline as long as they achieve equivalent emission reductions. ... [F]or areas not subject to federal RFG requirements, refiners can use the predictive model to reduce or even eliminate the use of oxygenates," except during the four winter months, when they are subject to separate oxygenate requirements to reduce carbon monoxide. (45)
The complicated regulatory requirements faced by California refiners and marketers of gasoline led former Representative Brian Bilbray, of San Diego, to introduce legislation to provide for more flexible federal requirements in California's case. (This year, the same bill has been introduced by Representative Gary Condit.) Similar legislation was introduced in the Senate by Senator Dianne Feinstein. The legislation would apply only to California, dispensing with the federal oxygen requirement, provided that the fuel continues to achieve the required reductions in emissions of toxic air pollutants and ozone-forming compounds specified elsewhere in Section 211(k). This legislation has been supported by a number of oil companies, the California Air Resources Board, and the Governor of California, and it was cosponsored in the 106th Congress by 51 members of the California congressional delegation.
The House Commerce Committee's Subcommittee on Health and Environment approved the 106th Congress version, H.R. 11, with an amendment, September 30, 1999. The discussion during markup, however, indicated an uncertain future for the bill, a situation that may continue in the 107th Congress. Numerous amendments were offered and withdrawn without a vote, with the promise of further negotiations before the bill was brought to the full committee. Amendments offered would have broadened the bill's coverage to other states, phased out the use of MTBE, and addressed international trade issues related to the MTBE phase-out. The full committee did not act on the bill.
In part, the difficulties encountered by H.R. 11 reflected wider concerns over MTBE use. Organizations initially opposed or indifferent to legislation affecting California have come to favor action, but on a broader scale. These organizations include the U.S. Environmental Protection Agency (which initially opposed legislation), the American Petroleum Institute (API), and environmental interests such as the Natural Resources Defense Council (NRDC) and American Lung Association (ALA). API, NRDC, and ALA support a set of principles adopted by the Northeast States for Coordinated Air Use Management (NESCAUM). NESCAUM represents the air pollution program directors in New York, New Jersey, and the 6 New England states. It has played a significant role in building consensus among the Northeastern states required to use reformulated gasoline. In a report issued in August 1999, (46) and in subsequent principles adopted by a task force of state air and water officials, NESCAUM has called for:
While support for waiving the oxygenate requirement is now widespread among environmental groups, the petroleum industry, and states, a potential obstacle to enacting legislation lies among agricultural interests. About 6% of the nation's corn crop is used to produce the competing oxygenate, ethanol. If MTBE use is reduced or phased out, but the oxygenate requirement remains in effect, ethanol use would likely soar, increasing demand for corn. Conversely, if the oxygenate requirement is waived by EPA or by legislation, not only would MTBE use decline, but so, likely, would demand for ethanol. As a result, Members, Senators, and Governors from corn-growing states have taken a keen interest in MTBE legislation. Unless their interests are addressed, they might pose a potent obstacle to its passage.
Reflecting these dual concerns, former EPA Administrator Carol Browner and Agriculture Secretary Dan Glickman called on Congress at a press conference, March 20, 2000, to amend the Clean Air Act to "significantly reduce or eliminate" the use of MTBE and to require the use of ethanol in all gasoline. Legislation to mandate the use of ethanol while allowing limits on MTBE use was subsequently introduced and reported by the Environment and Public Works Committee with an amendment in the nature of a substitute on September 28, 2000 (S.Rept. 106-426). As reported, the bill would have given the EPA Administrator authority to phase down use of MTBE in gasoline; whether or not the Administrator used this authority, the bill would have banned MTBE use within 4 years of enactment. The bill would have allowed Governors to waive the RFG program's oxygenate requirement, and would have set new standards for toxic substance and aromatic content of RFG in areas where the waiver was exercised. It would have stimulated the use of ethanol and clean vehicles: each fuel supplier would have had the option of using an increasing percentage of renewable fuel (ethanol) in each year between 2002 and 2011, or could have used credits generated by the manufacture and sale of zero emission or "super ultra low" emission vehicles. The report noted that this requirement could nearly triple the consumption of ethanol by 2011. The bill would have provided additional authority to EPA to regulate fuel additives and emissions. It also would have authorized a one-time appropriation of $200 million from the LUST Trust Fund to clean up MTBE leaks from tanks, and authorized another $200 million over 6 years for states to use to oversee and enforce tank leak prevention and detection regulations. S. 2962 is considered a possible starting point for Senate Environment's discussion of the issue in the 107th Congress.
As the deadlines for state phaseout of MTBE move closer, investment decisions involving hundreds of millions of dollars hang on the regulatory framework of the post-MTBE gasoline market. Thus, pressure for congressional action on this issue could be high in the 107th Congress. Whether this pressure will produce enacted legislation is less clear.
Among the states, California has arguably been the most active in addressing MTBE issues. Actions taken by the State Legislature and the Governor helped propel the issue to national prominence. Legislation, signed October 8, 1997, required the state to set standards for MTBE in drinking water, and required the University of California to conduct a study of the health effects of MTBE and other oxygenates and risks associated with their use. The UC report, which was issued in November 1998, recommended a gradual phase-out of MTBE from gasoline in California. (47) Based on the report and on public hearings, Governor Davis issued a finding that "on balance, there is a significant risk to the environment from using MTBE in gasoline in California," and required the state's Energy Commission to develop a timetable for the removal of MTBE from gasoline at the earliest possible date, but not later than December 31, 2002. (48) The Governor also required the California Air Resources Board (CARB) to make a formal request to U.S. EPA for a waiver from the requirement to use oxygenates in reformulated gasoline and required three state agencies to conduct additional research on the health and environmental impacts of ethanol, the most likely substitute for MTBE.
The waiver request resulted in months of negotiation between EPA and CARB, with EPA initially expressing skepticism that it had authority to grant a waiver under the circumstances. (49) The Clean Air Act authorizes waiver of the RFG oxygenate requirement only if the Administrator determines that oxygenates would prevent or interfere with the attainment of a National Ambient Air Quality Standard. (50) More than 2 years later, a decision on the request is still awaited. Without a waiver, ozone nonattainment areas in the state would be required to substitute another oxygenate (most likely, ethanol) when the MTBE ban takes effect.
Following California's decision to phase-out MTBE, at least 11 other states (Arizona, Colorado, Connecticut, Iowa, Maine, Michigan, Minnesota, Nebraska, New York, South Dakota, and Washington) have acted to limit or phase out its use. The largest of these, New York, will ban it on January 1, 2004. Maine (which is not required to use RFG, but had chosen to do so) also opted out of the RFG program in October 1998 as a result of concerns over MTBE contamination of ground water, and subsequently substituted a low-volatility gasoline to provide similar reductions in emissions of ozone-forming compounds, without requiring the use of oxygenates.
Another MTBE issue that emerged in the wake of California's decision to phase out the use of MTBE in gasoline concerns the applicability of certain provisions in the North American Free Trade Agreement (NAFTA). On June 15, 1999, the Methanex Corporation, a Canadian company that produces methanol in the United States and Canada, notified the U.S. Department of State of its intent to institute an arbitration against the United States under the investor-state dispute provisions of the NAFTA, claiming that the phase-out of MTBE ordered by the Governor of California March 25, 1999 breaches U.S. NAFTA obligations regarding fair and equitable treatment and expropriation of investments, entitling the company to recover damages which it estimated at $970 million. (51)
Chapter 11, Article 1110, of the NAFTA requires the United States, Canada, and Mexico to treat each other's investors and investments in accordance with the principles set out in the Chapter. It also allows these investors to submit to arbitration a claim that a NAFTA party has breached Chapter 11 obligations and to recover damages from any such breach. The NAFTA requires the disputing investor to deliver a written notice of its intent to the NAFTA country involved at least 90 days before the claim is submitted to arbitration under the appropriate international arbitral rules. NAFTA also requires 6 months to elapse "since the events giving rise to a claim" before the investor may proceed with arbitration. Because no settlement was reached within that timeframe, the matter has proceeded to arbitration.
Controversy continues to surround the use of MTBE in gasoline. Research conducted to date suggests that the air quality benefits of its use are substantial. However, increasing detections of MTBE in ground and surface water, and particularly in municipal and private drinking water wells, have raised significant concerns about the use of this oxygenate. Research on MTBE and other oxygenates is ongoing and should provide additional information to help advance the current understanding of MTBE-related health and environmental issues.
Legislation introduced in Congress initially focused on the limited issue of MTBE use in California, where federal requirements have prevented refiners from adopting a more flexible approach permitted by state regulations. Modifying the federal requirements as they pertain to California has had substantial support among the California congressional delegation. As MTBE has been detected in drinking water wells in other parts of the country, and in surface waters in addition to underground sources, broader legislation has been introduced. These bills emerge in a context of ongoing activities aimed at reducing releases of petroleum, generally, or MTBE, specifically. The effectiveness and sufficiency of these efforts (such as the continued implementation of UST regulations and stricter emissions standards for marine engines), combined with concerns and uncertainties about potential replacements for MTBE, add complexity to the debate. Also, some lawmakers have cautioned against acting precipitously to replace MTBE with other additives without adequate research and consideration of potential adverse consequences.
Developments in the states, particularly California and the Northeast, are driving a reconsideration of the petroleum industry's reliance on MTBE as the principal means of meeting RFG requirements. This reconsideration, by refiners and by policy-makers at the state level, prompted congressional consideration of the issue in the past Congress and will likely generate further action in 107th Congress.
1. (back)The requirements for reformulated gasoline (RFG), to reduce air toxics and the emissions that contribute to smog formation, are found in Section 211(k) of the Clean Air Act. Separate requirements for oxygenated fuel, to reduce carbon monoxide formation, are contained in Section 211(m). Of the two programs, that for RFG has a much larger impact on the composition of the nation's gasoline, because RFG requirements are in effect year-round and apply to a larger percentage of the country. The Section 211(m) requirements, by contrast are in effect during winter months only and affect a small percentage of the nation's gasoline. Ethanol is the primary oxygenate used in winter oxygenated fuels and MTBE the primary oxygenate used in RFG, although either can be used in both fuels.
3. (back)Committee on Ozone-Forming Potential of Reformulated Gasoline, National Research Council, Ozone-Forming Potential of Reformulated Gasoline, May 1999, p. 5. The NAS study concluded that other characteristics of RFG, notably "lowering the Reid Vapor Pressure (RVP) of the fuel, which helps depress evaporative emissions of VOC [volatile organic compounds], and lowering the concentration of sulfur in the fuel, which prevents poisoning of a vehicle's catalytic converter" result in a reduction of about 20% in VOC emissions.
4. (back)U.S. Environmental Protection Agency, Blue Ribbon Panel on Oxygenates in Gasoline, Executive Summary and Recommendations, July 27, 1999, Appendix A. Available at Internet website: http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm.
5. (back)Executive Office of the President, National Science and Technology Council, Interagency Assessment of Oxygenated Fuels, Washington, D.C., June 1997, p. iv. Referred to hereafter as the OSTP Report.(Executive summary and recommendations are available at Internet website http://wwwsd.cr.usgs.gov/nawqa/pubs/abstracts/zogorski/ostp.exec.sum.html) The report expressed some hesitation about its conclusions, particularly regarding the impacts of MTBE in colder weather. It also noted methodological difficulties in identifying statistically significant reductions smaller than 10%, and recommended additional research.
7. (back)Systems Applications International, Inc., for the Renewable Fuels Association and the Oxygenated Fuels Association, Regression Modeling of Oxyfuel Effects on Ambient CO Concentrations, Final Report, January 8, 1997, p. 1.
8. (back)OSTP Report, p. vi. The report did suggest that "greater attention should be given to the potential for increased symptoms reporting among workers exposed to high concentrations of oxygenated fuels containing MTBE," however.
9. (back)U.S. Environmental Protection Agency. Drinking Water Advisory: Consumer Acceptability Advice and Health Effects Analysis on Methyl Tertiary-Butyl Ether (MTBE). EPA-822-F-97-009, December 1997. p. 1-2. This and other health effects information is available at Internet website: [ http://www.epa.gov/OST/drinking/mtbe.html].
11. (back)Keller, Arturo, et al., Health and Environmental Assessment of MTBE, Report to the Governor and Legislature of the State of California as Sponsored by SB 521, Volume I, Summary and Recommendations, University of California, November 1998. p. 35.
Environmental Protection Agency. MTBE in California Drinking Water, August 2,
2000, available at Internet website:
(Micrograms per liter(g/L) are equivalent to parts per billion (ppb) for fresh water.)
14. (back)Maine Department of Human Services, Department of Environmental Protection, and Department of Conservation. The Presence of MTBE and Other Gasoline Compounds in Maine's Drinking Water, A Preliminary Report. October 13, 1998. 24 p. Available at Internet website: http://janus.state.me.us/dep/blwq/gw.htm. (Maine was not required to use RFG but had done so voluntarily; the state opted out of the RFG program in October 1998 because of concerns over MTBE contamination of ground water and drinking water wells.)
15. (back)The Blue Ribbon Panel on Oxygenates in Gasoline. Executive Summary and Recommendations. July 27, 1999. Summary and full report are available at Internet website: http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm.
17. (back)Grady, Stephen J. and George D. Casey. MTBE and other VOCs in Drinking Water in the Northeast and Mid-Atlantic Region. Available at Internet website:http://sd.water.usgs.gov/nawqa/pubs/abstracts/grady/Grady_iccssw_abs.pdf .
MTBE was the second most frequently detected VOC in drinking water, after trihalomethanes (disinfection byproducts) which were detected in 45% of systems tested. Chloroform, the most frequently detected trihalomethane, was found in 39% of systems.
18. (back)U.S. Geological Survey. Data summary submitted to the EPA Blue Ribbon Panel on the Use of MTBE and Other Oxygenates in Gasoline. January 22, 1999. Available at Internet website: http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm#Presentations.
20. (back) Happel, Anne, E. H. Beckenbach, and R. U. Halden. An Evaluation of MTBE Impacts to California Groundwater Resources. Lawrence Livermore National Laboratory and the University of California, Berkeley. June 11, 1998. p. iv.
21. (back)New England Interstate Water Pollution Control Commission (NEIWPCC). Survey of State Experiences with MTBE Contamination at LUST Sites (August 2000). Available at Internet website: http://www.neiwpcc.org/mtbe1.html. The survey shows that some states began requiring testing at LUST sites in the 1980s (Maine in 1986 and Minnesota in 1987) while others recently began to do so (Kentucky in 2000 and Washington in 2001).
22. (back)At least 7 states have set health-based drinking water standards for MTBE ranging from 13 parts per billion (ppb) to 240 ppb. (Parts per billion are equivalent to g/L.) At least 5 states have adopted a secondary standard (based on aesthetic qualities, i.e., taste and odor), ranging from 5 ppb to 70 ppb. At least 32 states have adopted a very wide range of ground water cleanup levels; some are guidelines, some are enforceable, and some vary depending on the use of ground water; some states apply these levels to ground-water cleanup at leaking underground storage tank sites where ground water is used for drinking water.
24. (back) 64 Federal Register 50555, September 17, 1999. The law requires monitoring by all large public water systems (serving more than 10,000 people) and requires a representative sampling of smaller systems.
25. (back)Conceivably, this schedule might be shortened. Since 1996, SDWA has authorized EPA to promulgate an interim health-based drinking water standard for any contaminant that the Administrator determines presents an urgent threat to public health (§1412(b)(1)(D)).
27. (back)The MTBE Blue Ribbon Panel home page, which includes a list of panel members, can be found at http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm.
28. (back) Blue Ribbon Panel on Oxygenates in Gasoline, "Panel Calls for Action to Protect Water Quality While Retaining Benefits from National Clean Burning Gas," press release, July 27, 1999, p. 2. Available at http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm. Regarding dissenting views, one member endorsed the water protection reforms but disagreed with the recommendation to limit the use of MTBE, noting that the panel had not identified any increased public health risk associated with MTBE use in gasoline; another member supported maintaining the existing oxygenate standard for the air quality benefits.
31. (back)See "Clinton-Gore Administration Acts to Eliminate MTBE, Boost Ethanol," EPA Headquarters Press Release, March 20, 2000, pp. 7-8, available at web sitehttp://www.epa.gov/. (Click on EPA Headquarters Press Releases.)
33. (back)See, for example, "Ethanol-Blended RFG May Cause Small Hike in Gasoline Plume Size," Mobile Source Report, December 2, 1999, p. 11, or "Experts Charge Cal/EPA Rushing Approval of Ethanol in RFG," Inside Cal/EPA, January 14, 2000, p. 1.
34. (back)California Air Resources Board, Water Resources Control Board, and Office of Environmental Health Hazard Assessment. Health and Environmental Assessment of the Use of Ethanol as a Fuel Oxygenate. Report to the California Environmental Policy Council in Response to Executive Order D-5.-99. Dec. 1999. Volume 1, Executive summary. P. 1-22. Report is available at Internet website: http://www-erd.llnl.gov/ethanol/).
36. (back)For additional information on ethanol, see CRS Report RL30369, Fuel Ethanol: Background and Public Policy Issues.
39. (back)Under the Clean Air Act, EPA has authority to waive the RFG oxygenate requirement if the oxygenate interferes with the attainment of an air quality standard; however, EPA has no authority to waive the requirement for water quality reasons.
40. (back)Statement of Richard D. Wilson, former Acting Assistant Administrator, Office of Air and Radiation, U.S. EPA, in "Implementation of the Reformulated Gasoline Program in California," Hearing before the Subcommittee on Health and Environment, Committee on Commerce, U.S. House of Representatives, April 22, 1998, Serial No. 105-94, p. 30.
47. (back)See Keller, Arturo, et al., Health & Environmental Assessment of MTBE, Report to the Governor and Legislature of the State of California As Sponsored by SB 521, November 1998. Available on the web at http://www.tsrtp.ucdavis.edu/mtberpt/homepage.html.
48. (back)Governor Gray Davis, Executive Order D-5-99. The Executive Order can be found on the Governor's Internet site at http://www.governor.ca.gov/briefing/execorder/d599.html. For a news account, see "Davis Moves To Phase Out MTBE Additive: Oil Industry To Hear Governor's Plan Today," San Francisco Chronicle, March 25, 1999, p. A1.
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