Davis Orders Phaseout of Gas Additive MTBE

In one of the most highly anticipated decisions of his young administration, Gov. Gray Davis on Thursday declared the gasoline additive MTBE a threat to the environment and ordered that it be phased out in California.

The move puts the state at the forefront of a growing movement against MTBE--which has contaminated drinking water wells in Santa Monica, Lake Tahoe and elsewhere--and heightens pressure for a nationwide ban.

Declaring that “a significant risk to California’s environment exists” if the use of MTBE continues, Davis ordered that all gasoline in the state be free of the additive by the end of 2002.

He added that the fuel industry should be “ready and willing to assist us in this effort” and challenged industry leaders “to step up to the plate and get this done before the deadline.”

MTBE is a key component of “cleaner burning gasoline,” which has been used in most of California’s 24 million vehicles since 1996. Developed by the Arco oil company, it was first used as an octane booster to replace lead starting in 1979.

Davis’ order will require oil companies that spent $5 billion on refinery modifications for MTBE in the early 1990s to retool their equipment yet again. The gradual elimination is intended to give the industry time to make such changes, and allow for the development of alternatives.

Davis called the slow phaseout a prudent approach that would protect air and water quality while minimizing the risk of a rise in gasoline prices. He called MTBE “by far the most complicated issue I’ve had to deal with” since his election in November.

The delayed ban was praised by the oil industry, which had feared that pressure from grass-roots groups and state legislators would prompt Davis to outlaw MTBE immediately.

“We’re very impressed by the governor’s decision,” said David Fogarty, spokesman for the Western States Petroleum Assn. “We applaud his recognition that an immediate ban on MTBE would have a devastating impact on California consumers and the economy.”

But Sen. Richard Mountjoy (R-Arcadia), a leading opponent of MTBE and an advocate of an immediate ban, expressed disappointment that Davis had taken the “cautious” route: “He’s calling the shots,” Mountjoy said. “His administration is responsible for it and we’ll have to live with it.”

Marguerite Young, state director of the nonprofit group Clean Water Action, agreed that the timetable is too slow: “There should be a way to stop the damage being done,” she said, especially in those communities “that have borne the brunt of the contamination.”

But Davis defended his decision as “an aggressive but responsible course of action that ensures the quality of our air, protects the quality of our water and minimizes any disruption in the availability of affordable fuel.”

To help oil companies phase out MTBE, Davis will seek an immediate waiver from federal clean air rules requiring that gasoline contain smog fighting oxygenates such as MTBE. The waiver would not, however, exempt California from meeting clean air standards.

The change mirrors a permanent exemption sought by U.S. Sen. Dianne Feinstein (D-Calif.), who wants to amend the federal Clean Air Act to allow California to avoid using oxygenates if it can meet air pollution standards without them. Davis called Feinstein on Thursday to tell her he supports her bill and will push for its passage.

Since the Clean Air Act was passed in 1990, states have been under pressure to crack down on auto emissions to reduce smog. One way to reduce emissions is to increase the oxygen content in gasoline, and MTBE quickly became seen as a silver bullet.

The state Air Resources Board says that using MTBE in gasoline has had the same effect as removing 3 million to 4 million vehicles on state roads.

Oil companies and sister corporations produce 20 billion pounds of it a year, making it one of the most common commercial chemicals in the nation. In California, the largest single market, MTBE accounts for 11% of the 30 million gallons of gasoline used each day.

As MTBE grew in popularity, however, discoveries of the additive in lakes and underground drinking water wells multiplied. MTBE typically enters the aquifer through leaking underground storage tanks, and pollutes lakes by entering the water from two-stroke engines such as those that power Jet Skis and other watercraft.

Santa Monica, Santa Clara and South Lake Tahoe are among areas with drinking water wells contaminated by MTBE, and at least one study by researchers at the Lawrence Livermore National Laboratory concluded that more than 10,000 monitoring wells have been tainted by the compound since 1992.

The most visible MTBE battleground has been Lake Tahoe, where authorities have banned certain two-stroke engines.

MTBE’s effects on humans are poorly understood and may remain so for decades, some researchers say. But it has been shown to cause various forms of cancer in rats and mice, and a study by the Centers for Disease Control showed that acute exposure causes headache, nausea and dizziness.

Legislation by Mountjoy in 1997 authorized a study of MTBE by the University of California. It also required the governor to determine whether MTBE is a health threat and take “appropriate action.”

In the weeks preceding Davis’ decision, lobbying over the controversial additive grew intense. MTBE manufacturers, among others, used the specter of dirtier air to rally opposition to a ban.

On Wednesday, the Oxygenated Fuels Assn., which represents makers of MTBE, launched an advertising blitz on the issue, including full-age ads in the Los Angeles Times and the Sacramento Bee. If “special interests” succeeded in pressuring Davis to ban MTBE, the newspaper ad said, it would mean a return to “smog alerts and asthma attacks, brown skies and red eyes.”

Its television ad--airing in the Los Angeles and Sacramento markets--was even more dramatic, featuring a shot of a child in a hospital emergency room, breathing with an inhaler. If MTBE is banned, a voice warns, “our air will be filled with more toxins and our emergency rooms will be filled” with kids.

On Thursday, the group sponsoring the ads issued a statement applauding the governor’s decision, saying it demonstrated a “commitment to protecting our fragile environment.” But Davis was in no mood for such praise. He lambasted the ads as “highly irresponsible, old-fashioned scare tactics” and suggested that the sponsors fire the advertising agencies that created the campaign.

Davis said his decision, contained in an executive order, was based on a review of university studies, hearings by state regulators and scientific findings. In the order, Davis instructs the state Air Resources Board and the California Energy Commission to develop by July a timetable for a phaseout of MTBE. The order also requires the state Water Resources Control Board to determine which aquifers are most vulnerable to contamination and make ground water protection and cleanup a priority.

Still unresolved is how large a role ethanol will play as MTBE is phased out. In a letter last week, a dozen state legislators promoted ethanol as a viable alternative. It has been used extensively as a gasoline additive in the Midwest.

Davis has expressed concern that the supply of ethanol is not adequate to meet California’s needs if MTBE is abandoned.

But Eric Vaughn, president of the Renewable Fuels Assn., said existing plants and diversion from other markets could immediately produce 500 million gallons of ethanol in California.

He added that California’s rice straw, forest residue and agricultural waste products that can be converted to ethanol could vastly boost potential production.

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Times staff writer Bettina Boxall in Los Angeles contributed to this story.