Panel Rejects State Ethanol Waiver

California officials suffered a setback in Congress on Wednesday in their effort to keep the state from having to add ethanol to gasoline, a requirement that state officials warn could lead to price spikes and supply shortages.

The House Energy and Commerce Committee rejected a proposal by California lawmakers to allow states to sell gasoline without ethanol so long as it meets anti-pollution rules. The 33-22 vote against the measure came during the panel’s consideration of an energy bill that Republican leaders hope to bring to the House floor before the August recess.

An aide to Rep. Henry A. Waxman (D-Los Angeles) said the state nonetheless stands a good chance of winning on the House floor. The California-sponsored measure, however, faces strong opposition from the ethanol lobby and influential Corn Belt lawmakers.

“We recently won a victory for ethanol and the American farmer when the Bush administration ruled against California’s request for a waiver,” said Rep. John Shimkus (R-Ill.) after the committee vote. “Now we have won again by turning back a legislative attempt to undo the EPA ruling.”

Countered Waxman: “There’s only one reason we’re being asked to use ethanol--politics.”

California officials have turned to Congress because the Environmental Protection Agency rejected the state’s request for a waiver from a provision of the Clean Air Act that would require the state to use ethanol. Under federal law, so-called oxygenates must be added to gas in the nation’s smoggiest regions to help the fuel burn cleaner.

But Gov. Gray Davis has ordered that MTBE--the oxygenate widely used in California--be phased out by 2003 because it has contaminated ground water throughout the state. The only practical alternative to MTBE is ethanol.

California officials worry that there may not be enough ethanol to meet the state’s demands, despite industry assurances to the contrary.

The issue created an unusual alliance, bringing together Waxman and his ideological opposite, Rep. Christopher Cox (R-Newport Beach), as well as the oil industry and environmentalists in support of the California proposal.

On the other side were members from the ethanol-producing Midwest and Texas, where MTBE is produced.

California lawmakers hope to line up more support from other states, mainly in the Northeast, seeking to phase out MTBE because of ground water contamination.

Rep. Anna G. Eshoo (D-Atherton) cautioned her colleagues not to think “ABC--Anybody but California. Just think, you may be next.”