Letter from MI President John Lynn to California Environmental Policy Council Regarding the Use of Ethanol in Gasoline

The Methanol Institute would like to take this opportunity to provide comment to the Environmental Policy Council in regard to its consideration of the technical reports provided by CARB, SWRCB and OEHHA regarding the environmental fate/transport and health effects of using ethanol in California’s reformulated gasoline. These comments will summarize and amplify testimony already presented to the reporting agencies during the public comment periods provided for the individual reports.

Overall, we are concerned that in an apparent rush to judgement to comply with an Executive Order by Governor Gray Davis, key technical questions regarding the use of ethanol are being down-played and ignored. Specifically, the issues we addressed in earlier testimony include:

• The potential for the effect of commingling ethanol-blended gasoline with MTBE-blended or non-oxygenated gasolines to significantly raise evaporative emissions. A report prepared for MI by Sierra Research (attached), shows that the emissions benefits of CaRFG3 may be offset or even overwhelmed by the emissions increase due to commingling. These emission increases are in direct contravention of Executive Order D-5-99 which stipulates that CaRFG3, “maintain current emissions and air quality benefits and allow compliance with the State Implementation Plan.” CARB’s promise to study these commingling effects over the next two years, and adjust the CaRFG3 specification accordingly in 2002/2003 after refineries have been extensively modified, simply rings hollow.
• Lawrence Livermore National Laboratory and others have concluded that ethanol-blended gasoline could extend BTEX plumes in groundwater by 25%. Malcolm Pirnie presented comments to the SWRCB on the current LLNL fate and transport study of ethanol on behalf of MI (attached). As LLNL has referenced, Malcolm Pirnie prepared a 1998 report for MI on “Evaluation of the Fate and Transport of Ethanol in the Environment,” which concluded that the presence of ethanol is expected to increase BTEX plume length by approximately 27% under typical California groundwater conditions. The potential impact of increasing BTEX plume length is either that drinking water well fields could be impacted by BTEX or higher BTEX concentrations will be found at already contaminated wells.

The SWRCB seems to believe that a 27% increase in BTEX plume length is not significant. With the SWRCB currently facing 16,000 open cases of leaking USTs – representing 28% of the tank population – one would believe that the Board should be enormously concerned about adding a fuel additive that could dramatically increase the movement of known human carcinogens such as benzene away from these point sources. Further, adding ethanol-blended gasoline may make it even tougher to close these cases.

Since the State of California has determined that the use of MTBE must be phased out due to concerns about groundwater contamination from leaking underground storage tanks, we find it incredulous that the SWRCB chooses to ignore documented evidence that ethanol-blended gasoline will extend BTEX plumes.

• The reports presented to the Environmental Policy Council fail to rresolve the fact that there is simply not enough ethanol to meet California’s demand for oxygenates, as required by the federal Clean Air Act. The California Energy Commission was tasked by the Governor’s Executive Order to develop a timetable for the removal of MTBE, and concluded that it could be done, but not earlier than December 31, 2002, and at a cost of 6¢ per gallon at the pump. We believe the CEC study was incomplete, and that CARB’s CaRFG3 economic impact assessment was woefully inadequate.
  

A study recently completed for MI by the Monitor Company (not formally submitted in previous public hearings, attached here), determined that switching to ethanol will leave California with a 6.1 billion gallons shortfall of oxygenated gasoline in 2003. This means that state motorists will have a 6.5 month supply of oxygenated fuels. If other states follow California’s lead and move away from MTBE, the shortfall in ethanol supplies will result in a 3.3 month supply of oxygenated fuels for California. There is simply not enough ethanol to meet California’s demand, and keep the state in compliance with federal Clean Air Act oxygen content requirements. This shortfall will cause a significant price spikes and supply shortages. When you consider that pump prices rose 47% in May 1999, when just 12% of the supply of gasoline in California was lost due to refinery fires, the price spikes that may be seen by switching from MTBE to an inadequate supply of ethanol may dwarf last spring’s experience.

In approving its CaRFG3 regulations before determining whether or not ethanol was a viable alternative to MTBE in the face of significant air quality and groundwater contamination concerns – and failing to consider the potentially devastating impact on the state’s economy from severe pump price spikes and gasoline shortages – CARB sold California’s environment and her citizens short. We strongly urge to Environmental Policy Council to use its judgement and recognize the environmental and health effects – as well as economic – pitfalls of establishing a mandated market for ethanol in California.

Sincerely,

John Lynn

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