Exemption on Ethanol Use in Gasoline Sought

In a test of his clout with the Bush administration, Gov. Arnold Schwarzenegger is asking the U.S. Environmental Protection Agency to exempt California from a federal requirement to add ethanol to gasoline.

The EPA’s opposition to such a waiver has eased slightly. Officials said Friday the agency would no longer contest a lawsuit brought by California to force the agency to reconsider granting the waiver.

California officials argue that the requirement to use the oxygen-rich, corn-based fuel additive needlessly drives up gas prices and does nothing to reduce the state’s chronic air pollution.

“The oxygen requirement limits the ability of fuel producers to use the most cost-effective mix of gasoline blends, and as a result, greatly increases fuel costs borne by California motorists,” Schwarzenegger wrote in a letter this week to EPA Administrator Michael Leavitt.

Schwarzenegger’s decision to press the issue once again demonstrates his willingness to challenge Washington on environmental issues, even when it puts him at odds with President Bush. The new governor, for instance, also has expressed disapproval of Bush administration policy on logging in the Sierra Nevada.

“This is not new. He has always had this position, and has always meant to advocate for a waiver from the oxygenate standard from day one,” said Terry Tamminen, Schwarzenegger’s environmental protection secretary. He noted that the governor included the position in his environmental platform during the recall campaign.

“We have been talking about a number of issues where we had some disagreements, frankly, with the Bush administration, and we will continue to do so, in a constructive way,” Tamminen said.

For five years, California leaders, including former Democratic Gov. Gray Davis and the state’s two Democratic senators, have sought an exemption from the Clean Air Act requirement. State officials maintain the fuel additive, originally intended to cut tailpipe emissions of carbon monoxide, is no longer needed in California, and is actually harming state efforts to chart its own course to improve air quality.

The exemption has yet to be granted. But there are signs the EPA may be softening its stance. Earlier this month, the EPA proposed dropping the requirement for fuel producers in New Hampshire -- a move that prompted Sen. Dianne Feinstein to once again call for a California waiver.

On Thursday, Schwarzenegger submitted his letter to Leavitt, a former Utah governor. On Friday, EPA officials said the agency no longer planned to continue fighting a suit California won that essentially required the federal government to reconsider an exemption for the state.

“We’re not going to pursue further legal appeals of the court’s decision,” EPA spokeswoman Lisa Fasano said Friday. The agency had decided not to continue the court fight over a month ago, before the Schwarzenegger letter, she added. But it still has not decided whether it will grant California’s waiver request, Fasano said.

California had been using the additive MTBE, or methyl tertiary butyl ether, to meet the requirement that it add an oxygen-boosting fuel additive to its gasoline. But MTBE, which was meant to reduce air pollution, has been shown to pollute water supplies, and has now been banned by the state.

As a result, the state has had to add ethanol, the only other additive capable of meeting the federal requirement to its fuel supply. A recent federal report concluded that the switch to ethanol contributed to a spike in state gas prices.

Whether the EPA backs off on its ethanol demand during a presidential election year remains to be seen. Ensuring a market for corn-based ethanol is a major concern of Midwestern farming states. The EPA has been under strong bipartisan pressure to require continued use of the additive.

Indirectly acknowledging that issue, Schwarzenegger argued in his letter that California would continue to use ethanol in gasoline, even without being required to do so. State industries also use ethanol in consumer-based products such as deodorants and disinfectants, according to California Environmental Protection Agency spokeswoman Michelle St. Martin.

“Simply put, the [Clean Air Act] oxygen mandate slows environmental improvement, raises costs and is no longer required to ensure substantial and sustained ethanol use in California,” the letter stated.