EPA Rejects Oxygenate Waiver

By CMTA Staff

Capitol Update, July 22, 2005

The U.S. Environmental Protection Agency (EPA) for the second time rejected California’s request for a waiver from the Clean Air Act (CAA) requiring the addition of oxygenates to its gasoline in nonattainment areas of the state.  Section 211 of the CAA requires reformulation of gasoline to at least an oxygen content of two percent in nonattainment areas.  This section also allows EPA to waive that requirement if it determines that "compliance with such requirement would prevent or interfere with the attainment by the area of a primary ambient air quality standard."

Initially, California refineries complied with this requirement by adding MTBE to their gasoline.  Since the state banned the use of MTBE as of January 1, 1999, California refiners have reformulated using ethanol to meet the requirement.  California first filed for a waiver in 1999, claiming that not only does ethanol provide no discernible clean air benefit, but it, in fact, leads to increased levels of nitrous oxides (NOx), volatile organic compounds (VOC’s) and particulates hindering attainment with federal ozone and particulate standards.  The initial request was denied in June of 2001 because the state allegedly failed to demonstrate the impact of the lack of the waiver on VOC’s in ozone formation.  It argued since the tie to VOC’s was not proven, it did not have to analyze the impact on the other pollutants.

This time around, EPA, while admitting the elimination of ethanol would reduce NOx, VOC’s and particulates, claimed that California did not prove that these reductions were necessary for the non-attainment areas to come into compliance.

This decision may turn out to have little impact if Congress passes either version of the energy legislation currently pending.  Both versions require the increased use of ethanol, which would end the dispute.  The Senate version, however, includes an amendment from Senator Dianne Feinstein (D) which would exempt California from any requirement to use ethanol during the summer months.  This would go a long way toward resolving much of California’s concerns since the summer is when the worst buildup of ozone and particulates occur.
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