[Senate Hearing 105-879]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 105-879
 
         USE OF METHYL TERTIARY-BUTYL ETHER (MTBE) IN GASOLINE

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                                   on

                                S. 1576

 A BILL TO AMEND THE CLEAN AIR ACT TO PERMIT THE EXCLUSIVE APPLICATION 
  OF CALIFORNIA STATE REGULATIONS REGARDING REFORMULATED GASOLINE IN 
                     CERTAIN AREAS WITHIN THE STATE

                               __________

                           SEPTEMBER 16, 1998

                               __________

  Printed for the use of the Committee on Environment and Public Works

                              ------------

                    U.S. GOVERNMENT PRINTING OFFICE
53-127 cc                   WASHINGTON : 1999

_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402




               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED FIFTH CONGRESS
                 JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire          DANIEL PATRICK MOYNIHAN, New York
DIRK KEMPTHORNE, Idaho               FRANK R. LAUTENBERG, New Jersey
JAMES M. INHOFE, Oklahoma            HARRY REID, Nevada
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri        JOSEPH I. LIEBERMAN, Connecticut
TIM HUTCHINSON, Arkansas             BARBARA BOXER, California
WAYNE ALLARD, Colorado               RON WYDEN, Oregon
JEFF SESSIONS, Alabama
                     Jimmie Powell, Staff Director
               J. Thomas Sliter, Minority Staff Director

                                  (ii)




                            C O N T E N T S

                              ----------                              
                                                                   Page

                           SEPTEMBER 16, 1998
                           OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     2
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island     1

                               WITNESSES

Bilbray, Hon. Brian, U.S. Representative from the State of 
  California.....................................................     5
    Prepared statement...........................................    80
Dunlap, John D., III, chairman, California Air Resources Board, 
  Sacramento, CA.................................................    12
    Prepared statement...........................................    83
Durante, Douglas A., executive director, Clean Fuels Development 
  Coalition, Arlington, VA.......................................    25
    Prepared statement...........................................    93
Feinstein, Hon. Dianne, U.S. Senator from the State of California     7
    Correspondence re: MTBE between Senator Feinstein and EPA 
      officials.................................................. 67-76
    Letters and resolutions submitted for the record............. 34-67
    Prepared statement...........................................    31
Greenbaum, Daniel S., president, Health Effects Institute, 
  Cambridge, MA..................................................    18
    Prepared statement...........................................    87
Jessel, Al, senior fuels specialist, Chevron Products Company, 
  San Francisco, CA..............................................    23
    Prepared statement...........................................    90
Sullivan, Ned, commissioner, Maine Department of Environmental 
  Conservation, Augusta, ME......................................    15
    Prepared statement...........................................    85

                          ADDITIONAL MATERIAL

Text of S. 1576, A bill to amend the Clean Air Act to permit the 
  exclusive application of California State regulations regarding 
  reformulated gasoline in certain areas within the State........    30
Articles, Sacramento Bee.........................................    45
Letters:
    American Lung Association and National Resources Defense 
      Council....................................................   124
    Association of California Water Agencies.....................    39
    California Energy Commission.................................    38
    California Environmental Protection Agency...................    38
    California Independent Oil Marketers Association.............    55
    California Independent Petroleum Association.................53, 54
    Chevron Products Co..........................................    36
    East Bay Municipal Utility District..........................    50
    Environmental Protection Agency..................68, 69, 70, 73, 74
    Feinstein, Hon. Dianne, U.S. Senator from California.67, 72, 75, 76
    Governor Pete Wilson of California...........................    37
    Governors' Ethanol Coalition, Oxygenated Fuels Association.104, 112
    Lake County Board of Supervisors.............................    52
    Los Gatos Village Association................................    66
    Milpitas, CA.................................................34, 58
    Mountjoy, Richard, California State Senator..................    56
    Orange County, CA Water District.............................    35
    Oxygenated Fuels Association.................................   113
    San Diego County Board of Supervisors........................    49
    San Joaquin Valley Unified Air Quality District..............    40
    Santa Clara, CA..............................................    60
    Santa Monica, CA.............................................    52
    South Lake Tahoe, CA.........................................    42
    South Lake Tahoe, CA, Chamber of Commerce....................    47
    South Lake Tahoe, CA, Public Utility District........42, 46, 48, 62
    Tosco Corporation............................................    37
    University of Pennsylvania School of Medicine................    76
    Ventura County Air Pollution Control Board...................    51
Lists:
    MTBE Questions and Answers, Oxygenated Fuels Association.....   118
    Frequently Asked Questions, Californians United to Save 
      Boating....................................................   106
    Status of Wells Impacted by MTBE.............................    43
Press releases:
    Oxygenated Fuels Association................................119-125
    South Lake Tahoe Public Utilty District......................    44
Resolutions:
    Alameda County, CA...........................................    63
    Amador County, CA............................................52, 57
    Campbell, CA.................................................    57
    Gilroy, CA...................................................    64
    Los Altos, CA................................................    65
    Los Altos Hills, CA..........................................    66
    Los Angeles Community Development Commission.................    41
    Los Gatos, CA................................................    65
    Mesa Consolidated Utility District...........................    64
    Milpitas, CA.................................................34, 58
    Monte Sereno, CA.............................................    59
    Morgan Hill, CA..............................................    60
    Orange County, CA Water District.............................    35
    Santa Clara, CA..............................................61, 62
    South Lake Tahoe Utility District............................    63
    South Tahoe, CA..............................................    47
    Ventura County Air Pollution Control Board...................    52
Statements:
    American Bioenergy Association...............................   102
    Californians United to Save Boating..........................   106
    Commision of the County of Los Angeles.......................    41
    Daschle, Hon. Thomas, U.S. Senator from the State of South 
      Dakota.....................................................    77
    Department of Energy, by Robert Gee..........................    97
    Du, Yinghua, Enhanced Formation of Sulfate and Nitrate 
      Associated with the Use of Oxygenated Fuels................    77
    Environmental Protection Agency, by Margo T. Oge.............   100
    National Marine Manufacturers Association....................   104
    Oxygenated Fuels Association.................................   108
    Santa Clara Valley Water District............................    50
    Tosco Corporation............................................   126


         USE OF METHYL TERTIARY-BUTYL ETHER (MTBE) IN GASOLINE

                              ----------                              


                     WEDNESDAY, SEPTEMBER 16, 1998

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2 p.m. in room 
406, Dirksen Senate Office Building, Hon. John H. Chafee 
(chairman of the committee) presiding.
    Present: Senators Chafee and Boxer.

           OPENING STATEMENT OF HON. JOHN H. CHAFEE, 
          U.S. SENATOR FROM THE STATE OF RHODE ISLAND

    Senator Chafee. I want to welcome all the witnesses and 
thank you for taking time to appear here today.
    The purpose of today's hearing testimony regarding the use 
of methyl tertiary-butyl ether in gasoline. It also includes S. 
1576.
    I agreed to hold this hearing several months ago in order 
to take a closer look at S. 1576, which otherwise may have been 
attached to an appropriation bill.
    Last December, this committee held a field hearing in 
California to examine the presence of MTBE in the Nation's 
water supply. MTBE is used throughout the country. If MTBE is a 
water quality problem in California, it may well be a problem 
elsewhere, so we ought to look at it from a national 
perspective.
    The use of oxygenates like MTBE increased significantly 
after passage of the Clean Air Act Amendments in 1990. The 
Dole-Daschle amendment required that all reformulated gasoline, 
RFG--that's the way we will be referring to the reformulated 
gasoline--all of that sold in the worst ozone nonattainment 
areas contained under the Dole-Daschle bill had to contain at 
least 2 percent of oxygenates by weight year-round.
    Today, approximately 105 million gallons of Federal RFG is 
burned each day in 17 States and in the District of Columbia. 
RFG constitutes 32 percent of all gasoline nationwide.
    The benefits of the RFG program have been substantial. Over 
300 million tons of pollutants have been reduced; benzene 
emissions, much more toxic than MTBE, have already been reduced 
37 percent here RFG is used.
    Phase two RFG, scheduled to begin in the year 2000, will 
achieve even greater reductions. The inclusion of oxygenates 
has been an important part of its success; however, no program 
is without its faults and incapable of being perfected. 
California's own experience with its reformulated gasoline 
program underscores the weakness of the act. Supporters of S. 
1576 argue that 2 percent oxygenate mandate is unnecessarily 
prescriptive and achieves no environmental benefit that cannot 
be achieved by other gasoline formulas that meet the same 
emission standards.
    They further argue that eliminating the mandate will reduce 
the amount of MTBE used, and, therefore, reduce the chance that 
it will make its way in the drinking water supplies.
    Some opponents to the bill argue that if the mandate is 
lifted it should be done nationwide. Others argue that the 
mandate has been very successful and shouldn't be lifted at 
all. Others fear the vulcanization of our Nation's gasoline 
production system due to patchwork State regulation.
    MTBE is not added to gasoline just to meet the 2 percent 
mandate. It is also used nationwide because it is an effective 
octane enhancer and expands the gasoline supply.
    MTBE has been found in drinking water wells and leaking 
underground storage tanks from New Hampshire to Florida, 
Montana to Alabama, and in my home State of Rhode Island. Much 
of this comes from leaking underground storage tanks.
    As the RFG program expands and moves into phase two, we 
must continue to evaluate its performance, its mandates, its 
cost versus benefits, and its overall impact on public health.
    I welcome everyone here today and look forward to hearing 
what we have to say.
    Senator Chafee. Now, Senator Boxer, do you have a statement 
you would like to make?

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. Yes. I would appreciate making that 
statement before we have to go vote would be very helpful. 
There is a vote, a live quorum. It will be less than 5 minutes.
    Senator Chafee. Yes. My only problem--Representative 
Bilbray, you've got some votes stacked up?
    Mr. Bilbray. Yes. We haven't been called yet, but the time 
is coming.
    Senator Chafee. All right, why don't you go ahead and 
proceed, Senator.
    Senator Boxer. Thank you.
    I am so pleased to see my senior Senator here, along with 
Congressman Bilbray, and commend them both for their work.
    Mr. Chairman, I wanted to thank you so much, because last 
year you graciously gave me permission to chair a field hearing 
in California on the threats posed by MTBE drinking water 
contamination, and at that time I was quite alarmed at the 
testimony, and immediately after that I wrote to Secretary 
Browner and asked that we phase out MTBE. I have yet to really 
hear from her directly on that point, but I think we are 
getting to that point. If there are other ways that we can meet 
the standards--and I think Senator Feinstein and Congressman 
Bilbray will point that out in their testimony, as will the 
California Air Resources Board--why would we be putting this 
carcinogen into the gasoline?
    We have to clean the air. We can't step back from that. But 
we also have to make sure that the water is pure. This isn't a 
question of choosing between one or the other; we have to do 
both.
    I would ask unanimous consent that my full statement be 
placed in the record.
    Mr. Chairman, I am so pleased at your growing interest in 
this situation. I want to say, again, that we need to do two 
things, in my opinion. We need to phase out MTBE, and Secretary 
Browner could do that. We also have to clean up the 
contamination, and Secretary Browner is doing that in Santa 
Monica. I am very pleased that the EPA came in and they headed 
up the team and they're working to come up with a plan.
    We now have thousands of wells in California that are 
contaminated, Mr. Chairman. We need plans to clean up that that 
contamination, and then we have to remove and make sure that 
MTBE is not added to gasoline.
    I want to comment on the legislation before us. I think it 
is a first step in the right direction. The reason I prefer 
phase-out is because this would require the State to act and 
all the States to act, and if States didn't act there could 
still be MTBE in gasoline, whereas if it is phased out by the 
EPA it will be gone forever. I believe that that is the most 
expeditious way to go.
    But I will tell my colleagues Senator Feinstein and 
Congressman Bilbray that I will be supporting their 
legislation. If EPA doesn't act, we have to act. Again, I 
commend them from the bottom of my heart because this is 
putting MTBE right in this committee where it belongs if we 
truly are the committee to preserve the environment.
    [The prepared statement of Senator Boxer follows:]
    Statement of Hon. Barbara Boxer, U.S. Senator from the State of 
                               California
    Good afternoon, Mr. Chairman. I want to thank you for holding this 
hearing today to address the serious problems associated with methyl 
tertiary butyl ether (MTBE) use.
    Last year, you graciously allowed me to chair a field hearing in 
California on the threats posed by MTBE drinking water contamination. 
That hearing revealed that MTBE poses a very serious and pervasive 
threat to California's drinking water supplies.
    Today's hearing will focus on another important aspect of the MTBE 
issue; specifically, whether we can achieve the air quality benefits 
associated with reformulated gasoline without adding MTBE to that 
gasoline.
    Considering these two issues together is critical. If the air 
quality benefits associated with reformulated gasoline may be achieved 
without using MTBE, then how can we justify putting the public's 
drinking water at risk by continuing to use it?
    While MTBE has been used in the blending of gasoline since the 
1970s, its use increased dramatically following the passage of the 
Clean Air Act Amendments of 1990. In regions of the country with poor 
air quality--including Southern California and Sacramento--those 
amendments required the use of reformulated gasoline. Under the Act, 
reformulated gasoline must contain 2 percent oxygen by weight.
    Today, about 70 percent of the gasoline sold in California contains 
2 percent oxygen by weight due to this federal Clean Air Act 
requirement. While other oxygenates like ethanol may be used to meet 
this 2 percent requirement, the ready availability of MTBE and its 
chemical properties has made it the oxygenate of choice among oil 
companies.
    While the oxygenate of choice, MTBE is also classified as a 
possible human carcinogen. When MTBE enters groundwater, it moves 
through the water very fast and very far. Once there, MTBE resists 
degrading in the environment. We know very little about how long it 
takes to break down to the point that it becomes harmless.
    There has been only very limited study on the public health impact 
of drinking water contaminated by MTBE. We do know, however, that even 
at very low levels, MTBE causes water to take on the taste and odor of 
turpentine--rendering it undrinkable.
    That is, it makes water smell and taste so bad that people won't 
drink it.
    While MTBE drinking water contamination is emerging as a national 
issue, it is already a very serious problem in California. MTBE is 
leaking from California's underground storage tanks at an alarming 
rate. A June 1998 Lawrence Livermore National Laboratory study revealed 
that MTBE is leaking from over 10,000 underground storage tanks in the 
state.
    The study also indicated that this is a conservative estimate.
    MTBE contamination from such tanks has already forced the closure 
of drinking water supplies in several areas of California. Santa 
Monica, South Lake Tahoe, Glennville and Santa Clara have all closed 
drinking water wells due to MTBE contamination. MTBE has also been 
discovered in many reservoirs throughout the state.
    To address the closure of drinking water supplies in California, 
and the threat of more closures in the future, I have urged the 
Environmental Protection Agency (EPA) to follow a two part strategy.
    First, I have asked EPA to phase out the use of MTBE. The 
Administrator of EPA has broad legal authority to protect drinking 
water supplies under the Safe Drinking Water Act. Given the 
pervasiveness and seriousness of MTBE contamination, I believe the 
exercise of this authority to phase out MTBE is justified.
    Second, I have asked EPA to use its authority under the Safe 
Drinking Water Act, the Resource Conservation and Recovery Act, and 
Superfund (the Comprehensive Environmental Response, Compensation, and 
Liability Act) to speed the cleanup of drinking water already 
contaminated with MTBE.
    In Santa Monica, EPA has embarked on an effort to do just that. 
There, EPA has exercised this authority to identify the parties 
responsible for the contamination at the most severely impacted site. 
EPA is now in the process of crafting a settlement which would 
establish the actions those parties must take to cleanup the site.
    I support Senator Feinstein's efforts to address the issue of MTBE 
use in California. S. 1576 would waive the Clean Air Act oxygenate 
requirement so long as a state could achieve equal or better emission 
reductions without using an oxygenate like MTBE.
    Under the bill, oil companies would still be free to use MTBE--
unless it is ultimately phased out by the State of California. By 
lifting the oxygenate requirement, however, S. 1576 would make a state 
phase out possible. In that way, S. 1576 would be a very positive step 
forward.
    In this hearing today, California's Air Resources Board (CARB) will 
testify California can meet emission standards without using oxygenates 
like MTBE. If California could meet these standards without using MTBE, 
then how can we justify putting our public water supply at risk by 
continuing to use it?
    What grounds, then, are there for taking that risk?
    I thank my colleague Senator Einstein for her work on this piece of 
the MTBE puzzle. I look forward to continuing to work with her, this 
Committee and the Administration to phase out the use of MTBE, and to 
speed the cleanup of MTBE contaminated drinking water in California and 
elsewhere in the nation.
    Thank you, Mr. Chairman.
    Senator Chafee. Thank you.
    Now, Senator, is it okay if he goes first? What's your 
situation? Both you and I have to go over and vote in pretty 
short order.
    Senator Feinstein. Yes. It is your pleasure. It is your 
committee.
    Senator Chafee. Well, you will be here for a while? Can you 
come back?
    Senator Feinstein. Yes. I would like to lay out a case, 
because I think I have a substantial case and good 
documentation to make in support of this bill and to answer 
some of the questions.
    Senator Chafee. All right. Why don't we let the 
representative go. He's got a bunch of stack votes. And you and 
I will go up, and when we come back you will have all the time 
you want.
    All right, Mr. Representative, why don't you go ahead, Mr. 
Bilbray?

 STATEMENT OF HON. BRIAN BILBRAY, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Bilbray. Mr. Chairman, I appreciate the opportunity to 
be able to address you at this hearing. Frankly, I want to 
thank Senator Feinstein for her strong bipartisan leadership on 
this issue.
    The California support for our bill is bipartisan. In fact, 
Mr. Chairman, let me point out that it is almost unanimous--49 
Members of the California delegation of the House have signed 
support and are sponsors of this bill. As you stated, you have 
what appears to be unanimous support from the Senate side of 
the California delegation.
    Let me just remind the committee that I am bringing this 
bill with the Senator not just as a Member of Congress, but as 
an ex-member of the Air Resources Board and the Air Pollution 
Districts of California. My interest here is in clean air and 
the safe environment.
    This bill is specific to California. It builds on the 
tradition of the original Clean Air Act and the amended Clean 
Air Act, which continually have said that California has been 
so unique in its progressive attitude towards clean fuel 
strategies that California will be treated separate from the 
rest, so that the Federal Government doesn't get involved or 
obstruct its progressive approaches to clean air strategies, 
especially as it applies to the clean fuel approach.
    Now, my bill says that we can approach California's clean 
fuel program with the flexibility that Californians recognize 
as being outcome-based. It does not mandate the use, nor does 
it ban the use of any specific additive. It allows the 
flexibility for scientists to be able to address this issue 
based on good science and what's good for the environment.
    It does not mandate any particular ingredients, and thus 
you don't reach the Catch-22 that we've run into with the MTBE 
issue, as the Senator from California has pointed out.
    My bill says that we return back to the concept of sound 
science and maintain sound science, and with the development of 
the reformulated gasoline program, and especially as it applies 
to California.
    California has always set its bar higher than anyone else 
in the world. We have the most strict air pollution regulations 
of any community anywhere in the world, second to none. To 
those who have suggested that this bill would somehow encourage 
California to pollute its air, I remind them again and I 
challenge them that California is the cleanest, has the highest 
standards and has the cleanest strategies.
    To further underscore the bipartisan commitment to this, 
I'd like to point out at this time and introduce the May 26, 
1998 letter of support to the Council on Environmental Quality, 
which supports this bill. And, at the same time, I would ask 
that we include the letters of support from the California air 
pollution control officers. Every major air pollution district 
in California supports this bill because it is good for the 
environment.
    Now, I recognize that some have expressed concern about the 
issue of ``opening up the Act'' for other possible purposes. 
Mr. Chairman, I know you have that concern, I also have that 
concern, and I feel very, very comfortable with the fact that 
there are people such as yourself who are in positions of 
influence that want to make sure that the act is not abused.
    This bill is completely compartmentalized based on the 
original and the existing amended Clean Air Acts, to identify 
California's clean fuel strategies as being separate and apart 
from the national. It has always been that way, and this bill 
builds on that, and that is why it keeps any potential broad 
opening minimized, because we're specifically talking about one 
small section of the Act that only applies to California.
    Californians have proved in the past, and they will 
continue to prove, that through the use of science they were 
able to build a better mousetrap than anyone else has seen 
before. With this bill, we can build on that and allow 
California to not only develop a cleaner air proposal, but to 
also address issues like the MTBE concerns.
    Let's talk about MTBE. Let's be up front; there is no 
ingredient of gasoline that belongs in our drinking water. That 
much is clear. We need to talk about stopping any leaks and any 
contaminants that may be going into our drinking water. The 
tank leaks need to be addressed.
    I just want to point out to the committee that what this 
bill does is eliminate a mandate, and replaces it with 
flexibility based on scientific outcome. That, in turn, means 
that the mandate is now not being used to block our ability to 
address an environmental concern that is not only one of 
drinking water, but also clean air. I remind you that in 
California cleaner burning gasoline has one-half of the toxic 
emissions of the Federal formula. I repeat--one-half as much 
toxic pollutants are allowed in the California formula than the 
Federal formula.
    We are second to none and have been very successful.
    Mr. Chairman, in closing let me just say this: I appreciate 
the opportunity to highlight this legislation, to highlight the 
success California has made working, based on the Clean Air Act 
of not only 1974, but also 1990, and ask that the Federal 
Government continue to be a partner with California in moving 
this agenda forward.
    What really matters is not what we do here or what we say 
here, but how that affects the quality of life and the 
environment in California. We have a chance here to do the 
right thing. The Bilbray-Feinstein bill is common sense, good 
science, and it should be used as an example of why we need to 
be willing to do better whenever possible.
    I appreciate the chance to testify today and I remain 
available to answer any questions. Mr. Chairman, I really want 
to thank you for your attention to this issue. I have been very 
impressed with your leadership, and I appreciate it.
    Senator Chafee. Thank you very much, Mr. Bilbray.
    Senator Chafee. I have got to go over and vote now, and 
we'll adjourn for that. If you want to stay, you can, but I 
think you've got some votes, yourself. I will be coming back, 
and I presume Senator Boxer likewise will be coming back.
    Mr. Bilbray. I will try to return immediately, Mr. 
Chairman. Thank you very much.
    Senator Chafee. I don't want to guarantee that we will have 
questions for you. We've got your testimony here and we've got 
other witnesses, so----
    Senator Boxer. I don't have any questions. Congressman, 
thank you very much.
    Senator Chafee. Thank you very much. And I don't have 
questions either.
    Mr. Bilbray. Thank you very much.
    Senator Chafee. We'll put those letters in the record.
    Mr. Bilbray. Thank you, Senator.
    Senator Chafee. We'll take a recess now.
    [Recess.]
    Senator Chafee. All right. If we could have everyone's 
attention, please, I want to apologize to Senator Feinstein for 
taking so long, and Representative Bilbray. We've got an 
endangered species matter that we reported out from our 
committee, and we've been working on that and whether we can 
achieve passage on that.
    Now, Senator Feinstein, if you would like to proceed, we 
welcome you before the committee.

  STATEMENT OF HON. DIANNE FEINSTEIN, A UNITED STATES SENATOR 
                  FROM THE STATE OF CALIFORNIA

    Senator Feinstein. Thanks, Mr. Chairman, very much. I very 
much appreciate your holding this hearing. I know your 
concerns. I'm very pleased to work with Congressman Bilbray. 
I'm delighted he can be here. The chairman of the California 
Air Resources Board is here.
    I'm submitting into the record four packets of material in 
support of this legislation. It begins with the governor of the 
State of California; the Air Resources Board; the California 
Environmental Protection Agency; all the California water 
agencies; the San Joaquin Valley Air Pollution Control 
District; the City of South Lake Tahoe; San Diego County Board 
of Supervisors; the East Bay Municipal Utilities District; the 
Santa Clara Valley Water District; the Ventura County Air 
Pollution Control Board; Amador County; the City of Santa 
Monica, which has 75 percent of its groundwater polluted; the 
county of Lake County; the California Independent Petroleum 
Association; and on and on.
    Senator Chafee. How does the American Legion stand on this?
    [Laughter.]
    Senator Feinstein. I think they'd be with us.
    Essentially, what this bill asks for is a waiver of the 
Federal 2 percent oxygenate requirement. It would provide, only 
if a State's reformulated gasoline rules achieve equal or 
greater emissions reductions than Federal regulations, a 
State's rule will take precedence.
    This bill would apply only to States which have received 
waivers under section 209(b)(1) of the Clean Air Act. 
California is the only State currently eligible for this 
waiver, and it allows us to set our own fuel standards. The 
other 49 States do not set their own fuel specifications.
    That's why it makes sense to give this waiver. I hope to 
make a case to show you that there are alternatives and that we 
can continue to make the emissions reductions.
    The current Federal Clean Air Act requires that 
reformulated gasoline contain this minimum 2 percent. Our bill 
would give gasoline manufacturers the flexibility, or even 
eliminate the use of MTBE, as long as the equivalent or greater 
emissions reductions are achieved.
    In 1991, a year after the 1990 amendments to the Federal 
Clean Air Act that imposed the oxygenate requirements, the 
California Air Resources Board established its own rules, which 
became effective in 1996, for reformulated gasoline when the 
Air Resources Board determined that Federal rules would not 
provide sufficient clean air benefits to the State to meet the 
Federal ozone standards.
    California's clean-burning gasoline, as I'm sure my 
colleague has said, provides about twice the air quality 
benefits of Federal reformulated gasoline. That's according to 
the California Air Resources Board.
    In 1994, the Air Resources Board approved use of a 
predictive model, which is a performance-based program that 
allows refiners to use innovative fuel formulations to meet 
clean air requirements. The predictive model requires gasoline 
to meet State standards which provide twice the clean air 
benefits required by the Federal Government.
    With this model, refiners can make cleaner-burning gasoline 
with 1 percent oxygen or no oxygen at all.
    Incredibly, the Federal law prevents refiners from selling 
the northern California gasoline with reduced or no oxygenates 
in southern California, even though the northern California 
gasoline provides twice the clean air benefits required by the 
Federal Government.
    Mr. Dunlap has told me that California's reformulated 
gasoline requirements have reduced air pollutants by 30 percent 
and ozone precursors--hydrocarbons and nitrogen oxides--by 17 
percent. Ozone has been reduced by 10 percent in northern 
California and 18 percent in Los Angeles. Benzene levels have 
dropped more than 50 percent.
    Our program has had the effect of removing 3.5 million cars 
out of the 24 million on the road in terms of reduced 
emissions.
    Now, let me speak for a moment. Can gasoline companies make 
clean air gas without MTBE? Chevron Products Company wrote to 
me on September 11, 1998--and I'd ask that this letter be 
included in the record--and said, ``We believe it is possible 
to replace gasoline which currently contains MTBE with a 
combination of ethanol-blended gasoline and non-oxygenated 
gasolines while maintaining the clean air benefits that the 
California cleaner burning gasoline program has provided.''
    I asked Chevron, ``Can California gasoline be made without 
MTBE but preserve emission benefits?'' Chevron responded as 
follows. ``Yes, California allows the sale of a wide variety of 
gasoline formulations without oxygenates, as long as they 
produce the same emissions reductions as a carefully-designed 
base gasoline. As discussed above, this has been done at 
Chevron's Richmond refinery.''
    Formulations that do not show equivalent or better 
emissions performance are not allowed. This is a pure 
performance standard. Oxygen is not required, per se. Were 
there no Federal oxygen requirement, much but not all of a 
refiner's CBG could be made without MTBE by using ethanol or no 
oxygenate at all. However, not all MTBE can be eliminated year-
round without some increased flexibility in California 
regulations.
    I believe Mr. Dunlap will testify that the board is 
prepared to do that. This can be accomplished without 
jeopardizing the emissions benefits.
    Senator Chafee. We've got as a witness Mr. Jessel, who is 
the senior fuels specialist of Chevron.
    Senator Feinstein. Excellent. Well then let me skip the 
rest of that.
    Senator Chafee. All right.
    Senator Feinstein. Now let me talk for a moment about the 
problem. The problem is drinking water contamination. It is 
wrong to clean the air by polluting the groundwater. 
Contamination of California's drinking water by MTBE is 
becoming a serious problem. In higher concentrations, it smells 
like turpentine and it tastes like paint thinner. It can make 
drinking water simply undrinkable.
    MTBE is a highly-soluble organic compound. It moves quickly 
through soil and gravel. It poses a more rapid threat to water 
supplies than other constituents of gasoline when leaks occur. 
It is easily traced, but it is difficult and expensive to clean 
up.
    The Association of California Water Agencies estimates that 
it would cost as much as $1 million per well to install 
treatment technology to remove MTBE from drinking water. 
Without these funds, the only option is to shut down wells.
    A June 11 Lawrence Livermore National Laboratory study 
reached five important conclusions.
    The first is that MTBE today is a frequent and widespread 
contaminant in shallow groundwater throughout California. There 
are presently 32,400 leaking underground fuel tanks recognized 
in the State, in 13,000 of which hydrocarbons are known to have 
impacted the groundwater. The minimum estimate of the number of 
MTBE-impacted sites in California is greater than 10,000.
    Two, MTBE plumes are more mobile than benzene plumes. 
Therefore, MTBE moves quickly to infiltrate groundwater.
    Three, the primary attenuation mechanism for MTBE is 
dispersion.
    Four, ``MTBE has the potential to impact regional 
groundwater resources and may present a cumulative 
contamination hazard.'' That's a quote.
    Five, we have identified two major areas of uncertainty in 
our results. First, presently available MTBE data are limited. 
Second, the issue of recalcitrants of MTBE has not been 
resolved.
    Senator Chafee. Senator, I wonder if perhaps you might 
summarize the balance of your statement as you go along.
    Senator Feinstein. I will.
    Senator Chafee. We do have quite a few witnesses.
    Senator Feinstein. Let me just tell you what the major 
contamination problems are.
    Santa Monica has lost 75 percent of its groundwater. South 
Lake Tahoe, the Santa Clara Valley, the Great Water Company, 
and Sacramento, the Fruitridge Vista Water Company--drinking 
wells in each of these cities have been shut down because of 
MTBE contamination.
    Now, Californians are more dependent on groundwater as a 
source of drinking water than most Americans. Of California's 
population, 69 percent of the population relies on groundwater 
as their source of drinking, while for the U.S. population at 
large, 53 percent depends on groundwater. So we have just about 
20 million people--well, more than that--dependent on this 
groundwater which is rapidly becoming polluted.
    We will submit to you the reservoirs that are now being 
polluted throughout the State.
    What is the solution? First, California is the only State 
that has this waiver. We have stricter standards. The ARB will 
tell you we can meet the emissions standards of Federal law 
without using MTBE. The groundwater is being polluted. This is 
unacceptable.
    Therefore, we ask this committee to send out for a vote 
before the full Senate this bill and hold us to our word, 
because I believe that the California Air Resources Board is on 
this in a very comprehensive and substantial way, and you will 
see no deleterious effects on our air if this bill.
    I thank you, Mr. Chairman.
    Senator Chafee. Thank you. I've just got a couple of 
questions for both of you.
    What's the status of this in the House, Mr. Bilbray?
    Mr. Bilbray. Mr. Chairman, we have held a hearing on the 
item on Earth Day. Basically, the interest was to examine the 
bill at this hearing and see if there can be a consensus 
between the two chairmen of the subcommittees and the full 
committees to consider if we can move this bill.
    Senator Chafee. Okay. Now, as I get the problem, whereas 
MTBE does a lot of good things, as Senator Feinstein 
delineated, what comes of it when it gets in the drinking 
water--and does it get into the drinking water primarily 
through the leaking underground storage tanks, or is it when it 
is burned, when it comes out of an automobile it goes in the 
air and then comes down in the water? Is it solely through the 
leaking underground storage tanks?
    Senator Feinstein. That's one. In South Lake Tahoe they 
would tell you it is from two-stroke engines, jet skis, which 
have permeated now that groundwater. They are in the process of 
going through the necessary protocols to shut down two-stroke 
jet skis. In essence----
    Senator Chafee. That would be a step ahead, by itself, I 
think.
    Senator Feinstein. Yes. It is in reservoirs now, and I 
would--from that comes also----
    Senator Chafee. From surface uses----
    Senator Feinstein. From some surface use, and also the 
prime source, I think it would be fair to say, are the 
underground storage tanks.
    Mr. Bilbray. Noncombusted residue is what it is. It's a 
blow-by of the two-cycle engine. It ends up being the leaking 
situation. Once burned, it is not a problem.
    Senator Chafee. Principally from the leaking?
    Senator Feinstein. That's right.
    Senator Chafee. Yes. Well, I think you make a very good 
case. We look forward to hearing the witnesses that follow you. 
California obviously has really tacked this situation, tackled 
the whole clean air situation. As I said many times, as 
California goes, so goes the Nation, what you do in taking the 
lead.
    I suppose we'll get into problems of--in my opening 
statement I talked about a patchwork system across the Nation, 
different States having different requirements. And this 
would--this legislation would only apply to California, remove 
the 2 percent oxygenate additive, whereas the other States 
would continue with that. So I don't know what that does as a 
refinery problem. That's a problem we'll ask Mr. Jessel.
    It was interesting, what you had to say. I guess it was 
you, Mr. Bilbray, that said your production facilities in 
northern California should be able to come down to southern 
California.
    Mr. Bilbray. The Senator actually pointed it out, but I 
made the original motion, Mr. Chairman, on the Air Resources 
Board to implement the clean air reformulated gasoline 
regulation back when I was on the board.
    But you talk about patchwork? We have two different sets of 
rules for one State right now. We're trying to make that into a 
common sense standard. And that is what we're asking to do with 
this bill.
    California, again, has always been separate in this regard 
from the other 49 States under the Clean Air Act. I ask you, in 
closing, just to remember one thing that we said back in the 
1960's and the 1970's on environmental issues. With this bill, 
we want to make sure that this is not going--this bill will not 
eliminate all our problems or be a panacea, but it will be part 
of the solution and move us in the right direction.
    The old term we used in the 1960's and the 1970's--and you 
probably remember the environmental community saying this--if 
you're not part of the solution, you're part of the problem. We 
want the Federal regulations to stop being part of the problem 
and modify them and make them part of the solution for 
addressing this issue, and with your help we'll be able to do 
that.
    Senator Chafee. Okay. Do either of you have anything 
further you would like to add?
    Senator Feinstein. No, but I'd like to provide this 
material for the committee's record.
    Senator Chafee. Right. And, Mr. Bilbray, you asked for 
something to be put in the record, as well.
    Mr. Bilbray. We'll have the letters from the Air Resources 
Board and from the Air Pollution Professionals of California 
and from the health associations that support this bill.
    Senator Chafee. Okay. Fine. Thank you both very much for 
testifying.
    Senator Feinstein. Thank you.
    Mr. Bilbray. Thank you very much.
    Senator Chafee. We appreciate it.
    And now, Mr. Sullivan, commercial of the Maine Department 
of Environmental Conservation, and Mr. Daniel Greenbaum, 
president, Health Effects Institute of Cambridge--if you 
gentlemen will please come forward.
    I can say to Mr. Sullivan that I spend my summers in Maine. 
My father was born in Maine, so I've always had a deep 
attachment to the State of Maine.
    Now, Mr. Dunlap, why don't you proceed?

   STATEMENT OF JOHN D. DUNLAP III, CHAIRMAN, CALIFORNIA AIR 
            RESOURCES BOARD, SACRAMENTO, CALIFORNIA

    Mr. Dunlap. Mr. Chairman, thank you.
    Senator Chafee. You're much younger looking than I 
expected. This is such an all-pervasive organization there, the 
California Air Resources Board.
    Mr. Dunlap. Well, I've been before you before and I haven't 
aged much. You've been kind. I'm at least grateful for that.
    Senator Chafee. At least it hasn't been an aging process 
for you. All right. Go to it.
    Mr. Dunlap. Okay. It is a pleasure to be with you today.
    Both of our Congressional representatives did a terrific 
job at outlining some of the benefits, so I'll do my best not 
to be redundant--the benefits, that is, of the cleaner-burning 
gasoline program.
    My administration supports S. 1576, which we believe would 
enable California's cleaner-burning gasoline program to reduce 
its dependence on MTBE and other oxygenated gasoline additives. 
As the only State--and it has been said several times--with its 
own gasoline program, we are in a unique legal and 
institutional position to be a proving ground for what can be 
accomplished nationally with a performance-based environmental 
program.
    S. 1576 represents an opportunity for the entire Nation to 
observe the outcome of California's trailblazing efforts. We 
also believe this bill can help California respond rationally 
and effectively to public concern over MTBE. If we are 
successful, the Federal Government would benefit from our 
experience with a market-oriented and performance-based 
approach. For these reasons, it is our belief that Congress 
ought to quickly pass S. 1576 and Representative Bilbray's H.R. 
630, rather than waiting many months or even years to craft 
controversial national changes to the Federal oxygenate 
program.
    I will highlight a couple points about the performance. 
We're very proud of our cleaner-burning gasoline program. 
Senator Feinstein indicated we saw very large improvements in 
air quality the first year of its implementation--10 percent 
improvement in smog levels in Los Angeles and about 12 percent 
in Sacramento. That is the largest improvement. It's the 
largest single control measure we've ever had in California's 
50-year history of controlling air pollution, so it has been a 
terrific success.
    And yet, this success has been overshadowed by public 
concern over the use of MTBE the meet Federal requirements for 
the addition of oxygen in gasoline.
    In 1990, the Congress approved an amendment to the Federal 
Clean Air Act mandating the use of gasoline containing 2 
percent oxygen by weight in regions classified as being severe 
or nonattainment for the Federal ozone standard, and to remain 
in compliance with this Federal requirement, about 70 percent 
of the gasoline used in California during a given year must 
contain this 2 percent oxygen by weight year round with no 
exceptions. This includes gasoline used in the greater L.A. 
area, Ventura County, San Diego, and in the Sacramento area.
    In 1991, the year following the Federal Clean Air Act 
amendments, our board established its own cleaner-burning 
gasoline specs. We went ahead with these specifications because 
we determined that Federal reformulated gasoline would not 
provide sufficient clean air benefits to enable California to 
attain the Federal ozone standard.
    As has been said, California's gasoline provides about 
twice the air quality benefits of Federal reformulated 
gasoline.
    The Board has always viewed gasoline oxygenates such as 
MTBE as an important option that should be available to 
refiners for making cleaner-burning petroleum products. At the 
same time, it is possible to make commercial quantities of 
cleaner-burning gasoline without mandated levels of oxygenated 
additives.
    We believe strongly that Federal and State law should set 
content-neutral performance standards for refiners to meet, 
rather than prescribing oxygen levels.
    However, given the fact that most California gasoline was 
subject to the Federal oxygen requirements, the Board felt, in 
1991, compelled to include the Federal oxygen requirements in 
its cleaner-burning gasoline specs. Thus, California was 
committed to the use of oxygenated gasoline in order to remain 
consistent with the requirements of the Federal Clean Air Act.
    The story does not end there, however, in 1994, California 
added flexibility to its gasoline regulations by approving the 
use of a predictive model. This model was developed by our 
Board with data from emissions tests involving a large number 
of motor vehicles and fuels, and it predicts emissions from 
various gasoline formulations.
    If a refiner wishes to produce gasoline that varies from 
the ARB fuel specs, including the oxygen requirement, it can do 
so provided that the predictive model indicates there will be 
no increase in emissions. The predictive model changed our 
cleaner-burning gasoline program from a command and control 
program based upon rigid fuel specs to a performance-based 
program in which refiners concentrate on meeting emission 
standards.
    Because of this model, refiners have incentives to develop 
innovative fuel formulations that offer advantages over 
conventional formulations.
    Refiners in northern California routinely use the 
predictive model to reduce the oxygen content of their 
gasoline. One refiner is now producing and selling a non-
oxygenated fuel. This is possible because the Federal oxygen 
requirement does not apply to most northern California 
gasoline.
    Senator Chafee. That is because they're in attainment?
    Mr. Dunlap. Correct. Not subject to the Federal 
requirement.
    Incredibly, the Federal oxygen rule prevents those refiners 
from selling the northern California gasoline with reduced or 
no oxygenates in southern California, even though the northern 
California gasoline provides twice the clean air benefits 
required by the Federal Government.
    The Federal oxygen rule severely limits the flexibility 
that our Board has been able to give refiners of California 
gasoline. As I pointed out, our predictive model still requires 
California gasoline to meet our State standards, which provides 
twice, as I said, the clean air benefits. The Federal oxygen 
rule may serve a purpose in the other 49 States which do not 
have their own fuel specs, but in California, a State in which 
we have our own comprehensive fuel standards, the Federal 
oxygen rule serves no useful purpose.
    As has been stated--and you've said so, yourself, Mr. 
Chairman--there is growing public concern over MTBE. No Federal 
or State law mandates the use of MTBE. The refiners have chosen 
to use MTBE in virtually all California gasoline because it 
represents the most practical way, by far, to meet the 
oxygenate requirement. Unfortunately, MTBE releases have 
severely impacted drinking water supplies, as has been stated.
    The concern is driven, in part, because the Federal oxygen 
rule gives refiners no viable alternative to the widespread use 
of MTBE in California. This has led many Californians to 
wrongly perceive that cleaner-burning gasoline represents a 
trade-off between clean air and clean water.
    Senator Chafee. I'm getting a little mixed up here. And I 
don't claim to be an expert in all of this. But couldn't they 
use ethanol instead of MTBE?
    Mr. Dunlap. Yes, and some have.
    Senator Chafee. In other words, it seems to me the real end 
of the piece is what happens to the MTBE if it gets out of a 
tank or from a two-cycle engine, or whatever it might be. And 
if that's all true, why wouldn't--is it less expensive? Why 
don't they try ethanol?
    Mr. Dunlap. As I mentioned, some have. I'll let my 
colleague go into those factors. But economics, availability, 
and the like--I've been told that if ethanol were to be used 
exclusively in the California fuel, all of it produced 
domestically wouldn't last a quarter to meet the California 
demand. My colleague, again, from Chevron can talk to some of 
that.
    Senator Chafee. Okay.
    Mr. Dunlap. I am not suggesting that S. 1576 will prevent 
MTBE releases into water. California's underground tank upgrade 
program is the primary measure for protecting water from 
contamination from all fuel components.
    I'm also not suggesting that S. 1576 represents a ban or 
restriction on the use of MTBE. Here, again, let me emphasize 
that the bill is content neutral. MTBE should remain an option 
for all refiners. But the key word here is ``option.'' There is 
no inherent reason why cleaner-burning gasoline must have 2 
percent MTBE or any oxygenate by weight. California refiners 
have shown that it is possible to make cleaner-burning gasoline 
with 1 percent oxygen, and even no oxygen at all.
    By exempting California from the Federal oxygen rule, S. 
1576 would give refiners the option of reducing the MTBE 
content of their gas throughout California and the bill would 
give refiners more options for using other oxygenates such as 
ethanol.
    Senator Chafee. I would ask, Mr. Dunlap--we're trying to 
give everybody equal time here, so if you could summarize your 
last couple of pages.
    Mr. Dunlap. I will conclude with this. As long as 
California is subject to the Federal oxygen rule, our ability 
to respond to MTBE concerns will be severely limited. The 
burden of addressing the growing unease over MTBE in California 
and other States will come full force to the Nation's capital, 
we believe, and it will remain here in the Nation's capital.
    So it is our belief that we think these two bills will 
present an opportunity not just for California but for the 
entire country.
    So I thank you for your attention. I would be happy to 
answer any questions at the right time.
    Senator Chafee. All right. We'll save the questions until 
the panel is completed.
    Mr. Sullivan? And, if you could keep your remarks to around 
5 minutes--when the red light comes on, that's time to wind it 
up if you would.

 STATEMENT OF NED SULLIVAN, COMMISSIONER, MAINE DEPARTMENT OF 
           ENVIRONMENTAL CONSERVATION, AUGUSTA, MAINE

    Mr. Sullivan. Thank you, Mr. Chairman. I appreciate the 
opportunity to speak. I'm Ned Sullivan, Commissioner of the 
Maine Department of Environmental Protection, and I'm pleased 
to come before you to share Maine's experience with Federal 
reformulated gasoline and with the oxygenate MTBE.
    Governor Angus King sends his regards to welcome you to the 
State any time, and he says he's working on the visual line 
from bridges, which I think is an issue of interest.
    Senator Chafee. That's very encouraging. I won't go into 
that now.
    [Laughter.]
    Senator Chafee. Go ahead, Mr. Sullivan.
    Mr. Sullivan. He wanted me to let you know that he's hard 
at work on this matter.
    Senator Chafee. Good. I appropriate that. I'll tell people 
what that is.
    [Laughter.]
    Senator Chafee. If you're designing a bridge, you want the 
bridge so that the railing on the side of the bridge doesn't 
just come right across your line of vision so you can't see the 
beautiful bay, river, whatever is out there. And they'll always 
tell you, ``Federal rules prevent it.'' Baloney. You can get 
that railing so it doesn't come right where your eyesight is.
    They're building a new bridge in Maine up close to where we 
go, and I just spoke to the governor about having the railing 
so that you can see the water. The fact he remembered it 
greatly impressed me.
    [Laughter.]
    Mr. Sullivan. Mr. Chairman, the Clean Air Act amendments of 
1990 require that reformulated gas be sold in the Nation's 
worst ozone nonattainment areas. The law also allows a State 
with lesser ozone problems, like Maine, to opt into the 
program. However, once in the program, only the Federal fuel 
may be sold in that area.
    Since 1995, seven counties in southern Maine have been in 
the Federal reform program. I would mention that Governor 
McKernan, who initiated Maine's participation in the program, 
asked that it be sold State-wide, but was told by EPA that it 
could only be sold in areas that are in nonattainment with the 
ozone standard, so we have a fractured State in terms of our 
fuel supply.
    The RFG blend that is sold in Maine is the same as that 
sold in 11 northeastern States and the District of Columbia. As 
required by Federal law, it must contain at least 2 percent 
oxygen, accomplished in the northeast primarily, if not 
exclusively, by adding the oxygenate MTBE.
    The RFT program accounts for nearly one-third of the 
hydrocarbon emission reductions that Maine's southern counties 
are required to achieve under the Clean Air Act.
    The good news is that air quality in Maine, as in 
California and other parts of the country, has improved since 
the program began. We have seen a steady downward trend in the 
number of days that the monitored ozone levels exceed the 
Federal 1-hour standard, despite a slight increase in average 
temperature which we've experienced in the State, which would 
otherwise be expected to trigger additional exceedences of that 
standard. There is a chart in the back of my testimony that 
demonstrates that.
    The improved air quality has been recognized by EPA, which 
has revoked the 1-hour standard in four of the counties, 
effectively putting them into attainment for that standard.
    In addition, we have monitored a reduction in the toxic 
compounds in our ambient air. As you know, Mr. Chairman, motor 
vehicles are estimated to account for roughly 50 percent of all 
cancers associated with exposure to air toxics; however, RFG 
burns more cleanly and more completely destroys toxic 
components of gasoline. But, more to the point today, MTBE 
replaces some of the cancer-causing benzene in conventional 
gasoline.
    The first round of monitoring since RFG has been in use in 
Maine has shown more than a 20 percent reduction in benzene 
levels in ambient air, and there is a chart in my statement 
that demonstrates that.
    So we are pleased with the progress. I also have--and I 
will provide you a copy of this--a recent report issued by 
NESCAUM on relative cancer risk of reformulated gasoline and 
conventional gasoline sold in the northeast, which shows a 
roughly 12 percent reduction in cancer-related risk comparing 
RFG with conventional gasoline.
    Despite these benefits, Maine people have been concerned 
about RFG use since the program was implemented due to concerns 
about health risk, cost, and vehicle performance.
    In every State legislative session since January 1995, a 
bill has been introduced to terminate Maine's RFG program. In 
every instance, the primary argument against the program has 
been the health and environmental risk that some associated 
with MTBE.
    The resulting debates and calls for additional studies have 
enabled the program to continue as a key component of Maine's 
clean air plan, albeit it with shaky support.
    We have established a health-based standard for MTBE in 
drinking water of 35 parts per billion. That was affirmed by 
the Maine State Legislature last year.
    Maine has been monitoring groundwater for some time and has 
found MTBE in our groundwater since 1985, primarily in 
association with leaking underground storage tanks. We have 
almost completed our underground storage tank replacement 
program. We've replaced some 30,000 underground tanks, or 98 
percent of them. So we're doing what is necessary to address 
that aspect of the problem.
    But public concern about MTBE in groundwater heightened 
sharply this past spring as a string of contamination events 
focused even more attention on the potential for MTBE 
contamination of Maine's groundwater. We had three specific 
incidents--one associated with a new state-of-the-art gas 
station which had only been pumping gas for a few months, 
roughly 1,000 feet from two public water supplies that served 
some 3,000 customers in a growing community in southern Maine, 
North Wyndham.
    MTBE was detected at trace levels in those wells, but at 
very high levels at the gas station--some 7,000 parts per 
billion--and at almost 500 parts per billion at a monitoring 
well just a couple of hundred feet away from the public water 
supply.
    We've managed to keep the levels down at that public water 
supply, but the looming threat just up-gradient from there has 
really sent strong waves of concern throughout that community 
and the State.
    Similarly, in May private wells were contaminated by MTBE 
in an adjoining town. Some 24 wells have detectable MTBE, 11 of 
those above our action level.
    Senator Chafee. I would ask that you summarize the last 
couple of pages if you would, Mr. Sullivan.
    Mr. Sullivan. Yes, sir. I will.
    We believe that a car accident resulting in a small 
quantity of gasoline spilled caused that, as well as 
contamination of an elementary school well in another community 
in a completely different part of the State.
    So what we find ourself with, Mr. Chairman, is a bit of a 
conundrum. We are very pleased with the air quality benefits of 
reformulated gas, but we are concerned about the potential risk 
to groundwater.
    Governor King has ordered testing of 1,000 wells in the 
State and all public drinking water supplies to determine the 
extent of the contamination problem. The results of that study 
will be available at the end of this month.
    Furthermore, he has directed us to look at alternatives. 
But, as we've spoken to the refiners, they've indicated that 
the fact that they have to include MTBE or other oxygenates in 
the fuel that they provide to virtually the entire northeast 
limits their ability to go to alternative fuels, like a low RVP 
fuel that could achieve the same ozone-related benefits. This 
is an obstacle to their meeting what may be a market demand in 
Maine, a strong market demand for a clean-burning fuel that 
doesn't contain MTBE.
    So I would urge you and the committee to consider 
legislation that would eliminate the mandate for an oxygenate 
requirement in fuel throughout the country, or in areas that 
move forward with an alternative that achieves the necessary 
air pollution goals that we have in Maine and that are mandated 
by the Federal Clean Air Act.
    Thank you very much.
    Senator Chafee. Thank you, Mr. Sullivan.
    Senator Chafee. What we'll do is we'll hear from Mr. 
Greenbaum and then have questions for the panel.
    Mr. Greenbaum?

  STATEMENT OF DANIEL S. GREENBAUM, PRESIDENT, HEALTH EFFECTS 
              INSTITUTE, CAMBRIDGE, MASSACHUSETTS

    Mr. Greenbaum. Mr. Chairman, good afternoon and thank you 
for the opportunity to testify. I'm honored to have the chance 
to appear in front of you, having spent 6 years as the 
Commissioner of Environmental Protection in the neighboring 
State of Massachusetts, and having lived to tell about it, I'm 
well aware of your dedication to environmental protection, 
probably most notably through your regular reminders to me 
during my tenure that the vast majority of the pollutants 
finding their way into the Blackstone River and into 
Narragansett Bay were not from Rhode Island but were from 
Massachusetts, and our trying to do something about that.
    But I am pleased this afternoon to have the opportunity to 
present the views of the Health Effects Institute on the health 
effects of MTBE in gasoline.
    For the record, HEI is an independent, not-for-profit 
research institute funded jointly by USEPA and the motor 
vehicle industry to provide high-quality and impartial science 
on the health effects of air pollution.
    We have been engaged in scientific assessment and research 
on MTBE for several years, and in 1995 and 1996, at the request 
of the White House Office of Science and Technology Policy, and 
of the EPA administrator, we convened an expert panel to review 
all existing science on exposure to and health effects from the 
addition of MTBE and ethanol to gasoline.
    In April 1996, this panel, which consisted of experts in 
toxicology, epidemiology, cancer, reproduction and development, 
and exposure, and was chaired by the former director of the 
National Cancer Institute, Dr. Arthur Upton, issued the report 
of its 9-month review of over 300 individual studies of MTBE 
and ethanol.
    The study found that there were some potential short-term 
and cancer health effects for MTBE, but that there were not 
likely to be any health effects from ethanol at the levels to 
which most people would be exposed. When the committee then 
placed the MTBE effects in the context of the effects of 
exposure that we know about from gasoline, itself, without 
oxygenates, they concluded three things.
    First, that the potential health effects of exposure to 
conventional gasoline without oxygenates includes many effects 
that are similar to those that could result from exposure to 
gasoline with oxygenates.
    Second, that adding oxygenates to gasoline can reduce the 
emission of some pollutants, such as carbon monoxide and 
benzene from motor vehicles, while at the same time increasing 
some exposure to aldehydes and to the oxygenates, themselves.
    Finally, looking at the overall situation, they concluded 
that adding oxygenates is unlikely to substantially increase 
the health risks associated with fuel used in motor vehicles; 
hence, the potential health risks of oxygenates are not 
sufficient to warrant an immediate reduction in oxygenate use 
at this time.
    Now, for the committee's benefit, I have attached to my 
testimony a copy of the report's executive summary and a list 
of the members of the committee, and we have also provided a 
full copy of the report to your staff.
    Following the release of this report, research and analysis 
continued on several fronts. In June 1997 the Office of Science 
and Technology Policy issued its inter-agency report, the 
results of a more comprehensive review of oxygenates, and this 
review, which incorporated the HEI findings, drew similar 
conclusions to those of HEI.
    It also conducted a preliminary quantitative risk 
assessment for MTBE based on animal cancer data and concluded 
that ``the estimated upper-bound cancer risks for MTBE are 
similar to or slightly less than those for fully-vaporized 
conventional gasoline, substantially less than that for 
benzene, a minor constituent in gasoline that is classified as 
a known human carcinogen, and more than 100 times less than 
that for one-three butadiene, a carcinogenic emission product 
of fuel combustion.''
    Earlier this year another group, the World Health 
Organization, issued its own environmental health criteria for 
MTBE. They, too, reached many conclusions similar to those of 
HEI and the inter-agency report.
    Now, that's not to say, having done these reviews, that 
everybody thought we had answered all the questions. And if 
you've got a group of scientists in a room, they will always 
say we need to do more research. Certainly in this case there 
were needs identified for additional research, and, following 
up on that, we at HEI, those in industry, in response to EPA 
requirements under section 211 under the Clean Air Act, and 
other government agencies have gone forward to answer a number 
of key questions.
    In addition, given the recent concerns--not the recent 
concerns, but the concerns about drinking water, both the State 
of California and USEPA are pursuing additional research on the 
effects in water supplies.
    I should note that these studies are underway, some of them 
not quite underway, but we have not seen a lot of new data in 
the last couple of years since our review. We expect these 
studies to provide new information over the next 12 to 18 
months.
    Both our report and the inter-agency report identified 
reports of water contamination as a concern. The inter-agency 
report also noted that MTBE appears to move faster in 
groundwater and is more resistant to biodegradation than other 
components of gasoline.
    In response to these concerns, there has been an increase 
in the sampling of water supplies for MTBE, as we've been 
hearing about some of that here today.
    To date, not surprisingly to any of us who have had to run 
safe drinking water programs, MTBE has not been detected in the 
majority of wells. In fact, it has been detected at all in a 
relatively small number of the water sources, and, of those 
where it is detected, relatively few have levels above existing 
or proposed levels of concern. And that's not to diminish those 
concerns where there have been problems, because there have 
been real problems.
    Senator Chafee. I missed, Mr. Greenbaum, where you were 
talking about when you said, I guess, the number of water 
sources that were contaminated. Did you say it's probably 
limited? Where?
    Mr. Greenbaum. Well, for example--and I don't have the 
absolute most recent data, but I've seen both February and 
April data from the surveys of water sources in the State of 
California from the Department of Health Services. In February, 
of some 2,600 water sources that have been tested, 1.3 percent 
of them had MTBE detected in them, some 34. And some of those 
had very high levels, the Santa Monica wells obviously being 
among those.
    And so there are serious concerns in those locations, but I 
think, not surprisingly for those of us who have had to run 
safe drinking water programs, those wells tend to be located in 
places where you wouldn't expect them to be--close to 
underground storage tanks, close to contamination areas--and I 
think I would be particularly upset if you saw a high 
percentage of wells that were supposedly carefully sited 
contaminated by any of these things.
    However, there are some subset of the wells--where there 
were levels of MTBE, and some part of those where the levels 
were sufficient enough to shut down the wells.
    So what I was suggesting was that the contamination to date 
doesn't appear to have been widespread, but that it continues 
to be of concern and regular monitoring, particularly of wells 
located near sources such as underground storage tanks may be 
appropriate, and that was the point I was trying to make about 
that.
    Given your time limitations, in closing let me thank the 
committee for this opportunity to testify and to say that I'd 
be pleased to answer any questions about what I've said or the 
other details that I have provided in my background material.
    Senator Chafee. What you seem to be saying, if I understand 
it, Mr. Greenbaum, is that, whereas there are indications--
let's take California. There are indications of leakage and 
this water getting in their plumes and getting into wells, one, 
that your research has indicated that it's not as serious 
health-wise as perhaps has been portrayed. Is that correct?
    Mr. Greenbaum. Well, I was suggesting that the extent of 
contamination is not as serious as perhaps has been portrayed. 
All the wells haven't been tested, but, to date, the numbers 
that have been found are not that high.
    I'm not suggesting that, once a well is contaminated, that 
there is not a health concern. There is a health concern, and 
both EPA and California and other bodies have established 
initial guidelines, and in some cases standards, for what is 
considered a relatively safe level and what is not.
    And some number of wells, a relatively small number, have 
been contaminated at levels well above the levels that are 
considered safe.
    Senator Chafee. I was astonished--and Mr. Sullivan spoke of 
what they've done in Maine. He said they've removed more than 
30,000, or 98 percent of the underground storage tanks. That's 
an incredible figure.
    Now, obviously, they did that because they thought that, to 
start with, I presume these are leaking. That's why you 
replaced them; is that right?
    Mr. Sullivan. Mr. Chairman, it's part of both State and 
Federal programs to replace the bare steel tanks with more 
state-of-the-art facilities that have leak detection, double 
walls, and that type of thing. So Maine's deadline is earlier 
than the Federal deadline, so we're ahead of most other States 
in achieving that.
    And we have seen MTBE for some time associated with 
gasoline leaks, but I think the trend that I wanted to note to 
you was that we're seeing it not just associated with leaking 
underground tanks, but with fairly limited quantities spilled. 
A car overturns, a state-of-the-art gas station that has only 
been in operation for 3 months with every bell and whistle that 
we could require, and we haven't even found the source at that 
gas station. It remains closed because of its proximity to a 
major water supply.
    So we're seeing a new trend that is of concern that may 
not--that indicates that small quantities of the product may be 
causing contamination in a larger area than other constituents 
of gasoline that we'd otherwise be more concerned about.
    Senator Chafee. Mr. Dunlap, what do you say about what Mr. 
Greenbaum has to say? He seemed to me to be suggesting that the 
health concerns were somewhat exaggerated.
    Mr. Dunlap. This year----
    Senator Chafee. Is that an unfair characterization?
    Mr. Greenbaum. I think there are health concerns. I think 
it was just the extent of them.
    Senator Chafee. All right. The extent. The testimony we've 
had here from the California people and yourself is that these 
have cited Santa Monica and different communities with great 
prevalence of MTBE getting in the water.
    Mr. Dunlap. Yes. I think, first of all, we have a high 
regard for HEI and have worked with them and we're planning on 
working with them on some other issues, as well, so we would 
agree with that characterization.
    However, we're doing our own work in California. Our 
Department of Health Services, in concert with the UC system, 
is doing kind of a cradle-to-grave workup analysis on the 
impact of MTBE in the environment, and that's going to be 
urging from this review some time around the first of the year.
    But, Mr. Chairman, we're very concerned and wish to be as 
proactive as possible, and these two bills, in particular, have 
great appeal to us because we have confidence in a refiner's 
ability to do things differently. As a matter of fact, if you 
had asked me 10 years ago if I thought gasoline could be 
reformulated in a way to allow it to continue to meet very 
aggressive clean air standards, I wouldn't have thought they 
could have done it. They can do remarkable things.
    And what this will do is provide--these two bills would 
provide an option for refineries to try to make the product in 
a way that it's the same environmental benefit, but protects a 
very important and essential resource.
    Mr. Chairman, if I might, I don't want to interrupt your 
train of thought----
    Senator Chafee. No. Go ahead.
    Mr. Dunlap. There is a letter I'd like to have added to the 
record from me and a colleague of mine, the chairman of our 
State Energy Commission, to chairman Bilirakis on the 
Subcommittee on Health and the Environment in the House talking 
about some--responding to some things that the Department of 
Energy asserted in their testimony on the Bilbray legislation 
in April.
    Senator Chafee. Okay. Fine. That would be good to submit 
that.
    Mr. Sullivan, in effect, would you like Maine to get--
you've been here for the afternoon. You've heard the testimony. 
Would you like Maine to get the same proposal that California 
is suggesting?
    Mr. Sullivan. Yes, Mr. Chairman. That is what I came here 
to testify to--that we think in Maine that flexibility would be 
a positive development in Federal law.
    Tell the refiners what are the environmental and health 
goals that they have to achieve--limitations on volatile 
organic compounds, levels of toxics, that type of thing--but 
don't tell them that they have to include 2 percent oxygenate.
    We have, as I mentioned, been talking to the refiners about 
alternatives that might be provided in Maine to RFG. We want to 
maintain our progress on clean air. We're very committed to the 
goals of the region in achieving the the existing and the new 
ozone standard. But the refiners have said, ``Sorry. Everybody 
is buying reform. Reform has MTBE. That's what Maine is going 
to get.''
    We think some have indicated a willingness to work toward 
flexibility if they could get some relief from Federal 
requirements.
    Senator Chafee. Mr. Dunlap, I thought a very telling 
point--I believe it was made by Senator Feinstein--following up 
on what Mr. Sullivan says, is what you folks want is a 
performance-based standard rather than a standard based on 
certain criteria that have emanated from here, from Washington. 
Is that about it?
    Mr. Dunlap. Yes. That's true, again, because of the ability 
the refiners have to meet the standards without an oxygenate or 
less of an oxygenate than is required. We think they ought to 
be given the opportunity to do that.
    And we have, as you imagine, an awful lot of technical 
discussions. We have some very talented people in the State 
bureaucracy that look at these things, and I can assure you 
that we're not going to allow any kind of a slippage in 
emissions reductions. We can't afford to do it. We need the 
tons from this source, and we're going to make sure that we get 
them.
    I want to just make sure people don't have a false 
impression that we're going to loosen a standard or give people 
the ability to emit more. We are not.
    Senator Chafee. Okay, gentlemen. Thank you all very much 
for coming here. Some of you have come a considerable 
distance--well, all of you have, particularly Mr. Dunlap. So 
thank you for coming.
    Mr. Sullivan. Mr. Chairman, may I ask one minor point?
    Senator Chafee. Yes.
    Mr. Sullivan. You asked about ethanol in California, and I 
just wanted to note that we have found very limited ethanol 
available in the northeast, and none of the major refiners or 
suppliers have indicated that they would provide ethanol as an 
alternative to MTBE as the oxygenate in the northeast.
    Senator Chafee. They have not indicated?
    Mr. Sullivan. They have indicated they would not.
    Senator Chafee. They would not.
    Mr. Sullivan. That they are adverse to that idea. Just one 
more factor.
    Thank you very much for the opportunity.
    Senator Chafee. Please give my regards to Governor King.
    Mr. Sullivan. I will.
    Senator Chafee. Thank him for his retentive memory.
    Now, Mr. Jessel, senior fuels specialist at Chevron, and 
Mr. Douglas Durante, executive director, Clean Fuels 
Development Coalition of Arlington, Virginia. If you gentlemen 
would come forward, we'd appreciate it.
    All right, Mr. Jessel. Your company has been mentioned 
several times here. I believe Senator Feinstein has had 
discussions with your officials, and we welcome you here.

   STATEMENT OF AL JESSEL, SENIOR FUELS SPECIALIST, CHEVRON 
          PRODUCTS COMPANY, SAN FRANCISCO, CALIFORNIA

    Mr. Jessell. Thank you very much, Mr. Chairman.
    I do come from an area with three bridges, from which none 
can you see the water, and I never realized how big a public 
policy issue that is until I heard you speak of it today. Boy, 
I'm going to start writing letters, myself.
    Senator Chafee. The best time to catch them is when they're 
building the bridges.
    Mr. Jessell. Well, we're about to rebuild one of them.
    Senator Chafee. And they'll give you every excuse in the 
world. You've got to be ready for that. ``Oh, no. can't do it. 
It's Federal rules.'' It's not so.
    [Laughter.]
    Mr. Jessell. Thank you for your advice, Mr. Chairman.
    It is my pleasure to be here before the committee today to 
testify in support of S. 1576. My name is Al Jessel. I'm a 
senior fuels specialist at Chevron Products Company, which is 
the largest producer of California reformulated gasoline.
    Chevron supports S. 1576, introduced by Senator Feinstein, 
and similar legislation, H.R. 630, introduced by Congressman 
Bilbray and co-sponsored by 48 Members of the California 
delegation in the House of Representatives.
    This legislation would remove the overlapping requirements 
of the Federal reformulated gasoline over the California 
reformulated gasoline program. I hope that after you hear the 
discussion today and give this legislation its due 
consideration you will move it through the Senate Environment 
and Public Works Committee and support its enactment into law.
    In recognizing the serious and unique air quality concerns 
in the State of California, Congress allowed California 
authority to regulate fuels in the 1970 Clean Air Act. In 1990, 
however, when Congress reauthorized the Clean Air Act and 
created its own reformulated gasoline program, provisions were 
added which overlapped California's RFG program. S. 1576 would 
remove the overlapping Federal requirement, which we do not 
believe adds anything to improve air quality in the State of 
California.
    In California, several drinking water supplies have become 
contaminated with MTBE, the most widely-used oxygenate in 
California gasoline. Within Chevron, we have conducted a 
nationwide program to look at all of our gasoline handling 
systems and processes, and have instituted a series of 
additional company control measures beyond those required under 
Federal and State laws to further reduce the potential release 
of gasoline, whether it contains MTBE or not, into the 
environment.
    There are major differences between the California and 
Federal RFG programs. First, California RFG results in lower 
emissions of smog-forming compounds than does Federal RFG. This 
will continue to be true, even after the year 2000 when the 
Federal RFG formulation is made more stringent.
    Second, enforcement under the California RFG program is 
more effective because it is based on random sampling and 
testing of gasoline, rather than the Federal program, which is 
paper-based and self-monitoring.
    In recognition of the effectiveness of California's State 
enforcement, EPA has provided partial exemption for California 
from Federal enforcement mechanisms, but that exemption sunsets 
at the end of 1999. Interestingly enough, passage of S. 1576 
would eliminate this overlap between California and Federal 
enforcement, as well.
    Finally, the more prescriptive Federal program requires 
year-round minimum oxygenate content, while the California 
program does not. Research has shown that oxygen is of little 
or no value in reducing summertime smog. Unfortunately, the 
public has been led to believe that reformulated gasolines 
cannot be made without oxygen, but they're simply made by 
adding MTBE or other oxygenates to conventional gasoline. This 
is simply not true.
    As we have shown by doing it the past two summers at our 
Richmond, California, refinery, California RFG can be made with 
no oxygenate and still meet the stringent emissions reduction 
requirements.
    While some oxygenates have physical properties that make 
them useful in meeting the RFG standards, oxygen, per se, is 
not one of them.
    The public in California--and these are Chevron's 
customers--have become so concerned about MTBE, the oxygenate 
used in almost all of California RFG, that a ban was only 
narrowly averted in the State Legislature last year.
    Senator Chafee. I'm mixed up where you are. What page are 
you on? Are you reading from your statement?
    Mr. Jessell. Yes, I am. I'm halfway down page two, assuming 
that it's the same page numbering. I'm not reading from the 
written submission, Mr. Chairman. This is a shorter version.
    Senator Chafee. All right. I was just trying to--so you 
were talking about attempts in the Legislature to overrule the 
requirements?
    Mr. Jessell. Correct. And I wanted to add that, because of 
the confusion about the role of oxygen in reformulated 
gasolines, there were calls for banning California RFG 
entirely.
    The debate and threat of unilateral State action are far 
from over. Studies mandated by the Legislature will be complete 
early next year, at which time the governor is required to make 
decisions about the future of MTBE in California gasoline.
    Interestingly, the Federal oxygen mandate, the stringency 
of the California RFG rules, and California's gasoline 
distribution system have restricted the use of other oxygenates 
such as ethanol and unintended consequence. Ethanol was a good 
California gasoline blending component under the right 
circumstances, and we believe it will be more widely used if 
this legislation passes.
    We believe that MTBE-blended California gasoline can be 
replaced by a combination of oxygenate-free and ethanol-blended 
gasoline.
    S. 1576 would allow the State's performance-based program 
to work as it was intended. What would be the impact if S. 1576 
became law? S. 1576 would allow individual refiners needed 
flexibility to further optimize their California gasoline 
product formulation, while still maintaining the strict 
emission performance targets of California RFG.
    Chevron and other companies would welcome the flexibility 
to manufacture California RFG based solely on performance 
standards. The passage of S. 1576 is a critical first step in 
that direction. It would allow California refiners to optimize 
the use of oxygenates.
    Chevron has reduced MTBE use in California to the limited 
extent possible under current rules. If S. 1576 became law, 
Chevron would significantly reduce or eliminate MTBE use in our 
California gasoline.
    Thank you, Mr. Chairman, for the opportunity. If you have 
any questions, I'd be happy to answer them.
    Senator Chafee. Thank you very much for that testimony.
    Senator Chafee. Now Mr. Durante, who is the executive 
director of the Clean Fuels Development Coalition in Arlington, 
Virginia.
    Mr. Durante, won't you proceed?

  STATEMENT OF DOUGLAS A. DURANTE, EXECUTIVE DIRECTOR, CLEAN 
        FUELS DEVELOPMENT COALITION, ARLINGTON, VIRGINIA

    Mr. Durante. Thank you, Mr. Chairman.
    I do appreciate the opportunity to testify here today. I am 
the executive director of the Clean Fuels Development 
Coalition, a nonprofit organization with a diverse membership 
that represents a variety of industry interests that include 
fuel oxygenate producers, American automobile manufactures, 
independent U.S. refiners, and others involved in energy, 
agricultural, and clean fuel businesses. Many of our member 
companies make and market the products that help to make 
gasoline burn cleaner.
    We were asked today to direct our testimony to the merits 
of a prescribed formula that includes a 2 percent oxygen level 
such as is in Federal reformulated gasoline. We believe those 
merits are considerable, and we oppose legislative efforts to 
change the Federal RFG formula. We were also asked to comment 
on the RFG program in general, and on S. 1576.
    Simply put, Mr. Chairman, RFG has been a fuel quality 
specification that has reduced emissions of carbon monoxide, 
more harmful toxic compounds like benzene, and those that 
contribute to the formation of ground-level ozone pollution or 
urban smog.
    This fuel quality specification, to the credit of industry 
and government, has been administered safely, efficiently, cost 
effectively, required no changes in consumer fueling and 
driving habits, and has had no adverse impacts in vehicle 
performance.
    RFG with oxygenates, despite having emanated from 
Washington, has an exceptional track record and it has exceeded 
expectations for emissions and air quality benefits; it has 
cost less than projected, at under three cents per gallon; it 
has consistently out-performed other formulations and 
substitutes; it has reduced emissions in all vehicles using it, 
and even more so in older cars; it has reduced the consumption 
and import of crude oil; it has provided States with an easily-
implemented option for reducing mobile source pollution; and it 
has gained wide-spread support throughout the U.S. based on its 
success.
    Some have promoted the change to this RFG formula in order 
to address concerns of MTBE in water. We do not believe this 
objective can be obtained simply by allowing California 
refiners to use the CARB formula. Others claim that refiners 
need flexibility to meet emission reductions.
    As for the first objective relating to MTBE in water, we 
believe the focus of any corrective measure should be on the 
leaking gasoline tanks. Allowing a substitute formula that will 
still use MTBE, as would be likely with California gasoline, is 
not the solution. We don't believe gasoline, MTBE, or anything 
else should be in water. The leaking gas tanks pose a threat to 
public health from exposure to a variety of chemical compounds 
currently in gasoline and must be dealt with. This is a serious 
problem that the oxygenate industry wants to help solve.
    The second objective of flexibility is unwarranted. In 
addition to its success in reducing ozone, Federal RFG is 
available and inexpensive. Most importantly, we do not want to 
see efforts to amend the Clean Air Act and the dangerous 
precedent it sets nationwide to undermine what has been a very 
successful program.
    We need to acknowledge that there is a lot we do not know 
about ozone formation, but what we do know is this program is 
working. Southern California enjoyed a 40 percent reduction in 
ozone exceedences the summer after RFG was introduced, and last 
year experienced the cleanest summer on record. Phoenix, 
Arizona, opted into this program in 1997, and for the first 
time in 10 years had an exceedence-free summer.
    The presence of oxygenates in RFG sold in California has 
yielded air quality and health benefits well in excess of 
regulatory requirements and may be providing some benefits we 
don't even fully understand. Without such an understanding, it 
is impossible to guarantee the equivalency of another recipe, 
and the effects of allowing areas to use something other than 
RFG may not be cleaner air or improved public health at all.
    We have done a great deal of work with the States since 
you've developed this program here, and the uniformity of this 
program is something they like, Mr. Chairman. They have the 
ability to gauge and understand what they are getting with this 
program. The fact that it is a specified, non-negotiable 
formula is exactly what they're looking for. And the specter of 
a patchwork mismatched quilt of fuel programs presents the 
potential for an environmental nightmare.
    This success has resulted in an extremely broad base of 
support. DOE and EPA have expressed their support for this 
program. We're continuing to get opt-ins. As recently as 2 
weeks ago, the State of Missouri opted in St. Louis.
    We had an opportunity in December 1997 for a dozen States 
and the District of Columbia that were using RFG to get out of 
the program. They elected to stay in so that they would get the 
progressive benefits that come with phase two RFG in the year 
2000.
    Another element that has not been discussed at all today, 
Mr. Chairman, is the intent of Congress to marry this issue 
with our energy security goals. The whole issue of energy 
security is something that should be considered in terms of the 
diversity of supply.
    During the Clean Air Act deliberations, Congress intended 
to substitute aromatics with oxygenates in order to jump start 
the ethanol, ETBE, and MTBE industries, and they've done just 
that. We've had a dramatic increase in the production of 
ethanol since that time.
    And most of our national goals in alternative fuels are 
failing miserably. We are not achieving the goals that we've 
set either through EPACT or through the Clean Air Act, and this 
gives us one of the few weapons we have to fight that battle.
    And, to the extent that ethanol is used in RFG, 
particularly in ETBE, the environmental and energy security 
benefits may be even greater.
    I want to point out that the development of ethanol 
facilities in California would be adversely affected by the 
removal of an oxygen requirement, which will help stabilize 
their market as they get into this business.
    And, along those same lines, my members, consisting of both 
ethanol and MTBE interests, have significant capital investment 
in places that a response to the regulatory requirements of 
this program that would be at risk. All of this would be very 
much at risk if this were made optional.
    So, in conclusion, Mr. Chairman, S. 1576 and its allowance 
to use the CARB formula, in our opinion, puts too much focus on 
the mass of emissions, and, since not all VOCs are created 
alike in terms of their reactivity and toxicity, we run the 
danger of producing a fuel that is more reactive and more 
likely to cause pollution.
    We also need to recognize that degradation of air quality 
from off-road sources and non-regulated engines--that are not 
recognized in this model and many others that States might 
use--can be up to 10 percent of EOC inventory. So we need to 
continue to use fuel and air quality strategies that are 
successful, as this one has been, for all areas of the United 
States. RFG with oxygen is a common-sense, cost-effective 
approach that we want to see continued.
    I thank you for your interest in holding this hearing and 
giving us the opportunity to testify, and would be very pleased 
to answer any questions.
    Senator Chafee. Thank you, Mr. Durante.
    Mr. Jessel, would Chevron be interested in selling its low 
MTBE gas in the rest of the country? In other words, if the 20 
percent requirement was lifted for all 50 States, would you 
sell all across the country?
    Mr. Jessell. Yes, we would. But Chevron is in a unique 
position of not producing any Federal reformulated gasoline, 
per se, at least up until now. We have most of our refining 
capacity in California. We have one major refinery in 
Pascagoula, Mississippi, but to this date it supplies the 
southeast, which is not required to have Federal RFG, so it is 
almost moot for us.
    Senator Chafee. Mr. Durante, if I understood your testimony 
correctly, you believe that the RFG program has been a success; 
is that correct?
    Mr. Durante. Extraordinarily so, Mr. Chairman. Yes. And the 
numbers would support that.
    Senator Chafee. One of the points that has been made here, 
it seems to me, is that if a refiner can meet the emission 
standards for Federal RFG without the oxygenate mandate, why 
not let them do it?
    Mr. Durante. Well, one reason I do want to bring up--and 
I'm not going to base our support just on this, because this is 
the environment committee, but one reason was the whole idea of 
diversifying our energy supply, and marry this with our energy 
security needs. So if we have to force-feed oxygenates, then 
that's what we have to do.
    From an environmental standpoint, though, as far as being 
able to meet standards without RFG, that's not necessarily some 
ground that we want to give.
    What we're seeing--and we are working, now that we've moved 
sort of out of Washington into the States--is that guaranteeing 
equivalency is a tricky business that has not worked real well, 
and we are seeing a lot of areas that think they've come up 
with something equivalent and believe that they have, only to 
see it fail. And this is happening all the time.
    Just recently, the State of Alabama in the Birmingham area 
was exceeding ozone, and we had them persuaded that RFG was the 
right thing for them to do, and at the last minute they decided 
to go with a couple of other options, which they then used. Two 
weeks ago, on a very hot Friday afternoon, they had six 
exceedences. So these things are not working.
    I think what you did here in Washington was create a 
formula that works. It clearly works. Ozone exceedences, as 
evidenced by real-world data, suggests that this is the right 
approach.
    Senator Chafee. I'm not quite sure I understand. This gets 
back to the prior question I asked about whether we want to 
have performance-based standards or do we want to delineate 
exactly what has to be done in the RFG program from Washington. 
In other words, if Chevron meets the requirements, no matter 
what they do--well, let's assume that it isn't as deleterious 
as MTBE is when it gets into--when it leaks out of underground 
storage tanks. In other words, why not let Chevron do it 
themselves?
    Mr. Durante. Well, we're not persuaded that the predictive 
model that California uses compared to the complex model 
accurately recognizes all the things that form ozone. We think, 
for example, considering carbon monoxide, PM--particulate 
matters, is not reflected--and there is a lot we've learned 
since we've done this a decade ago. But we don't think that 
current models necessarily reflect it, and we think the answer 
lies in, again, the dramatic reduction in exceedences.
    So, again, we've got something that's working well. It is a 
Federal program. There are benefits to being uniform and to 
having some of the things that it has associated with it, so 
why change this?
    Then, again, throughout the entire country, we could be 
facing a quilt approach here, a mismatch of fuels that I think 
is very dangerous, and the slight ease to some refiners in 
California to shake up this entire barrel is a very risky 
procedure.
    Senator Chafee. Well, Maine said they'd be delighted to do 
it, likewise. They would like to have the same law apply to 
them.
    Mr. Durante. Well, then you get into a whole other issue of 
you've got northeast States that have banded together in the 
past to try to fight pollution, yours included. A lot of 
finger-pointing goes on about who is not doing their part and 
who chose the fuel. I go back to this Alabama example of them 
choosing what they thought--and I'm sure in their hearts they 
don't want to exceed the ozone standard--but they chose what 
they thought was a good deal, and it has failed terribly this 
summer.
    So now you've got the transport of that ozone that they 
failed to control blowing into another State, so I think, 
again, the uniformity here is a plus, not a minus.
    Senator Chafee. Okay. Let me see. Mr. Jessel, if you didn't 
use oxygenates, what would you use to get the same emission 
reductions and maintain the octane levels?
    Mr. Jessell. What we've said is that if we didn't have to 
make MTBE-blended gasoline, we would use a combination of non-
oxy gasoline and ethanol-blended gasoline. It's the ethanol-
blended gasoline that would make up the octane deficit that we 
would have if we took the MTBE out.
    In the non-oxy gasoline, it's nothing more than the 
components of gasoline that we have always made gasoline out 
of. Now, they are more highly-processed and much more highly-
refined, because we still have to meet the stringent 
specifications that California imposes as part of their 
reformulated gasoline program, but that can be done with normal 
refinery hydrocarbons and normal refinery processing.
    Senator Chafee. Okay, gentlemen. Thank you again very much 
for coming. Mr. Jessel, you came all the way from San 
Francisco. We appreciate that. Thank you, Mr. Durante, for 
appearing here. Thank you both, gentlemen.
    That completes it.
    [Whereupon, at 3:52 p.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
    [Additional statements submitted for the record follow:]
    
    
    
    
  Statement of Hon. Dianne Feinstein, U.S. Senator from the State of 
                               California
    Thank you for the opportunity to discuss a serious problem 
affecting millions of people in California--the contamination of 
drinking water by the gasoline additive, MTBE.
    I especially want to thank the chairman, Senator John Chafee, for 
his interest in this problem, for holding this hearing and I thank the 
other members of the committee for their interest as well.
The Legislation, S. 1576
    I am here to ask for your support for S. 1576, the bill I 
introduced on January 28, with Congressman Bilbray. H. R. 630 is 
sponsored by 49 out of the 52 members of the California delegation.
    Our bills, in essence, seek a waiver of the Federal 2 percent 
oxygenate requirement. The bills would provide that if a State's 
reformulated gasoline rules achieve equal or greater emissions 
reductions than Federal regulations, a State's rules will take 
precedence. The bill would apply only to States which have received 
waivers under Section 209(b)(1) of the Clean Air Act. California is the 
only State currently eligible for this waiver, a waiver allowing 
California to set its own fuel standards. The other 49 States do not 
set their own fuel specifications.
    The current Federal Clean Air Act requires that reformulated 
gasoline contain a minimum average oxygen content of 2 percent by 
weight. Our bill would give gasoline manufacturers the flexibility to 
reduce or even eliminate the use of MTBE as long as equivalent or 
greater emissions reductions are achieved.
MTBE Is Not Necessary
    In 1991, a year after the 1990 amendments to the Federal Clean Air 
Act that imposed the current oxygenate requirements, California's Air 
Resources Board established its own rules, effective in 1996, for 
reformulated gasoline because the ARB determined that Federal rules 
would not provide sufficient clean air benefits for the State to meet 
Federal ozone standards. California's clean-burning gasoline provides 
about twice the air quality benefits of Federal reformulated gasoline, 
according to the State's air board.
    According to John Dunlap, Chairman of the California Air Resources 
Board, who will testify today, ``Federal and State law should set 
content neutral performance standards, not prescriptive content volumes 
for refiners to meet.'' Thus, in 1994, the ARB approved use of a 
predictive model, which is a performance-based program that allows 
refiners to use innovative fuel formulations to meet clean air 
requirements. The predictive model requires gasoline to meet 
California's State standards, which provide twice the clean air 
benefits required by the Federal Government. With this model, refiners 
can make cleaner burning gasoline with 1 percent oxygen or even no 
oxygen at all.''
    As Mr. Dunlap told the House in a April 22 hearing there, 
``Incredibly, the Federal oxygen rule prevents those refiners from 
selling the Northern California gasoline with reduced or no oxygenates 
in Southern California, even though the Northern California gasoline 
provides twice the clean air benefits required by the Federal 
Government.''
    Mr. Dunlap has told me that California's reformulated gasoline 
requirements have reduced toxic air pollutants by 30 percent and ozone 
precursors (hydrocarbons and nitrogen oxides) by 17 percent. Ozone has 
been reduced by 10 percent in Northern California and 18 percent in Los 
Angeles. Benzene levels dropped by more than 50 percent. Our program 
has had the effect of removing 3.5 million cars out of our 24 million 
from the roads.
Gasoline Companies Can Make Clean Gas Without MTBE
    Chevron Products Company wrote me on September 11, 1998, ``We 
believe it is possible to replace gasoline, which currently contains 
MTBE with a combination of ethanol-blended gasoline and non-oxygenated 
gasolines, while maintaining the clean air benefits that the California 
Cleaner Burning Gasoline program has provided.''
    I asked Chevron, ``Can California gasoline be made without MTBE but 
preserve emissions benefits?'' Chevron responded as follows:
    Yes. California allows the sale of a wide variety of gasoline 
formulations without oxygenates as long as they produce the same 
emissions reductions as a carefully designed base gasoline. As 
discussed above, this has been done at Chevron's Richmond refinery. 
Formulations that do not show equivalent or better emissions 
performance are not allowed. This is a pure performance standards--
oxygen is not required, per se. Were there no Federal oxygen 
requirement, much, but not all, of a refiner's CBG could be made 
without MTBE by using ethanol or no oxygenate at all. However, not all 
MTBE can be eliminated year round without some increased flexibility in 
California's regulations. This can be accomplished without jeopardizing 
the emissions benefits that California Cleaner-Burning Gasoline (CBG) 
was designed to deliver. The California Air Resources Board has begun 
the process of making the needed changes.
    The attached report from the Auto/Oil Air Quality Improvement 
Program shows actual emissions from a fleet of test vehicles run on an 
oxygenated vs. a non-oxygenated California gasoline. The report 
concluded that emission differences between reformulated California 
gasoline with MTBE, and a similar reformulated California gasoline 
without MTBE were generally not statistically significant. The result 
was true in both 1989 model year fleets as well as later model years 
with more advanced emission control technologies. The only 
statistically significant difference noted was a 13 percent decrease in 
formaldehyde emissions from the advanced fleet with the MTBE-free 
fuel.''
    I am inserting the letter and materials from Chevron for the 
record.
    In addition, Tosco is now using ethanol-blended gasoline and when 
Tosco began this past April, they say a 20 percent volume increase in 
sales at gas stations.
The Problem: Drinking Water Contamination
    Contamination of California's drinking water by methyl tertiary 
butyl ether (MTBE) is a serious problem in California. In higher 
concentrations, it smells like turpentine and it tastes like paint 
thinner. MTBE can simply make drinking water simply undrinkable.
    MTBE is a highly soluble organic compound which moves quickly 
through soil and gravel. It, therefore, poses a more rapid threat to 
water supplies than other constituents of gasoline when leaks occur. 
MTBE is easily traced, but it is very difficult and expensive to 
cleanup. The Association of California Water Agencies estimates that it 
would cost as much as $1 million per well to install treatment 
technology to remove MTBE from drinking water. Without these funds, the 
only option is to shut down wells.
    A June 11 Lawrence Livermore National Laboratory study reached five 
important conclusions:
    1. ``MTBE is a frequent and widespread contaminant in shallow 
groundwater throughout California. There are presently 32,409 leaking 
underground fuel tank sites recognized in the State, 13,278 at which 
hydrocarbons are known to have impacted groundwater. A minimum estimate 
of the number of MTBE-impacted sites in California is greater than 
10,000.''
    2. ``MTBE plumes are more mobile than BTEX (benzene, toluene, 
ethylbenzene, and xylenes) plumes.'' Thus, it moves quickly to 
infiltrate groundwater.
    3. ``The primary attenuation mechanism for MTBE is dispersion.''
    4. ``MTBE has the potential to impact regional groundwater 
resources and may present a cumulative contamination hazard.''
    5. ``We have identified two major areas of uncertainty in our 
results. First, presently available MTBE data are limited. Second, the 
issue of recalcitrance of MTBE has not been resolved.''
Extent of Contamination
    According to the Association of California Water Agencies, MTBE has 
been detected in shallow groundwater at over 10,000 sites in 
California. Some deeper drinking water wells have also been affected. 
The major contamination problems are in Santa Monica (which lost 75 
percent of its ground water supply), South Lake Tahoe, Santa Clara 
Valley (Great Oaks Water Company) and Sacramento (Fruitridge Vista 
Water Company). Drinking water wells in each of these cities have been 
shut down because of MTBE contamination.
    Californians are more dependent on groundwater as a source of 
drinking water than most Americans. According to the U. S. Geological 
Survey, 69 percent of California's population relies on groundwater as 
their source of drinking water, while for the U. S. population at 
large, 53 percent of the population relies on groundwater.
    In addition, preliminary data show that MTBE has been detected in 
the following surface water reservoirs: Lake Perris (Metropolitan Water 
District of Southern California), Anderson Reservoir (Santa Clara 
Valley Water District), Canyon Lake (Elsinore Valley Municipal Water 
District), Pardee Reservoir and San Pablo Reservoir (East Bay Municipal 
Utility District), Lake Berryessa (Solano County Water Agency).
    I am submitting for the record a list of groundwater MTBE 
detections California prepared by the State's Department of Health 
Services.
S. 1576 Should Be Enacted
    I hope this committee can approve this bill and that we can achieve 
Senate passage before this Congress ends. There are several reasons.
    1. First and foremost, we must get MTBE out of California's 
drinking water.
    That is my primary goal. It tastes bad. It smells bad. And we know 
it is a health hazard for laboratory animals and possibly humans.
    California cannot afford to lose any more of its drinking water. 
According to the Association of California Water Agencies, by the year 
2020, California will be 4 million to 6 million acre-feet short of 
water each year without additional facilities and water management 
strategies.
    2. The dangers of MTBE were not considered when Congress last 
amended the Clear Air Act in 1990.
    According to the Congressional Research Service, during Congress's 
consideration of the Clean Air Act Amendments, which became law in 
1990, there was no discussion of the possible adverse impacts of MTBE 
as a gasoline additive. Likewise, CARB has said that when they were 
considering our State's reformulated gasoline regulations, ``the 
concern over the use of oxygenates was not raised as an issue.''
    3. California can meet Federal clean air standards by using our own 
regulations.
    The chairman of the California Air Resources Board this morning 
will tell you how our State can have equivalent or greater reductions 
in emissions and improve air quality using our own regulations, 
regulations which produce twice the clean air benefits. These standards 
are more stringent but offer gasoline manufacturers more flexibility 
than the prescriptive requirements. Furthermore, U. S. EPA has approved 
California's State implementation plan (SIP) required by the Clean Air 
Act and which is federally enforceable.
    If we can achieve and maintain clean air and meet Federal standards 
with our own regulations, I believe we should be allowed to do so.
    4. Congress has long recognized that California is a unique case.
    California's efforts to improve air quality predate similar Federal 
efforts. We have our own clean gas program and U. S. EPA has given the 
State a waiver under section 209(b)(1) of the Clean Air Act to develop 
our own program.
Other Actions Needed Too
    Leaking Underground Storage Tanks: There is no question that 
leaking underground petroleum or gasoline storage tanks and their 
pipelines are a major source of MTBE in drinking water. Fortunately, 
Congress has acted and all tanks are supposed to meet Federal safety 
standards by December 22, 1998. Unfortunately, EPA estimates that only 
half of the nation's 600,000 will comply by that time. In my State, the 
State Water Resources Control Board estimates that 31,000 tanks or 
about 50 percent of the total still need to be upgraded. Our State 
legislature has established a trust fund to assist owners in meeting 
the costs of repairs. I applaud this action and in addition I have 
appended a copy of my letter to EPA Administrator Browner asking for 
her recommendations for action that we should take her and information 
on what actions she intends to take if all tanks are not comply by the 
December deadline, which is a mere 3 months away.
    Accelerate Research: I have written both U.S. EPA and California 
EPA urging a more aggressive research agenda to more definitively 
ascertain the human health impacts, acute and chronic. I wrote to U. S. 
EPA on April 11 and 14, September 24 and on November 14, 1997. EPA 
responded that an interagency group had met to ``finalize the research 
strategy for fuel oxygenates.'' I have again written Ms. Browner to ask 
the status of that strategy and when we will learn more about MTBE's 
hazards.
    Drinking Water Standard: On November 3, 1997, I wrote Browner 
urging EPA to promulgate a drinking water standard for MTBE. Assistant 
Administrator Perciasepe responded on December 8 that EPA was 
finalizing a drinking water advisory on MTBE. I am grateful that EPA 
issued a drinking water advisory in December 1997, but this is not a 
standard. This is guidance only. In that same letter, he indicated that 
EPA had ``placed MTBE on the draft Contaminant Candidate List for 
further evaluation to determine whether or not to regulate MTBE in 
drinking water.'' I have written again to stress that this process be 
accelerated.
    I would like to submit for the record my correspondence with EPA.
MTBE & Respiratory Problems
    A number of studies are underway to analyze the impact of MTBE on 
human health. I would like to bring to the committee's attention the 
work of Dr. Peter Joseph, Ph.D., Professor of Radiologic Physics in 
Radiology, University of Pennsylvania Medical Center. Dr. Joseph 
contends that the astounding increase in asthma rates could be linked 
to the increasing use of MTBE in gasoline. I have urged EPA to examine 
this issue and hope that you can support more research on MTBE and its 
effect on respiratory illnesses.
    I would like to submit for the record Dr. Joseph's letter to me and 
his study, ``Changes in Disease Rates in Philadelphia Following the 
Introduction of Oxygenated Gasoline.''
Conclusion
    Millions of Californians should not have to drink water 
contaminated with MTBE. I believe we can put in place requirements for 
clean gasoline that do not degrade the air but that also do not 
contaminate our water.
    I look forward to working with you toward this end.
    [Statements and documents referenced in Senator Feinstein's 
statement follow:]
      
                                          City of Milpitas,
                             Milpitas, CA 95035, September 3, 1998.

    Honorable Pete Wilson, Governor,
    First Floor, State Capitol,
    Sacramento, CA 95814

    Subject: Resolution Urging a Prohibition on the Use of MTBE in 
Gasoline

    Dear Governor Wilson: On September 1, 1998, the City Council of the 
City of Milpitas adopted Resolution No. 6810 urging you to employ your 
executive powers to prohibit the use of Methyl Tertiary-Butyl Ether 
(MTBE) and other ether oxygenates in gasoline in California. A copy of 
the Resolution is attached.
    The City of Milpitas relies on local groundwater aquifers to supply 
over 40 percent of the water needs of its customers. Contamination of 
those groundwater supplies by MTBE or other ether oxygenates would 
create a very serious water quality problem, which would be extremely 
expensive to correct. The City's water customers, which include some of 
the largest electronic firms in the world, rely on high quality water 
for human consumption as well as industrial use.
    Your efforts to prohibit the use of MTBE are appreciated.
            Very truly yours,
                                      Henry Manayan, Mayor.
                                 ______
                                 
                   Milpitas, CA, Resolution No. 6810
a resolution of the city council of the city of milpitas requesting the 
 governor to prohibit the use of methyl tertiary-butyl ether or other 
                      ether oxygenates in gasoline
    Be it Resolved by the City Council of the City of Milpitas, 
California (``City'') as follows:
    Whereas, Methyl tertiary-butyl ether (``MTBE'') represents a threat 
to groundwater and surface water supplies in California; and
    Whereas, MTBE is difficult and expensive to remove once it is in 
the water supply; and
    Whereas, MTBE is highly soluble in water, shows a high degree of 
mobility in soils and persistence in the water and has a very low taste 
and odor threshold; and
    Whereas, although the health effects of MTBE are not well known, it 
is a possible human carcinogen; and
    Whereas, the City is responsible for developing and maintaining a 
safe, healthful, potable and reliable water supply for the more than 
62,000 residents and water customers of the City; and
    Whereas, the City's objectives include water quality protection and 
enhancement; and
    Whereas, the City relies upon groundwater to supply the water needs 
of some of its customers; and
    Whereas, MTBE has been detected at nearly 300 leaking underground 
storage tank sites in Santa Clara County; and
    Whereas, MTBE has been detected at very low levels in at least one 
drinking water well at a location in the Santa Clara Valley not within 
the City; and
    Whereas, the mechanisms of MTBE contamination include leading 
underground storage tanks, other gasoline storage and distribution 
systems, gasoline-powered water craft, storm water runoff, and rainfall 
washout; and
    Whereas, to protect the public health and welfare the California 
Department of Health Services is in the process of promulgating a 
Maximum Contaminant Level for MTBE in drinking water.
    Now Therefore Be It Resolved, that the City Council of the City of 
Milpitas urges a prohibition on the use of MTBE or any other ether 
oxygenate as an additive to gasoline within the State of California.
    Be It Further Resolved that the City Council of the City of 
Milpitas urges the Governor to employ his executive powers to achieve 
removal of MTBE and other ether oxygenates as additives to motor 
vehicle fuels in the Sate of California in order to protect the State's 
valuable water resources, and to work with the appropriate authorities 
at the Federal level to achieve this prohibition and to identify 
alternative methods to achieve acceptable air quality objectives.
    Passed and adopted this 1st day of September, 1998,
                                 ______
                                 
                              Orange County Water District,
                            Fountain Valley, CA, September 1, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Los Angeles, CA 90025.

    Dear Senator Feinstein: At the request of the Board of Directors of 
the Orange County Water District (OCWD), I have been asked to forward 
the attached August 19,1998, Board of Director's Resolution concerning 
methyl tertiary butyl ether (MTBE). This Resolution reflects a real, 
growing concern on the part of the OCWD Board about the realities of 
MTBE contamination. While low taste and odor thresholds will keep the 
consumers safe from MTBE's health effects, it remains a very real 
economic threat through possible contamination of future water 
supplies.
    A recent study by the Lawrence Livermore National Laboratory 
(LLNL), entitled ``An Evaluation of MTBE Impacts to California 
Groundwater,'' found that MTBE is more mobile in groundwater than other 
gasoline additives and is extremely slow to degrade in the environment.
    We feel the results of the LLNL study clearly justify the 
recommended actions mentioned in our Resolution. We ask for your 
strongest support of these actions which we feel are in the best 
interests of all Californians. Please keep us informed on any actions 
you may take in support of this Resolution.
            Sincerely,
               William R. Mills Jr., P.E., General Manager.
                                 ______
                                 
    Resolution of the Board of Directors of the Orange County Water 
         District Concerning Methyl Tertiary Butyl Ether (MTBE)
    Whereas, the Orange County Water District is concerned about the 
potential for widespread contamination of Orange County's drinking 
water supplies by methyl tertiary butyl ether (MTBE) and is carrying 
out an MTBE action plan; and
    Whereas, MTBE, a chemical additive in gasoline that reduces carbon 
monoxide exhaust emissions, is also contaminating ground and surface 
waters throughout California, primarily due to leaking underground 
gasoline storage tanks and gasoline-powered watercraft on lakes, 
reservoirs and rivers; and
    Whereas, water agencies and their customers should not be burdened 
with funding the cleanup of MTBE contamination, as these costs could 
force water suppliers to significantly raise their water rates for 
residential and industrial customers; and
    Whereas, a recent study by the Lawrence Livermore National 
Laboratory concluded that MTBE is more mobile in groundwater than other 
gasoline additives; is extremely slow to degrade in the environment; 
and demonstrates a low odor and taste threshold; and
    Whereas, while MTBE's low taste and odor thresholds will keep 
consumers safe from adverse health effects, it remains a very real 
economic threat to future water supplies;
    Now, Therefore, Be It Hereby Resolved, that the Board of Directors 
of the Orange County Water District, based on the results of the 
Lawrence Livermore National Laboratory study, strongly recommend the 
following actions be taken by local, state and Federal officials to 
immediately address the MTBE issue:
      Support development of legislation banning MTBE as a 
gasoline additive within 2 years, while continuing to maintain or 
enhance air quality.
      Augment the State's regulatory agencies' resources that 
deal with MTBE contamination, including discovery, monitoring and clean 
up, so that existing and yet undiscovered MTBE contamination can be 
remediated on an expedited basis.
      Support regulatory change that prevents use of gasoline 
powered watercraft on water supply reservoirs.
                                 ______
                                 
                                  Chevron Products Company,
                                 San Francisco, September 11, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510-0504

    Dear Senator Feinstein: Thank you again for meeting with me last 
week while I was in Washington. We appreciate your leadership in 
sponsoring S. 1576 and strongly support its enactment into law. This is 
an issue of great concern to Chevron and to our customers. While we 
believe MTBE is safe, if handled properly, and is not a public health 
threat, we do recognize there are environmental concerns and have been 
actively pursuing alternatives to the continued use of MTBE in gasoline 
in California.
    As I mentioned, we have produced significant quantities of gasoline 
in California without MTBE, in areas where Federal law does not require 
oxygenates to be added. Supplying the entire California gasoline market 
will require further refinery modifications and additional changes to 
both Federal and state gasoline requirements. We believe it is possible 
to replace gasoline, which currently contains MTBE with a combination 
of ethanol-blended gasoline and non-oxygenated gasolines, while 
maintaining the clean air benefits that the California Cleaner Burning 
Gasoline program has provided.
    However, significantly reducing or eliminating MTBE from our 
gasolines without compromising those clean air benefits is first 
dependent on getting the needed change in Federal law, which S. 1576 
provides. Passage of S. 1576 would allow refiners to use the most 
effective formulations of gasoline whether or not they contain 
oxygenates, as long as they meet the stringent California gasoline 
emissions performance standards. We therefore strongly support this 
important legislation.
    We will also need flexibility in the regulations of the California 
Air Resources Board. We have been discussing regulatory changes with 
CARB that we hope will give refiners the flexibility needed to provide 
gasolines that meet or exceed clean air standard, without the continued 
need to use MTBE.
    Additional information to address issues you raised is included hi 
the attachments to this letter. The California Cleaner Burning Gasoline 
has been very effective hi helping reduce vehicle emissions and improve 
air quality. However, we do need Congress and CARB to make changes he 
the requirements that limit our ability to produce gasoline without 
MTBE. Your continued leadership hi this effort appreciated.
            Sincerely,
                              David J. O'Reilly, President.
                                 ______
                                 
                                         Tosco Corporation,
                                     Concord, CA, October 17, 1997.

    John D. Dunlap, III,
    Chair, Air Resources Board,
    2020 L Street, 4th Floor,
    Sacramento, CA 95812.
    Dear Mr. Dunlap: In light of the continuing controversy surrounding 
MTBE, Tosco would like to communicate its concerns directly to you. We 
believe that responsible action should be taken sooner rather than 
later to allow the reduced use or elimination of MTBE in gasoline. Our 
call to action is based on growing evidence. of the potential for 
extensive MTBE contamination that could occur and the resulting 
liability the state, and ultimately our citizens, could face to restore 
California drinking water supplies.
    Tosco, as you know, is one of the largest refiners and marketers of 
gasoline in California. It is now apparent that the issue of potential 
MTBE contamination of the state's water was not adequately considered 
prior to implementation of the Federal and state reformulated gasoline 
regulations. Consequently, we find ourselves in a ``Catch 22'' since 
the current regulatory framework effectively leaves us no choice but to 
use MTBE to meet clean fuel standards.
    A good first step, which I understand you support, would be passage 
of H.R. 630 (Bilbray) currently pending in the U.S. House of 
Representatives. This bill, which would provide some of the flexibility 
refiners need to begin shifting away from MTBE, already has the support 
of most of the California Congressional delegation.
    There may be other regulatory changes which could be made to allow 
greater use of other oxygenates (such as ethanol) or the use of no 
oxygenates. Based on the recently released Auto/Oil study, it appears 
that oxygenates will not be needed in the long run to achieve reduced 
emissions. It seems eminently logical, given the obvious water quality 
problems associated with MTBE, to begin immediately to move toward 
complete oxygenate flexibility.
    We believe the timetable for action set up by the recently passed 
legislation is too slow and that the state should take decisive action 
immediately to begin to move away from MTBE. Tosco is committed to 
working cooperatively with ARB, other agencies, the Legislature and 
industry to resolve this problem promptly, without endangering the 
state's clean air or clean water programs, and without negatively 
affecting the supply or cost of gasoline in California.
            Sincerely,
                         Duane B. Bordvick, Vice President,
               Environment and External Affairs, Tosco Corporation.
                                 ______
                                 
                                     State of California,  
                                    Office of the Governor,
                                    Sacramento, CA, August 7, 1998.

    Honorable John Chafee, Chairman,
    Committee on Environment and Public Works,
    United States Senate,
    Washington, DC 20510.

    Dear Mr. Chairman: I understand that during the Senate floor debate 
on the fiscal year 1999 appropriations bill for EPA, Senator Feinstein 
explored attaching her legislation, S. 1576, as a floor amendment to 
that appropriations bill. I support S. 1576, and its comparison measure 
introduced by Rep. Brian Bilbray, H.R. 630. The State has testified 
before the House Commerce Committee in favor of H.R. 630.
    While I regret that Senator Feinstein was initially unsuccessful, I 
am pleased that you agreed to hold a hearing on S. 1576 in September. I 
urge you to schedule a legislative hearing as, early as possible, while 
there is still ample time led In this Congress to enact legislation. 
Both S. 1576 and H.R. 630 recognize the exemplary history of 
California's clean air programs by allowing, US, the flexibility to 
have our existing reformulated gasoline program--which is performance-
based and flexible with respect to gasoline recipes--operate in lieu of 
the Federal program in our state. The Clean Air Act already provides 
special rules for California. This legislation is a logical extension 
of that principle.
    Thank you in advance for your cooperation.
            Sincerely,
                                     Pete Wilson, Governor.
                                 ______
                                 
                              California Energy Commission,
                                Sacramento, CA, September 15, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510

    Dear Senator Feinstein: On behalf of the California Energy 
Commission (CEC), I am pleased to communicate our strong support for S. 
1576. The CEC endorses the additional flexibility that will be given to 
all California refiners while still maintaining the benefits of 
California's more stringent reformulated gasoline (RFG) program.
    We believe that the use oxygenates, without the regulatory 
requirement, will achieve a more natural equilibrium in the market for 
transportation fuels. We expect the oxygenate demand could be lower 
under S. 1576. This would also put downward pressure on the price that 
refiners pay, thus providing the potential to reduce their costs 
further. Both of these situations could mean lower gasoline price for 
California consumers.
    In closing, the California Energy Commission applauds yow 
sponsorship of S. 1576 and believes that the passage of this bill will 
translate into water flexibility for the refining industry without 
sacrificing the environmental benefits of our existing reformulated 
gasoline regulations.
            Sincerely,
                                 David A. Rohy, Vice Chair,
                                      California Energy Commission.
                                 ______
                                 
                California Environmental Protection Agency,
                                 Sacramento, CA, February 28, 1997.

    Honorable Thomas J. Bliley, Jr., Chairman,
    Committee on Commerce,
    U.S. House of Representatives,
    Washington, DC 20515.

    Dear Chairman Bliley: I An pleased to express the support of the 
California Environmental Protection Agency (Cal/EPA) for H.R. 630, the 
reintroduction of last session's H.R. 3518. Under this bill, pertaining 
to Federal reformulated gasoline regulations, California's cleaner 
burning gasoline regulations would apply in California lieu of existing 
Federal regulations as long as these regulations achieve equivalent or 
greater reductions in emissions of ozone-forming compounds and toxic 
air contaminants.
    As you know, California has historically faced the most challenging 
air pollution problems in the Nation end has therefore been the only 
state allowed by the Federal Clear Air Act to develop and administer 
its own motor vehicle emission standards. As long as these standards 
are at least as protective as the Federal standards and meet other 
criteria, our California motor vehicle emission standards can be 
substituted for the Federal standards. California is also the only 
state given unconditional authority under the Federal Clean Air Act to 
adopt its own emission control standards for gasoline and other motor 
vehicle fuels.
    The 1990 Clean Air Act Amendments directed the U.S. Environmental 
Protection Agency (EPA) to adopt a Federal reformulated gasoline 
program for urban areas with the most serious smog problems. Those 
amendments mandated that Federal reformulated gasoline include various 
specified properties and imposed limitations on the level of 
flexibility that the U.S. EPA could build into the programs.
    Unfortunately, the overlapping applicability of the state and 
Federal reformulated gasoline regulations substantially reduces the 
extent to which refiners can take advantage of the flexibility built 
into the California program. Refiners are required to comply with the 
Federal Clean Air Act even though the California predictive models 
shows that a different formulation will achieve equivalent or better 
air quality benefits. Refiners are also required to meet complicated 
Federal reporting and recordkeeping requirements that are not necessary 
for compliance with the State program. Although we are pleased that 
U.S. EPA exempted California refiners from a number of the Federal 
enforcement requirements, a refiner can lose that exemption as a result 
of even a single violation of the California regulations.
    Now that the California and Federal reformulated gasoline 
regulations are in place, it is clear that it makes best sense for the 
state relations to apply in lieu of the Federal regulations, as is the 
case with California's motor vehicle emission standards. Enactment of a 
bill similar to last session's H.R 3513 is necessary so that refiners 
can fully use the flexibility built into the California program, and 
can avoid needless paperwork requirements. This will reduce the costs 
of producing California gasoline, and should lead to lower prices at 
the pump.
    Furthermore, H.R. 3518 was carefully crafted to assure that 
Californians enjoy all of the health benefits of reformulated gasoline. 
The California gasoline regulations have been approved by U.S. EPA as 
part of our State Implementation Plan, and are thus federally 
enforceable.
    Our program has a proven, significant effect on California's air 
quality. Following the introduction of California's gasoline program in 
the spring of 1996, monitored levels of ozone, on a weather-adjusted 
basis, were reduced by 10 percent in northern California and 18 percent 
in the Los Angeles area. Benzene levels dropped by more than 50 
percent.
    The California regulations would replace the Federal regulations 
only if they will achieve equivalent or greater emission reductions. We 
support the approach in last year's bill to base the equivalency 
analysis on the aggregated emissions of toxic air contaminants, since 
section 21(k)(10)(C) of the Clean Air Act defines ``toxic air 
contaminants'' for purposes of the Federal reformulated gasoline 
requirements as the aggregate emissions of five identified compounds.
    For these reasons, Cal/EPA fully supports H.R. 630. Please let me 
know if there is anything myself or Cal/EPA can do to assist in its 
passage.
    Thank you for your attention to this matter. Should you have any 
questions, please contact me at (916) 322-5840.
            Sincerely,
                                  John D. Dunlap, Chairman,
                                 ______
                                 
                  Association of California Water Agencies,
                                Sacramento, CA, September 14, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510-0504

    RE: ACWA Support for S. 1576, Legislation to permit the exclusive 
application of California State regulations regarding reformulated 
gasoline in certain areas within the State

    Dear Senator Feinstein: Thank you for the opportunity to submit 
this statement on behalf of the Association of California Water 
Agencies (ACWA) regarding S. 1576 and larger issues surrounding 
gasoline additives and their potential impact on California water 
suppliers.
    ACWA's 437 public water agency members collectively manage and 
deliver 90 percent of the urban and agricultural water used in the 
state. Over 30 million Californians rely on ACWA members to provide a 
safe and reliable supply of drinking water to their homes, schools and 
businesses.
    The use of methyl tertiary butyl ether (MTBE) in gasoline is 
presenting a new and ominous challenge for water suppliers in 
California. Though the subjects of gasoline additives and air quality 
regulations may be unfamiliar terrain for water agencies, ACWA members 
have a compelling interest in decisions regarding the continued use of 
MTBE and other oxygenates in gasoline. The potential for widespread 
drinking water contamination and the tremendous treatment costs 
involved demand that water utilities weigh in to ensure that water 
supply impacts receive due attention and consideration in the MTBE 
debate.
    MTBE's unique properties pose a contamination threat to both 
groundwater and surface water in California. Because MTBE is highly 
water soluble and does not easily biodegrade, it can percolate through 
the ground into groundwater basins faster than other components of 
gasoline and is much more difficult to remove once it is there.
    Sampling by ACWA members and other agencies shows that MTBE is 
indeed finding its way into groundwater and surface water sources. MTBE 
has been detected at relatively high levels in shallow groundwater 
basins in several parts of the state and in deep drinking water wells, 
primarily as a result of leaking underground storage tanks and / or 
pipelines. The most notable example is in the City of Santa Monica, 
where 80 percent of the water supply has been lost due to MTBE 
contamination. In South Lake Tahoe, 12 of the South Lake Tahoe Public 
Utilities District's 34 wells have been shut down due to the threat of 
MTBE contamination from nearby leaking underground storage tanks. Three 
of those wells have already been contaminated. Wells in the Santa Clara 
and Sacramento areas have also been shut down due to MTBE 
contamination.
    A statewide survey of surface water sources coordinated by ACWA 
shows MTBE contamination at lower but potentially significant levels in 
reservoirs throughout California. Preliminary results indicate anywhere 
from 60 percent to 75 percent of the reservoirs sampled have detectable 
levels of MTBE. Surface water contamination is believed to result 
primarily from use of motorized watercraft on lakes and reservoirs.
    Though some call MTBE the most studied chemical in gasoline, little 
definitive data is available about the health effects of MTBE in 
drinking water. The state Department of Health Services has established 
an interim ``action level'' of 35 parts per billion (ppb), and has 
proposed a secondary (consumer acceptance-based) standard for MTBE at 5 
ppb. A primary (health effects-based) standard is due in July 1999.
    The U.S. Environmental Protection Agency has issued a drinking 
water advisory for MTBE recommending a maximum of 20 ppb--40 ppb to 
avoid taste and odor impacts and protect public health.
    Initial studies show that consumers can detect MTBE at relatively 
low levels. With such a low taste and odor threshold, MTBE 
contamination can render drinking water unacceptable to consumers at 
levels much lower than California's current action level and EPA's 
advisory level.
    Most drinking water systems in California are not equipped to 
remove MTBE. The limited research that has been done to date indicates 
that MTBE is more difficult and more expensive to remove from drinking 
water than other components of gasoline. Developing, constructing and 
operating treatment processes to remove MTBE will be tremendously 
costly at a time when public water agencies already face mounting costs 
to keep healthful water flowing to their customers' taps. Some 
utilities estimate that treatment costs could exceed $1 million for 
each contaminated drinking water well.
    ACWA members believe several actions are needed to protect water 
sources and drinking water consumers from the impacts of MTBE use. One 
of the most important is passage of legislation that provides 
flexibility to California to meet air quality goals without the use of 
oxygenates such as MTBE that pose a threat to drinking water sources.
    The California State Legislature passed two bills this session 
which target the fuel oxygenate issue. SB 2198 (Skier, Leslie), an 
ACWA-sponsored bill, will provide $20 million over 3 years for water 
utilities to pay for costs stemming from contamination of drinking 
water by gasoline additives such as MTBE. AB 1642 (Bower), will expand 
the types of oxygenates that can be added to California gasoline by 
prohibiting the application of oxygenate content cap. This would allow 
oil companies the flexibility of using oxygenates other than MTBE, such 
as ethanol, in California gas. Both bills are awaiting signature by the 
Governor.
    ACWA supports S. 1576 and similar legislation in the Senate that 
takes a related approach. The Association believes passage of S. 1576 
would provide a critical first step away from regulatory constraints 
that create an unjustified and unacceptable tradeoff between air and 
water quality protection.
    California simply cannot afford to lose any of its limited water 
resources to MTBE contamination. According to projections by the 
State's Department of Water Resources, California will be 4 million to 
6 million acre-feet short of water each year by 2020 without additional 
facilities and water management strategies. Given these growing 
demands, protection of our water resources must be given full 
consideration in every forum in which MTBE and other oxygenates are 
evaluated.
    The potential for drinking water contamination and the tremendous 
treatment costs involved warrant serious consideration by the Senate 
Environment and Public Works Committee as it evaluates any legislation 
affecting gasoline specifications. ACWA stands ready to assist the 
committee, State and Federal agencies and industry representatives as 
they seek to address MTBE and related issues.
    Thank you for this opportunity to express ACWA's support for S. 
1576.
            Sincerely,
                       Stephen K. Hall, Executive Director.
                                 ______
                                 
 San Joaquin Valley Unified Air Pollution Control District,
                                         Fresno, CA, April 1, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510
    Dear Senator Feinstein: The San Joaquin Valley Unified Air 
Pollution Control District strongly supports H.R. 630, as your bill 
would provide California with greater authority over its clean air 
program by allowing California's cleaner-burning gasoline regulation to 
apply in lieu of Federal reformulated gasoline regulations. 
California's reformulated fuel would be required to achieve equivalent 
or greater reductions in emissions of ozone forming compounds and toxic 
contaminants.
    H.R. 630 is needed because oil refineries must now simultaneously 
implement California's cleaner-burning gasoline regulations and the 
regulations for Federal reformulated gasoline in most of southern 
California and the Sacramento region. This results in regulatory 
duplication, inconsistent regulatory requirements, and unnecessary 
costs without deriving any additional air quality benefits.
    Furthermore, Federal law requires a strict gasoline recipe which 
mandates use of specified levels of oxygenates such as MTBE and 
ethanol. H.R. 630 in combination with proposed state of California 
actions, provides greater flexibility for oil refiners to use 
oxygenates in lesser amounts or no oxygenates at all to provide 
cleaner-burning gasoline.
            Sincerely,
                         David L. Crow, Executive Director.
                                 ______
                                 
   Statement of Proceedings for Meeting of the Community Development 
                Commission of the County of Los Angeles
                        tuesday, august 18, 1998
    Recommendation as submitted by Supervisor Antonovich: Support 
Congressman Bilbray and Senator Feinstein's amendments to the Clean Air 
Act to repeal the mandated use of oxygenates in gasoline, instruct the 
County's Legislative Advocates in Washington DC to work for passage of 
the amendments; and send letters expressing the Board's support for 
passage of the amendments to the Congressional Leadership and the 
California Congressional Delegation. APPROVED (See supporting document)
    Vote: Unanimously carried.
    The Board has approved Supervisor Mike Antonovich's motion 
supporting Federal legislation repealing mandated use of carcinogenic 
oxygenates, such as methyl tertiary butyl ether (MTBE) in gasoline.
    ``This carcinogen has been found in well water, lakes and 
reservoirs. This is the result of motorboat exhaust. It makes no sense 
to have the Federal Government mandate this dangerous pollutant when 
there are viable alternatives,'' Antonovich said.
    ``A study at the University of California, Los Angeles, also 
revealed that MTBE is leaking from 10,000 gasoline storage tanks 
statewide,'' he added.
    Antonovich noted that lawsuits have been filed seeking to ban MTBE 
in gasoline.
    The Board's action instructs the counts legislative advocates 
Washington, DC to work for passage of the legislation and five-
signature letters to congressional leadership and to to California 
congressional delegation.
  motion by supervisor michael d. antonovich--mtbe (gasoline additive)
    A lawsuit seeking to ban the gasoline additive, MTBE, has been 
filed against the largest oil companies doing business in California. 
MTBE, according to a study currently underway at UCLA, is leaking from 
10,000 tanks across California. These leaks constitute a potential 
health hazard as the MTBE, a suspected carcinogen, seeps into drinking 
water sources.
    This is the dark side of MTBE. However, it also has a good side. 
MTBE is an oxygenate that is a key ingredient of cleaner burning 
gasoline. According to the California Air Resources Board, using MTBE 
in gasoline has eliminated an amount of carbon monoxide equivalent to 
removing 3 million to 4 million gas powered vehicles from California's 
streets and freeways.
    Use of oxygenates such as MTBE in gasoline is mandated by Federal 
law in non-attainment areas. However, these mandates are an unnecessary 
intrusion into local clean air efforts. There are two alternatives to 
oxygenation: 1) use of ethanol blends, which are now proving successful 
in a Bay Area pilot project; 2) a computer model in which the different 
components of gasoline are formulated into a blend that meets Air 
Resources Board standards for reformulated gasoline.
    Congressman Brian Bilbray and Senator Dianne Feinstein have 
introduced amendments to the Clean Air Act repealing the oxygenation 
mandate. California should have access to the full spectrum of 
strategies, so long as emissions standards are met. This would help us 
to protect both our air and our water.
    I, Therefore, Move that this Board:
    1. Instruct the County Counsel and Chief Administrative Officer to 
review the lawsuit and make recommendations to this Board as to whether 
Los Angeles County should file an amicus brief on behalf of the 
plaintiffs;
    2. Support the Bilbray and Feinstein amendments to the Clean Air 
Act repealing the mandated use of oxygenates in gasoline;
    3. Instruct our advocates in Washington, DC, to work for passage of 
these amendments; and
    4. Send copies of this motion to the congressional leadership and 
the California congressional delegation.
                                 ______
                                 
                                  City of South Lake Tahoe,
                                                September 14, 1998.

    Hon. Diane Feinstein,
    United States Senate,
    San Francisco, CA 94105

    Dear Senator Feinstein: MTBE, a gasoline additive, is a growing 
threat to water supplies in California and, indeed, around the nation. 
In South Tahoe during the last year, we have lost 35 percent of our 
drinking water wells, supplying 17 percent of our water, duo solely to 
MTBE contamination of our underground aquifers. This is clearly a 
problem that requires immediate attention from California lawmakers and 
regulatory officials.
    The answer to the MTBE threat in South Tahoe is two-fold. First we 
need timely and efficient remediation of MTBE contamination that now 
threatens water quality. Remediation is an arduous and complicated 
process that, as yet, has not been accomplished at levels necessary to 
protect our water. Second, given the fact that the MTBE releases have 
occurred due to a variety of malfunctions and human error at gas 
stations with tank systems updated to meet 1998 underground tank 
requirements, it is reasonable to conclude that as long as MTBE is 
present in gasoline sold in South Lake Tahoe, our vulnerable 
groundwater will always be at risk.
    Various legislative and regulatory bodies proclaim their empathy at 
our plight, but despite this expressed concern, drinking water wells 
that serve our citizens are no more protected than they were a year 
ago; no plume has been remediated, any, in fact, contamination 
continues to expand,
    We are in a serious situation, and we need your help.
    We support S. 1576. The policies of the State of California, 
however, prompt us to urge Federal action further than the bill 
provides. The use of MTBE must be restricted in areas where groundwater 
has been shown to be highly vulnerable to MTBE contamination, and where 
the groundwater is the source of community drinking water.
    Thank you for consideration of this urgent matter.
            Sincerely,
                                           Hal Cole, Mayor.
                                 ______
                                 
                       South Tahoe Public Utility District,
                           South Lake Tahoe CA, September 14, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Feinstein: Please distribute this letter, urging 
support for S. 1576, to your colleagues. The South Tahoe Public Utility 
District needs a concerted governmental effort to protect our drinking 
water aquifers from the insidious intrusion of MTBE, and we hope this 
legislation can help facilitate a coordination that is sorely lacking 
between air and water concerns.
    Lake Tahoe is often called the ``jewel in the sky.'' While much 
Federal attention has been given to the problem of declining lake 
clarity, the MTBE threat to our underground aquifers is immediately 
impacting the water supply of residents and visitors in South Tahoe--
and the destruction of this natural resource deserves the same 
attention without delay.
    South Tahoe relies solely on our underground aquifers for our 
drinking water supply. Because of MTBE emanating from tank systems 
(updated to 1998 standards) at gas stations, 35 percent of our wells 
are closed, resulting in a loss of 3.4 million gallons of water a day. 
In the last year, we have lost 17 percent of our water supply due 
solely to MTBE.
    We have been informed by air specialists at EPA Region IX that the 
air quality at Tahoe is such that oxygenates are not required under the 
Clean Air Act. In a letter to the editor at the Sacramento Bee, 
California Air Resource Board Chairman John Dunlap stated that the CARB 
``has never required or even certified the use of MTBE . . . a Federal 
law approved by Congress required the use of MTBE or similar additives 
in most California gasoline...
    Given that nobody is requiring MTBE use here, we are left with a 
conundrum: Are the aquifers being destroyed to address a non-existing 
problem?
    Senator Feinstein, we are a small public agency. Our total annual 
budget for supplying water is $7 million, but by October we will have 
spent over $1 million trying to protect the drinking water from MTBE. 
We do not have the financial, technical, or legal resources to waste on 
a contaminant that public officials tell us serves no useful purpose in 
this tiny, but important, area that is a national treasure.
    Please help us. We would prefer to see legislation that 
specifically prohibits MTBE in areas, like South Tahoe, where it has 
been shown that groundwater is extremely vulnerable to MTBE 
contamination and where that groundwater is the sole source of drinking 
water. Failing an outright use restriction, we appreciate any effort 
whatsoever that will help us save our drinking water.
            Sincerely,
                                    James Jones, President.
                                 ______
                                 
                    Status of Wells Impacted by MTBE
Summary
    Wells shut down due to detections of MTBE in the well 8 (7 
operational and 1 on standby).
    Wells shut down because of proximity to MTBE plumes: 4.
    Percentile of District's wells shut down because of MTBE: 35 
percent.
    Lost production capacity due to shutdowns: 3.4 million gallons per 
day.
    Percentage of potential water production lost because of well 
closures: 17 percent.
Helen 1 & 2
    Capacity: 362 gallons per minute.
    Status: shut down in March 1998, due to a ``drive off'' at Beacon/
Ultramar 250 feet from wells.
    Beacon (South Lake Tahoe) and adjoining property are the 
potentially responsible parties.
    Concentrations in nearby monitoring well of 3,300 ppb. We have 
informed Lahontan several times of our concerns that Beacon's remedial 
action plan will not remediate offsite contamination threatening our 
wells. Beacon refuses to cooperate with STPUD efforts to investigate 
the plume.
    On September 11 Lahontan charged Beacon/Ultramar with violating 
their Amended Cleanup and Abatement Order and fined them $6,000.
    Future: These wells may be history. Additional investigation is 
required to determine the hydraulic connectivity of the wells with the 
plume.
Blackrock 1 & 2
    Capacity 165: gallons per minute.
    Status: Shutdown in November 1997
    Tahoe Tom's is the responsible party. A gasoline plume was 
originally discovered in 1990 and we suspect the new tank system also 
leaked. Lahontan has issued three Cleanup and Abatement Orders, the 
latest in 1997. A remediation system is being installed. STPUD analysis 
and modeling indicate that the remediation system is grossly inadequate 
to address the 1 foot of free product gasoline with MTBE concentrations 
of 1.2 million ppb. The MTBE plume is within 500 feet of our wells. 
Lahontan is preparing a letter directing Tahoe Tom's to improve their 
plan.
    Future: If operated, these wells will likely become contaminated 
beyond rehabilitation.
Arrowhead 1 & 2
    Capacity: 805 gallons per minute.
    Status: Shut down in September 1997. MTBE was detected at 2 ppb.
    Beacon (Meyers) is the responsible party. The MTBE plume is 1,300 
feet long, with concentrations in excess of 28,000 ppb. New tank system 
leak has been stopped, but secondary containment system is 
nonoperational. Environmental consultants called a work stoppage due to 
lack of payment. Lahontan is taking over remediation efforts.
    In July 1998 Lahontan fined the owner of the Beacon $84,000. 
Lahontan received $100,000 from the state to initiate cleanup 
activities and has applied to the state for an additional $500,000 to 
conduct remediation.
    Future: These wells will be destroyed by the District and replaced 
with a deeper well at the same site. The new well will extend below an 
extensive thick clay aquitard that will protect it from the MTBE plume.
Tata Lane No. 4
    Capacity: 70 gallons per minute.
    Status: Shut down in July 1998 when MTBE concentrations reached 37 
ppb. USA gas station is the responsible party. Original gas plume was 
discovered in 1983, and the new tank system continued to leak. The 
plume is 1,500 feet long. Lahontan issued three Cleanup and Abatement 
Orders. The current remediation system is being expanded, but the 
addition extraction wells are not placed so that they will protect the 
well from continuing contamination, nor are they large or deep enough.
    In August, upon receiving a strangely worded suggestion from 
Lahontan that they close the pumps to look for the leak, station owners 
found and stopped the leak. On September 10, Lahontan charged station 
owners with violating Cleanup and Abatement Orders and fined them 
$292,500.00
    Future. District will abandon the well. It may be destroyed, or it 
may become part of USA's offsite remediation system.
Tata Wells 1, 2 & 3
    Capacity: 550 gallons per minute.
    Status. Shut down in August 1998. On September 8, the District 
received lab results showing MTBE contamination in the wells in 
concentrations ranging between 0.12 and 0.22 ppb.
    USA gas station is the responsible party. These wells represent a 
significant portion of our backup, short-term, emergency water supply.
    Future: Unknown at this time.
Julie Well
    Capacity: 205 gallons per minute.
    Status: Shut down on September 10. On September 2 the District 
received lab results showing MTBE contamination at 0.25 ppb. Water from 
the Julie well was treated by an air stripper that has proven to be 
effective in removing small levels of MTBE.
    USA gas station is the potentially responsible party.
    Future: Unknown at this time.
South Y Well
    Capacity: 200 gallons per minute (On standby)
    Status: Taken off standby status and shut down on September 4. On 
September 2, the District received lab reports showing MTBE 
contamination at 0.11 ppb.
    USA gas station is the responsible party.
    Future: Probable retirement.
Paloma Well
    Capacity: 2,500 gallons per minute.
    Status: Running at half capacity.
    These wells represent the heart of our system. Terrible Herbst is 
the responsible party. Gasoline plumes first discovered in 1984. 
Lahontan issued three Cleanup and Abatement Orders, the latest in 1997. 
Terrible Herbst says that it plans to expand its remediation system 
and, in the meantime, continues to operate. Concentrations of MTBE 
appear to be low, but no deep aquifer monitoring has been done. We have 
requested that Lahontan require Terrible Herbst to conduct sampling at 
deeper depths.
    Future: Continue to monitor the situation.
                                 ______
                                 
                [From the South Tahoe Utility District]
                       Help Make Tahoe MTBE Free
What is MTBE?
    MTBE, a gasoline additive, is increasingly found In California 
lakes, streams and groundwater. It has contaminated water in almost 
every one of the 50 states, the EPA is expected to report In a study 
this summer.
    Contamination by MTBE is a serious threat to South Tahoe's drinking 
water sources, and the issue demands attention now. Our drinking water 
is safe, but as long as MTBE is present in gasoline, our wells are at 
tremendous risk.
    MTBE, or methyl tertiary butyl ether, is an oxygen-rich gasoline 
additive. Beginning in 1991, the Federal EPA required oil companies to 
use additives to reduce automobile emissions, and MTBE was the 
additives of choice in California.
Is MTBE contaminating Tahoe's groundwater?
    Yes. Water suppliers nationwide are now beginning to test their 
drinking water sources for MTBE, but as more testing is done, more 
contamination is found. The South Tahoe Public Utility District was 
among the first to test for the presence of MTBE, beginning in 1996.
    In the summer of 1998, ten of the District's 34 drinking water 
wells were turned off due to the presence of MTBE in nearby plumes or, 
in three cases, because MTBE had reached the wells.
    Following, a vigilant action plan, and at the cost of several 
hundreds of thousands of dollars, the District is able to provide MTBE-
free drinking water to its customers by turning off vulnerable wells 
and re-directing water supplies from clean wells.
Where does MTBE come from?
    All eyes have been focused on old underground tanks that service 
stations used to store their gasoline supplies. But we are now finding 
that, even after the old tanks are replaced by new, double-hulled, 
fiberglass tanks, MTBE is still escaping. In short, it seems that the 
new tank systems are no guarantee against contamination.
Is MTBE a health threat?
    Research on potential health effects is ongoing, and the District 
supports such research, but the real problem is that MTBE's taste and 
odor makes contaminated drinking water unacceptable. MTBE has an 
unpleasant taste and odor--similar to turpentine--and is identifiable 
when concentrations reach 2 to 15 parts per billion.
    MTBE has no known acute (immediate) health effects at levels that 
people would be exposed to, if a person could drink water wish MTBE in 
it. It is relatively new substance found in ground water, however, and 
has not been subjected to extensive testing for chronic (long term) 
health effects. There is some evidence that, at high lifelong 
exposures, it is a possible carcinogen.
Is the drinking water in South Lake Tahoe safe?
    Yes. The South Tahoe PUD is taking every precaution to ensure the 
safety of its drinking water, and has implemented even more stringent 
standards than is required by state and Federal Government. The U.S. 
EPA recommends that ``keeping concentrations in the range of 20 to 40 
[parts per billion] of water or below'' will avert unpleasant taste 
effects and will protect consumers from potential health effects. The 
State of California has set an ``action level'' of 35 parts per billion 
to protect against adverse health effects. It is anticipated that 
California will be making state standards even tougher.
    No drinking water from the South Tahoe PUD has approached these 
levels. Aggressively protecting the water supplies the District takes a 
precautionary approach and shuts down wells that pose a problem before 
MTBE destroys our water sources.
What Is Being Done?
    The vulnerability of South Tahoe's drinking water sources demands a 
vigilant approach, and the District is taking a strong stand, fighting 
to remove the sources of contamination.
    Unfortunately, the South Tahoe PUD, like many water suppliers, has 
no enforcement powers against polluters. But the District is fighting 
for regulatory action and legislation.
    The bottom line is that the South Tahoe Public Utility District 
will do everything in its power to protect Tahoe's drinking water.
                                 ______
                                 
            [From The Sacramento Bee, Letters to the Editor]
                            MTBE In Gasoline
    Dean Walters erred in his July 29 column (``Cal-EPA is not finished 
work'') when he said the Air Resources Board ordered the use of the 
additive MTBE in gasoline. The board has never required or even 
certified the use of MTBE. Those actions were taken at the Federal 
level. The U.S. Environmental Protection Agency certified MTBE as a 
gasoline additive, and a Federal law approved by Congress required the 
use of MTBE or similar additives in most California gasoline, including 
all Sacramento gasoline.
    Walters wrongly cites MTBE contamination of water as an example of 
a lack of coordination among regulators. In fact, California agencies 
have put together the nation's most comprehensive and coordinated MTBE-
monitored effort. In contrast, U.S. EPA--which is responsible for 
protecting the nation's air and water quality--opposes California's 
efforts to change the Federal law that led to the widespread use of 
MTBE. Just who needs better coordination?
                                  John D. Dunlap, Chairman,
                                   Air Resources Board, Sacramento.
                                 ______
                                 
            [From The Sacramento Bee, Letters to the Editor]
    Re: ``MTBE in gasoline,'' letter, August 20: The South Tahoe Public 
Utility District was delighted to see the letter from the ARB chairman 
declaring, ``California agencies have put together the nation's most 
comprehensive and coordinated MTBE-monitoring effort.''
    In South Tahoe, where 10 of 34 drinking water wells are out of 
commission because of MTBE, the ``monitoring'' wells are, for the most 
part, our drinking water wells. This is clearly not acceptable, and we 
are looking for funds to develop a monitoring system that would detect 
contamination before it impacts our drinking water. Perhaps Dunlap 
could extend his comprehensive and coordinated'' monitoring to Tahoe.
    We would also like to see a letter from Dunlap, informing oil 
companies that they can use ethanol instead of MTBE in areas where MTBE 
is destroying underground aquifer.
                     Dawn Forsythe, Public Affairs Officer.
              South Tahoe Public Utility District South Lake Tahoe.
                                 ______
                                 
                  South Lake Tahoe Public Utility District,
                           South Lake Tahoe, CA, September 4, 1998.

    Mike Kenny, Executive Officer,
    California Air Resources Board,
    Sacramento, CA 95819.

    Dear Mr. Kenny: On behalf of the Board of Directors of the the 
South Tahoe Public Utility District, we extend an invitation to your 
agency to explain the ARB's rules and regulations pertaining to the use 
of oxygenates in gasoline, and what the oil companies must do, 
practically, to conform to your requirements. Specifically, we invite 
the agency to a meeting with our staff on the morning of September 17, 
with a public presentation it our Board Meeting at 2 pm that afternoon.
    As you are aware, we have a tremendous problem with MTBE 
contamination of our aquifers, and we are desperate for solutions. 
Given the history of tank systems that allegedly meet the new standards 
we strongly believe that as long as MTBE is in the gasoline, our 
aquifers continue to be at risk.
    We have talked to Federal regulatory and legislative people, state 
regulators, state legislators, ethanol industry representatives, 
operators of terminals, Nevada air quality officials, and hordes of 
researchers--and I have yet to hear definitive answers to two simple 
questions: 1) Why are we deliberately putting water resources at risk; 
and A) how do we get MTBE out of gasoline in Tahoe? Your agency's 
perspective on these questions would be most enlightening. Of course, 
if you have the definitive answers, it would be stupendous.
    We have written to Crawford Tuttle asking for scientific 
justification for gasoline additives in Tahoe, and I am assuming that 
he won't mind it I share that letter with you. Our basic concern is 
that our aquifers are being destroyed by a contamination that is 
``solving'' a non-existent problem.
    Thank you for considering our situation and our request. If you 
accept our invitation, please ask your staff to coordinate with Dawn 
Forsythe, our public affairs officer She can be reached at 530-544-6474 
ext. 208.
            Sincerely,
                              Robert Baer, Control Manager.
                                 ______
                                 
                       South Tahoe Public Utility District,
                              South Lake Tahoe, CA, March 19, 1998.

    Honorable Pete Wilson, Governor,
    State of California,
    Capitol Building, First Floor,
    Sacramento, CA 95814.

    Re: Methyl Tertiary Butyl Ether (MTBE) in (gasoline

    Dear Governor Wilson: The South Tahoe Public Utility District is 
very concerned about MTBE in its water supplies. MTBE has been detected 
in three of the District's water wells and threatens two others.
    The mechanisms of MTBE contamination include leaking underground 
storage tank systems, other gasoline storage and distribution systems, 
gasoline-powered water craft storm water runoff, and rainfall washout. 
Once in the water supply, MTBE is difficult and expensive to remove. 
MTBE is soluble and mobile, and it is persistent in the subsurface 
environment. The health effects of MTBE are not completely understood, 
but MTBE is a possible carcinogen and has a low taste and odor 
threshold. The most effective way to prevent additional impacts to 
water supplies and public health from MERE is to cease its use as an 
additive to motor vehicle fuel.
    The Board of Directors of the South Tahoe Public Utility District 
urges you to employ your executive powers to achieve removal of MTBE 
and other ether oxygenates as additives to motor vehicle fuels in the 
State of California in order to protect the State's valuable water 
resources. The South Tahoe Public Utility urges you to work with 
appropriate authorities at the Federal level to achieve this 
prohibition and to identify alternative methods to achieve acceptable 
air quality objectives.
    If you or your staff has questions, please call Mr. Rick Hydrick, 
Manager of Water Operations, at (530) 544-6474, extension Z38.
            Sincerely,
             James R. Jones, President, Board of Directors.
                                 ______
                                 
                South Tahoe, CA, Resolution No. 2681-98
a resolution of south tahoe public utility district entreating governor 
   pete wilson to protect the drinking water of south lake tahoe, by 
                prohibiting the use of mtbe in gasoline
    Whereas, MTBE poses a serious threat to the drinking water of South 
Tahoe by continuing to contaminate its sources of drinking water; and
    Whereas, due to the vigilance of the South Tahoe Public Utility 
District, our drinking water is safe, but as long as MTBE is present in 
gasoline our wells are at risk; and
    Whereas, MTBE's taste and odor makes contaminated drinking water 
unacceptable; and
    Whereas, citizens of this State have a right to demand that the 
sources of drinking water he MTBE-free;
    Now, Therefore Be It Resolved, That the Board of Directors of the 
South Tahoe Public Utility District hereby entreats Governor Pete 
Wilson to take immediate action to prohibit the use of MTBE, as an 
additive to gasoline.
    Passed and Adopted at a duly held Regular Meeting of the Board of 
Directors of the South Tahoe Public Utility District on the 16th day of 
July, 1998:
                                 ______
                                 
                         South Lake Tahoe Chamber Commerce,
                       South Lake Tahoe, CA 96160, August 25, 1998.

    Felicia Marcus,
    U.S. EPA Region IX,
    Policy and Management Division,
    San Francisco, CA 94105-3901.
    Dear Administrator Marcus: Last year the people of Lake Tahoe 
witnessed a great outpouring of concern by a multitude of Federal 
agencies, the EPA included. This concern manifested itself in a true 
Federal commitment to preserving the clarity of Lake Tahoe. The 
commitment will continue to be a primary factor in the preservation of 
one of this country's most beautiful scenic areas. But there is an 
insidious problem that demands everyone's immediate attention, now--
MTBE threatens the drinking water of South Lake Tahoe.
    South Tahoe is more vocal than many localities about the threat to 
its drinking water. While some may think that it's best for a Chamber 
of Commerce to be silent, for fear of scaring our important tourist 
market, our businesses strongly believe that, in the long term, 
protecting our water resources is absolutely necessary to the future 
viability of Tahoe as a tourist destination.
    I understand the EPA Region IX will be deciding whether South 
Tahoe's situation deserves Agency assistance--financial, technical, 
legal, or a combination of all three. Our Chamber of Commerce urgently 
requests any assistance you can provide.
    Ultimately, however, we are finding that MTBE is a constant and 
continual threat as long as it remains in gasoline sold in the Tahoe 
Basin. As this contaminant moves toward the lake at 1 to 10 feet per 
day, depending on the hydrogeology. it has the potential to undo all 
our collective water quality efforts. Above all, please help us find a 
way to prohibit the use of this contaminant in South Lake Tahoe.
            Sincerely,
                         Duane Wallace, Executive Director.
                                 ______
                                 
                       South Tahoe Public Utility District,
                             South Lake Tahoe, CA, August 24, 1998.

    Felicia Marcus,
    U.S. EPA Region IX,
    San Francisco, CA 94105-3901.

    Dear Administrator Marcus: Over 50 years ago John Kennedy gave an 
angry speech to his colleagues about the lack of congressional will to 
address the housing crisis after the war. He ended his speech on note 
of bitter resignation. ``I am going to have to go back to my district 
Saturday, a district that sent probably more boys per family into this 
last war than any in the country, and when they ask me if I was able to 
get them any homes, I will have to answer, not a one--not a single 
one.''
    The Board of Directors and management of the South Tahoe Public 
Utility District feel that same frustration about the apparent lack of 
governmental will to address the MTBE crisis in South Tahoe.
    We were heartened to receive a visit from three of your staff: Jane 
Freeman, Laurie Williams and Steve Linder. I understand that they will 
be submitting a report to Julie Anderson, with recommendations for the 
agency to consider. I cannot emphasize enough how much we need the 
Agency's help. When people ask if we were able to get EPA assistance on 
any of our concerns, we don't want try answer as Kennedy did. We 
desperately want to assure people that the U.S. EPA recognizes the 
terrible impact that MTBE has on our drinking water sources and that 
the Agency is confirming its recognition with the allocation of 
resources to address the problem.
    The 1996 National Drinking Water Program Redirection Strategy 
states that ``last, but not least, EPA is looking to States, 
communities and other stakeholders for the development of innovative 
partnerships and approaches for protecting drinking water. The Agency 
continues to welcome stakeholders' ideas.'' Especially in view of 
California's lack of total commitment to groundwater protection, i.e., 
nonparticipation in the state revolving fund under the SDWA, an 
innovative Federal-local partnership to protect Tahoe's drinking water 
is more than appropriate. It is absolutely necessary.
    Borrowing from Kennedy again, we want the word to go forth that EPA 
is working with us to protect Tahoe's drinking water from MTBE.
            Yours truly,
                                 Bob Baer, General Manager.
                                 ______
                                 
                       South Tahoe Public Utility District,
                               South Lake Tahoe, CA, July 30, 1998.

    Niloufar Glosson,
    U.S. EPA,
    San Francisco, CA 94105.

    Dear Niloufar: Please extend our gratitude to Administrator Marcus 
for he attention to the tremendous MTBE problem we face in South Tahoe. 
Every agency, board and elected official we have turned to has told us 
that they are doing what they are supposed to be doing--and no one is 
decisively exploring options that would actually protect our most 
important resource. We're hearing marvelous statements of concern, but 
we see no action.
    We are aware that the EPA, through the National Center for 
Environmental Assessment, is addressing the research strategy for 
oxygenates in water (NCEA-98-1048). We appreciate and wholeheartedly 
support, anything the EPA can do to facilitate or accelerate the 
research needs addressed in that strategy.
    We are in a critical situation, however, requiring immediate 
action. We need three things:

  1. The current leaks of MTBE must be stopped.
  2. The current contamination must be remediated.
  3. The future contamination must be prevented.
Stopping the Leaks
    Althought the Lahontan Regional Water Quality Board has identified 
responsible parties that, Lahontan says, are currently leaking, no 
regulatory agency has the will and/or the ability to take steps 
necessary to stop the leaks.
    EPA needs to step in, assume control, and order the gas stations to 
cease operations until the leaks are stopped.
Remediate the Contamination
    We have two problems with the current remediation situation. In 
most cases, no remediation is occurring (even after multiple Cleanup 
and Abatement Orders by the regional water board), and in other cases 
the ``remediation'' does not adequately protect drinking water sources.
    EPA needs to provide immediate technical and/or financial 
assistance to ensure that cleanup actions are completed in a timely 
manner and are protective of drinking water sources. The South Tahoe 
Public Utility District will likely be assuming regulatory and 
enforcement authority by adopting a Groundwater Management Plan, as 
authorized by CA AB3030, the Groundwater Management Act. EPA's 
assistance is urgently sought.
Prevent Future Contamination
    As long as MTBE is in the gasoline, our drinking water is at risk. 
While we may be able to operate wells, keeping contamination within 
health standards for a short amount of time, the water would become and 
would continue to be undrinkable. MTBE hits suddenly and there is 
little time to react with replacement wells or wellhead treatment. 
Rather than face the problem after the contamination has destroyed a 
well, we strongly believe in the precautionary principle.
    EPA, using emergency authority, needs to prohibit the use of MTBE 
in groundwater basin where the groundwater is the sole source of 
drinking water and that groundwater is highly vulnerable to 
contamination by MTBE, as evidenced by multiple and ongoing detections 
in the source water. If EPA wants to do it at the request of a 
constitutionally derived public agency, we hereby request it.
    One thing further . . . We need an MTBE Summit at South Lake Tahoe, 
bringing together all the parties at the local, State, and Federal 
level who have some finger in the MTBE pie. We would welcome and 
encourage EPA sponsorship and facilitation of such a summit (perhaps in 
the manner that Dr. Lynn Goldman has conducted the EDSTAC process).
    Of course, we are available and eager to provide you with all the 
information you need.
    Thank you again, for your agency's attention to this most urgent 
matter.
            Sincerely,
                     Dawn Forsythe, Public Affairs Officer.
                                 ______
                                 
                     San Diego County Board of Supervisors,
                                 San Diego, CA, September 14, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Feinstein: The San Diego County Board of Supervisors 
supports S. 1576, your legislation to allow California's cleaner-
burning regulation to apply in lieu of Federal formulated gasoline 
requirements currently mandated in most of Southern California and the 
Sacramento region.
    S. 1576 would give California the flexibility to implement more 
stringent standards without having to meet Federal regulations based on 
the content of the gasoline. It would allow California to focus on an 
``outcome'' based reformulated gasoline standard rather than content-
based Federal fuel requirements. This would be advantageous since 
refiners would have the option to pursue different but equally 
effective fuel formulations which result in the highest possible health 
and environmental benefits for San Diego and other areas throughout 
California. Additionally, they would be able to utilize the flexibility 
built into the California program and avoid needless paperwork 
requirements, resulting in lower production costs for California 
gasoline and lower gas prices for consumers.
    Please work with your colleagues in the Senate to expedite action 
on S. 1576 or other legislation that would provide the flexibility to 
pursue different but equally effective fuel formulations intended to 
significantly improve Californians air quality.
            Sincerely yours,
                                        Greg Cox, Chairman.
                                 ______
                                 
                       East Bay Municipal Utility District,
                                       Oakland, CA, April 15, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510-0504.

    Dear Senator Feinstein: On behalf of the East Bay Municipal Utility 
District (EBMUD), I am pleased to inform you that we support your S. 
1576, which would provide that California's cleaner burning gasoline 
regulations would apply in California in lieu of existing Federal 
regulations as long as equivalent or greater reductions in emissions of 
ozone-forming compounds and toxic air contaminants are achieved.
    EBMUD is a local government agency responsible for providing water 
service to approximately 12 million customers in 20 cities and 16 
unincorporated communities in portions of Alameda and Contra Costa 
Counties, and wastewater treatment services for more than 600,000 
customers in the East Bay.
    We believe your S. 1576 would improve flexibility in how gasoline 
is formulated while preserving the stringent minimum emission standards 
in the Clean Air Act, so that gasoline refiners would have alternatives 
to the use of methyl tertiary butyl ether (MTBE). Your measure would 
strike an important balance in ensuring high standards of air quality 
while moving forward on alternative fuel formulations which may be less 
threatening to human health and drinking water quality.
    As you know, existing law results in overlapping application of the 
state and Federal reformulated gasoline regulations. This creates a 
substantially reduced opportunity for gasoline refiners to take 
advantage of the flexibility in the California program's reformulation 
rules without falling out of compliance with Federal regulations. As a 
result, compliance with the Federal regulations is still required, 
despite the fact that the California standards have demonstrated 
achievement of equal or superior air quality benefits. Although the 
Federal law and regulations do not require the use of MTBE 
specifically, the Federal regulations do require the use of a fuel 
oxygenate. MTBE has become the oxygenate of choice because of its high 
octane rating, low production cost, and ability to readily mix with 
other gasoline components.
    We very much appreciate your leadership on this issue. Ensuring 
that gasoline consumed in California is formulated in such a way that 
there arc minimized threats to drinking water quality and continued 
protection of air quality is an important public health and 
environmental protection effort.
    Randele Kanouse, Special Assistant to the General Manager, is 
available to answer any questions you may have concerning our position 
on S. 1576. Mr. Kanouse may be reached at (916) 443-6948.
            Sincerely,
                                          Dennis M. Diemer.
                                 ______
                                 
             Statement of Santa Clara Valley Water District
    The Santa Clara Valley Water District (SCVWD) is the water resource 
management serving the wholesale water supply and flood protection 
needs of the 1.6 million residents in Santa Clara County, California, 
with its thriving Silicon Valley economy. In fulfilling its water 
supply mission, SCVWD owns and operates ten reservoirs (total capacity 
of approximately 163,000 acre feet), three water treatment plants 
(total capacity 220 million gallons per day), and 393 acres of 
groundwater recharge ponds. SCVWD is also responsible for protecting 
water quality of its local groundwater basin that provides 
approximately 50 percent of' the County's water supply needs.
    The Santa Clara Valley Water District supports S. 1576 since it 
would provide flexibility for California to meet air quality standards 
without the need for problematic ether oxygenates such as Methyl 
Tertiary Butyl Ether (MTBE). We are very concerned with contamination 
of our water supplies from the widespread use of MTBE.
    SCVWD has been monitoring MTBE in its water sources for nearly 2 
years and continues to find it. Monitoring of our imported supplies 
from the Sacramento-San Francisco Bay-Delta has shown concentrations of 
1-2 parts per billion (ppb). Monitoring has also shown concentrations 
up to 23 ppb at three of our local surface water reservoirs where we 
allow motor powered watercraft recreation.
    Our greatest concern, however, is contamination of local 
groundwater basins from leaking underground storage tanks. The SCVWD 
operates a Leaking Underground Storage Tank Oversight Program (LUSTOP) 
to assist State regulators in this area. Approximately 80 percent of 
underground storage tanks sites that are listed as cases in our Leaking 
Underground Storage Tank Oversight Program (LUSTOP) have monitored for 
MTBE. About 74 percent (292 of 395) of the monitored sites are finding 
MTBE, many at very high levels. The attached table shows the 
concentration ranges for these leaking sites and 86 percent of these 
cases show concentrations of MTBE: greater than the State Action Level 
of 35 ppb. This phenomenal rate of MTBE contamination is in the shallow 
groundwater aquifers. Our concern is that this contamination will 
eventually impact water supply wells deeper in the aquifer. So far, one 
public water supply well in the County has been impacted; however, the 
source investigation of this impacted well depicts another problem with 
MTBE. Because of its high mobility, MTBE plumes are very challenging to 
define and cleanup since they are long and narrow. A very detailed 
investigation of the local geology is required to assess the impact. 
Two nearby gasoline stations have been identified as potential sources 
of MTBE. Both have state-of-the-art, upgraded underground storage tank 
systems, yet both are showing contamination. We are still investigating 
if the tanks are actually leaking, or if these are previous releases. 
Because of MTBE's mobility, we do not believe the current data set 
fully represents the severity of MTBE contamination from leaking tanks 
since this data was gathered from fixed monitoring stations at each 
site.
    The California Department of Health Services has a requirement to 
promulgate a secondary drinking water standard for MTBE by July 1, 
1998, and a primary standard by July 1, 1999. The Department of Health 
Services has proposed a secondary standard of 5 ppb based on the taste 
and odor threshold of the most sensitive individuals. This would be a 
difficult standard to meet given the amount of MTBE currently entering 
the environment. Regardless of the standard, we do not believe 
consumers would accept a water supply that tastes and smells like 
turpentine.
    Several oil companies have publicly indicated they can meet air 
quality emission standards without the addition of an oxygenate. This 
would preclude the need for widespread use of MTBE.
    Given the widespread contamination of the shallow groundwater 
basins from leaking underground storage tanks, the mobility and 
persistence of MTBE, and the probability of a stringent water quality 
standard, we have serious concerns that large portions, or perhaps all 
of our groundwater basins could become unusable as a water supply 
source due to MTBE contamination. We feel this would be too great a 
price to pay for improvements in air quality when those same 
improvements could be obtained without oxygenates, or with non-ether 
based oxygenates. That is why we support Senator Feinstein's bill as a 
way to bring much needed flexibility to the system. We request your 
careful consideration and thank you for the time.
                                 ______
                                 
                Ventura County Air Pollution Control Board,
                                   Ventura, CA 93003, May 12, 1998.

    Senator Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Feinstein: The Ventura County Air Pollution Control 
Board is pleased to support H.R. 630, the bill you are sponsoring in 
the Senate to provide California greater authority over its clean air 
program by allowing California's cleaner burning gasoline regulation to 
apply in lieu of Federal reformulated gasoline regulations, as long as 
these regulations achieve equivalent or greater reductions in emissions 
of ozone-forming compounds and toxic air contaminants.
    Refiners must now simultaneously implement California's cleaner 
burning gasoline regulations and the U.S. Environmental Protection 
Agency's regulations for reformulated gasoline in most of Southern 
California (including Ventura County) and Sacramento. This results in 
regulatory duplication and overlap without any additional benefit in 
air quality.
    Our Board supports cost-effective regulations that meet clean air 
goals. Elimination of this regulatory overlap will provide Californians 
equal or better air quality at less cost.
            Sincerely,
                                     Susan K. Lacey, Chair.
                                 ______
                                 
Air Pollution Control Board Resolution Before the Board of Supervisors 
              of the County of Amador, State of California
    In the matter of: Resolution Requesting and Supporting the ban of 
the use of Methyl Tertiary Butyl Ether (MTBE)
                         Resolution No. 98-089
    Whereas, Methyl Tertiary Butyl Ether (MTBE) is one of a group of 
chemicals called fuel oxygenates that must be added to gasoline under 
Federal and State regulations; and
    Whereas, MTBE is airborne through car exhausts and other internal 
combustion engines add it settles on our snow pack and roadways 
insulating its way into our groundwater, rivers and streams, ultimately 
gravitating into our drinking water impoundments; and
    Whereas, the suspected carcinogen, MTBE, is beginning to appear in 
California's drinking water storage impoundments and groundwater 
supplies; and
    Whereas, research indicates that fiberglass storage tanks installed 
prior to 1990 will react with MTBE and ultimately leak into the ground 
waters; and
    Whereas, people can detect objectionable tastes and odors caused by 
MTBE well below levels considered to pose a health risk; and
    Whereas, threat to the public health of MTBE in our drinking water 
is not an acceptable risk to endure for the small reduction in air 
pollution gained by adding MTBE to our gasoline; and
    Whereas, there appears to be other oxygenates to substitute for 
MTBE.
    Therefore, Be It Resolved by the Board of Supervisors of the County 
of Amador, State of California, that said Board does hereby request and 
support the ban of the use of MTBE as a fuel oxygenate.
    The foregoing resolution was duly passed and adopted by the Board 
of Supervisors of the County of Amador at a regular meeting thereof, 
held on the 10th day of March 1998.
                                 ______
                                 
                                  City of Santa Monica, CA,
                                                    March 20, 1997.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Feinstein: Thank you for your efforts to secure the 
assistance of the United States Environmental Protection Agency on the 
MTBE contamination of Santa Monica's drinking water. EPA's March 14 
announcement that they will bring their enforcement power to bear was 
indeed good news for our City.
    We believe that what happens in Santa Monica will set the tone for 
how the Nation handles this new threat to safe drinking water. EPA's 
regulatory enforcement and technical expertise should quickly restore 
Santa Monica's water and set proper precedent for the region and the 
nation. Overall, the benefit is in the cumulative effect of a 
coordinated enforcement strategy with local, state and Federal 
authorities.
    Thank you again for securing USEPA's strong involvement.
            Sincerely,
                                       Pam O'Connor, Mayor.
                                 ______
                                 
                      County of Lake, Board of Supervisors,
                               Lakeport, CA 95453, January 9, 1998.

    Senator Dianne Feinstein,
    Washington, DC 20510.

    Dear Senator Feinstein and Representative Bilbray: We are 
requesting your assistance in a matter of significant importance to 
California and Lake County, the passage of H.R. 630 introduced by 
Congressman Brian Bilbray. Under this bill, the California cleaner 
burning gasoline regulations would apply in California in lieu of the 
Federal reformulated gasoline regulations as long as the California 
regulations achieve equivalent or greater reductions in emissions of 
ozone-forming compounds and toxic contaminants are not increased. Most 
importantly, the California regulations would allow MTBE, a pollutant 
of much concern to water agencies and the public, to be removed from 
gasoline without giving up the environmental benefit needed for air 
quality.
    California has historically faced the most challenging and 
intractable air pollution problems in the nation, and we have been 
creative in our solutions. Presently for fuels standards in our state 
the California and Federal standards are both applied.
    Unfortunately, the overlapping applicability of the state and 
Federal reformulated gasoline regulations substantially reduces the 
extent to which refiners can take advantage of the flexibility built 
into the California program. Refiners are required to comply with the 
Federal Act even though the California predictive model shows that a 
different formulation will achieve equivalent or greater air quality 
benefits.
    The greatest practical impact of H.R. 630 would involve gasoline 
oxygenate requirements. The Federal regulations impose a year-round 
minimum oxygen content standard of 2.0 weight percent. The California 
regulations, on the other hand, allow refiners to use the predictive 
model to reduce or eliminate the use of oxygenates outside California 
Independent Petroleum Association the winter months as long as the 
refiner's gasoline blend achieves toxics and ozone-forming emissions 
benefits equivalent to the benefits from gasoline meeting otherwise 
applicable California oxygen content standard of 1.9-2.2 weight 
percent. This ability is particularly important concerning the presence 
of MTBE in ground and recreational surface waters. It is necessary to 
timely allow viable alternatives to MTBE, if equivalent performing 
clean burning fuels are proposed by gasoline manufacturers. H.R. 630 
would encourage a more publicly acceptable fuel and competitive market 
for California.
    H.R. 630 is crafted to assure that Californians can expect to have 
their health protected. The California gasoline regulations have been 
approved by the U.S. EPA as part of your State Implementation Plan, and 
are thus federally enforceable. The California regulations would apply 
in lieu of the Federal regulations only if they will achieve equivalent 
or greater emissions reductions. This seems to be a most reasonable 
approach to the benefit of all parties.
    For the reasons above, as well as a need for encouraging clean 
burning gasoline that is friendly to our water resources, the Lake 
County Board of Supervisors requests your support for H.R. 630. It is 
our understanding that Senator Feinstein will soon author a companion 
bill in the Senate, and we ask that you also please support that 
effort.
    Thank you for your attention and anticipated support on this 
matter.
            Sincerely,
                                   Louise Talley, Chairman,
                                   Board of Supervisors and LCAQMD,
                                 ______
                                 
              California Independent Petroleum Association,
                                 Sacramento, CA, February 11, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Feinstein: The California Independent Petroleum 
Association (CIPA) would like to express support for your legislation, 
S. 1576. As you may know, CIPA is a non-profit trade association 
representing approximately 500 companies involved in the exploration 
and production of oil and natural gas in California.
    California has had a long history of regulating fuels in the state 
to improve air quality, predating the adoption of the Federal 
Reformulated Gasoline (RFG) program under the 1990 amendments to the 
Clean Air Act. Today, refiners and marketers of fuels in California 
find themselves having to comply with conflicting and duplicative 
Federal and state requirements. This adds complexity and cost to 
producing California RFG, with absolutely no commensurate benefit to 
the environment.
    Contrary to the Federal RFG program, the California RFG program 
allows refiners to develop the most cost-effective formulation of 
gasoline, based on performance in reducing emissions. California RFG 
has been demonstrated to out-perform Federal RFG in reducing emissions, 
and the California program is federally enforceable as part of 
California's State Implementation Program.
    S. 1576 would eliminate the overlap in California between the state 
and Federal programs, while neither mandating nor banning any 
formulation or components used in making California RFG. One of CIPA's 
main objectives is to promote policies that allows flexibility for the 
private sector to develop the most innovative manner to achieve the 
standards set by government. S. 1576 encourages such innovation while 
maintaining clean air standards.
    We have contacted the California delegation expressing support for 
S. 1576 and H.R. 630 requesting they cosponsor this legislation.
    If we can provide additional assistance on this matter, please do 
note hesitate to contact me at (805) 395-5318.
            Sincerely,
                                             David Gilbert,
                      Director of Environmental and Public Affairs.
                                 ______
                                 
                                                     March 6, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Feinstein: We, the undersigned, would like to express 
our strong support for S. 1576. It would eliminate superfluous Federal 
requirement for gasoline marketed in California as long as California 
Reformulated Gasoline (RFG) has equivalent or better emission reduction 
performance relative to Federal RFG.
    California has had a long history of regulating fuels in the state 
to improve air quality, predating adoption of the Federal RFG program 
under the 1990 amendments to the Clean Air Act. Today, refiners and 
marketers of fuels in California find themselves having to comply with 
conflicting and duplicate Federal and state requirements. This adds 
complexity and cost to producing California RFG with absolutely no 
commensurate benefit to the environment.
    S. 1576 would eliminate the overlap in California between the state 
and Federal programs. It will provide greater flexibility in 
formulating and producing California RFG, while still assuring that the 
high standards for reducing emissions are maintained. These state 
requirements are mandated by California RFG regulations which are 
federally enforceable as part of California's State Implementation 
Plan. We applaud your leadership in introducing this important 
legislation and urge Congress to enact this bill into law.
                                 Doug Henderson, President,
                              Western States Petroleum Association.

               Philip T. Cavanaugh, V.P. Federal Relations,
                                               Chevron Corporation.

          James C. Pruitt, V.P. Federal Government Affairs,
                                                       Texaco, Inc.

              Evelyn Gibson, Government Relations Director,
                  California Independent Oil Marketers Association.

                       Steve Ward, V.P. Government Affairs,
                                                 Shell Oil Company.

                    James J. Rouse, V.P. Washington Office,
                                                 Exxon Corporation.

                              R. Timothy Columbus, Counsel,
             Society for Independent Gasoline Marketers of America.

              Ann Farner Miller, V.P. Government Relations,
                                                 Tosco Corporation.

  Sandra G. Swirski, Manager, Federal Government Relations,
                                                 Mobil Corporation.
                                 ______
                                 
              California Independent Petroleum Association,
                                  Sacramento, CA, January 23, 1998.

    Honorable Duncan Hunter,
    U.S. House of Representatives,
    Washington, DC 20515.

    Dear Congressman Hunter: The California Independent Petroleum 
Association (CIPA) would like to express support for H.R. 630. As you 
may know, CIPA is a non-profit trade association representing 
approximately 500 companies involved in the exploration and production 
of oil and natural gas in California.
    California has had a long history of regulating fuels in the state 
to improve air quality, predating the adoption of the Federal 
Reformulated Gasoline (RFG) program under the 1990 Clean Air Act 
Amendments. Today, refiners and marketers of fuels in California find 
themselves having to comply with conflicting and duplicative Federal 
and state requirements. This adds complexity and cost to producing 
California RFG, with absolutely no commensurate benefit to the 
environment.
    Contrary to the Federal RFG program, the California RFG program 
allows refiners to develop the most cost-effective formulation of 
gasoline, based on performance in reducing emissions. California RFG 
has been demonstrated to out-perform Federal RFG in reducing emissions, 
and the California program is federally enforceable as part of 
California's State Implementation Program.
    H.R. 630 would eliminate the overlap in California between the 
state and Federal programs, while neither mandating nor banning any 
formulation or components used in making California RFG. One of CIPA's 
main objectives is to promote policies that allows flexibility for the 
private sector to develop the most innovative manner to achieve the 
standards set by government. h.r. 630 encourages such innovation while 
maintaining clean air standards.
    If you have not already cosponsored H.R 630, please contact 
Congressman Bilbray to express your support for this vital bill.
            Sincerely,
                                             David Gilbert,
                      Director of Environmental and Public Affairs.
                                 ______
                                 
          California Independent Oil Marketers Association,
                                  Sacramento, CA, October 23, 1997.

    Honorable Thomas J. Bliley, Jr., Chairman,
    Committee on Commerce,
    U.S. House of Representatives,
    Washington, DC 20515.

    Dear Chairman Bliley: The California Independent Oil Marketers 
Association (CIOMA) strongly supports H.R. 630 (Bilbray), pertaining to 
reformulated gasoline regulations. We urge the committee to pass the 
bill in order to simplify these regulations and to eliminate the 
mandatory oxygenate requirement for California reformulated gasoline.
    HR. 630 would simplify the transport and storage of gasoline in 
California by allowing petroleum marketers, and the suppliers who 
refine reformulated gasoline in California, to meet a single set of 
regulations governing the composition of gasoline, rather than 
complying with both Federal and state regulations. Currently, the two 
sets of regulations conflict to some degree, resulting in some areas of 
the state being required to use a different form of gasoline than other 
parts of the state. The Federal requirements for these areas result in 
the need for additional transportation and storage of these products 
which add to the cost of this fuel. In addition, the Federal 
requirement for a minimum oxygen volume in gasoline also has raised 
issues regarding the public health impacts and environmental benefit of 
reformulated gasoline. California reformulated gasoline regulations do 
not have this requirement.
    The California Independent Oil Marketers Association (CIOMA) 
represents approximately 500 petroleum marketing businesses who sell 
gasoline to agricultural government, and commercial consumers. In 
addition. our members own and operate numerous retail gasoline service 
stations and cardlock systems. Gasoline is an important part of our 
members' businesses. CIOMA has worked very hard with the California Air 
Resources Board, the California Energy Commission. and the major oft 
companies to ensure public acceptance of California reformulated 
gasoline and its environmental and health benefits.
    We urge members of your committee to support H.R, 630 in order to 
increase the flexibility refiners and downstream fuel sellers, like our 
members, have in meeting the regulations for reformulated gasoline. 
H.R. 630 reduces duplicative regulations that result in no 
environmental benefit as well as numerous reporting and recordkeeping 
requirements with which many of our members must comply. In short. H.R. 
530 would permit California reformulated gasoline regulations to 
supersede Federal regulations only if California's regulations achieve 
the same or greater emissions reductions from ozone-depleting compounds 
and toxic air contaminants. This measure provides the petroleum 
Industry the flexibility it needs to create the cleanest gasoline 
available today while protecting both public health and the 
environment. Once again. we urge your support of the measure. Please 
contact me at 916-646-5999 if you have any questions about CIOMA's 
position.
            Sincerely,
       Evelyn Parker Gibson, Government Relations Director.
                                 ______
                                 
                                 California State Senate,  
                     Office of Senator Richard L. Mountjoy,
                                Sacramento, CA, September 14, 1998.

    Senator John Chafee, Chairman,
    Committee on Environment & Public Works,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Chafee: This is to express strong support for S. 1576, 
which will provide California greater flexibility in meeting Federal 
emission requirements as long as reformulated gasoline meets equivalent 
or greater reductions in emissions of ozone forming compounds and toxic 
air contaminants.
    When the chemical MTBE was added to California's gasoline, we were 
not told that it would threaten our water supply. We were not told that 
MTBE could jeopardize our health.
    California depends heavily on water and is very sensitive about 
contamination of this vital resource. MTBE is threatening that precious 
resource.
    Water districts across California are now testing for MTBE. This 
chemical has been detected in water supplies across California, raising 
concerns of public officials statewide. MTBE has been found in public 
drinking water supplies. in private drinking water wells, and in 
groundwater resources, including lakes and reservoirs MTBE has been 
detected in Anderson Reservoir, Lake Berryessa. Calero Reservoir, 
Camanche Reservoir, Canyon Lake, Castaic Lake Reservoir, Cherry 
Reservoir, Clear Lake, Combie Reservoir, Coyote Reservoir, Donner Lake, 
Don Pedro Reservoir, El Capitan Reservoir, Lake Havasu, Lake Merced, 
Lake Skinner, Lake Tahoe, Modesto Reservoir, Pardee Reservoir, Perris 
Lake, Pyramid Lake. Rollins Lake, the Sacramento-San Joaquin Delta, San 
Pablo Reservoir, San Vicente Reservoir, Scotts Flat Lake, Shasta Lake, 
and Whiskeytown Lake Reservoir.
    Drinking water resources which have been contaminated with MTBE 
include wells at Cal State Polytechnic University at Pomona, Callegueas 
Municipal Water District. Elmira, Fruitridge Vista Water District. 
Glennville, Great Oaks Water Company, Healdsburg, Jurupa, City of Los 
Angeles, Marysville, the Presidio in San Francisco, San Bernardino, San 
Diego, Santa Monica, Sebastopol, and South Lake Tahoe.
    Public officials across California are expressing concerns about 
MTBE. In fact, resolutions have been sent to California's Governor Pete 
Wilson urging him to ban the use of MTBE by the Amador County Board of 
Supervisors, Santa Clara County Board of Supervisors, the cities of 
Campbell, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, 
Monte Sereno, Morgan Hill, and Santa Clara, Zone 7 of Alameda County 
Flood Control and Water Conservation District, Mesa Consolidated Water 
District, Santa Clara Valley Water District, and the South Tahoe Public 
Utility District. The leaders of these communities and water districts 
understand the danger of continued use of MTBE. I expect other cities, 
counties, and water districts will add their names to this growing 
list. Copies of their resolutions are enclosed.
    It takes a very small amount of MTBE to contaminate a large body of 
water. One water official told me that four gallons of MTBE will 
pollute one square mile to a depth of 30 feet. The gas we use contains 
11 percent MTBE. This means for every gallon of gasoline in a car, 
approximately one pint is MTBE.
    In the small Kern County town of Glennville, MTBE has contaminated 
private drinking water wells. Water coming from the faucets soared as 
high as 200,000 parts per billion. One family has been without water 
for a month as officials make arrangements to provide a large tank with 
water to supply the home. The town cafe, where levels of MTBE tested 
above 4,000 parts per billion, is now closed. Other businesses have 
also closed. People in Glennville have suffered a wide variety of 
illnesses since the contamination occurred.
    Recreational boating has been threatened as water districts begin 
to limit or prohibit personal watercraft and boats with outboard motors 
due to MTBE.
    The potential for environmental damage is chilling. In the State of 
Maine, one car overturned spilling gasoline containing MTBE. To date, 
that one car has been responsible for the contamination of 28 private 
drinking water wells! Also in Maine, children in one school were given 
bottled water when MTBE traveled to the school's drinking water well 
from the parking area.
    Once in our water, MTBE is difficult and extremely expensive to 
remove. How do we remove MTBE from Lake Tahoe where it has been 
detected 100 feet below the surface? How do we remove the MTBE from 
Glennville or Santa Monica? Science does not seem to have the answer of 
how to remove this chemical. which does not biodegrade. Will MTBE? with 
its high water solubility, get into fruits and vegetables that have 
been irrigated with MTBE laced water? Science does not yet know.
    When the water under homes and businesses become polluted with 
MTBE, it can effect property values. In Glennville, CA, where private 
wells have suffered extensive MTBE contamination, the assessor has 
lowered home values.
    In addition to polluting our water, there are health concerns 
associated with MTBE. Studies have shown MTBE causes cancer in animals, 
including lymphoma, leukemia, liver cancer, kidney cancer, and 
testicular cancer. A 1997 study by Dr. Nachman Brautbar concluded that 
MTBE destroys human white blood cells and is linked to auto-immune 
disease. Studies have also linked human exposure to MTBE with nausea, 
vomiting, muscle aches, eye irritation, rashes, fatigue, dizziness, 
sore throats, and coughs. MTBE is absorbed through the skin when 
showering, or bathing.
    MTBE was added to our gasoline in an effort to clean our air. 
Enclosed is a May 12, 1997, editorial from the Oil and Gas Journal 
which states that MTBE makes gasoline burn dirtier, which certainly is 
contrary to the goals of the clean air program.
    Every day that MTBE is used, the purity of our water is further 
jeopardized. I urge you to approve S. 1576 so California can clean its 
air and protect its water.
            Sincerely,
               Richard L. Mountjoy, Senator, 29th District.
                                 ______
                                 
  Resolution Before the Board of Supervisors of the County of Amador, 
                          State of California
    In the matter of: Resolution requesting and supporting the ban of 
the use of Methyl Tertiary Butyl Ether (MTBE)--Resolution No. 98-089

    Whereas, Methyl Tertiary Butyl Ether (MTBE) is one of a group of 
chemicals called fuel oxygenates that must be added to gasoline under 
Federal and State regulations; and
    Whereas, MTBE is airborne through car exhausts and other internal 
combustion engines and it settles on our snow pack and roadways 
insulating its way into our groundwater, rivers and streams, ultimately 
gravitating into our drinking water impoundments; and
    Whereas, the suspected carcinogen, MTBE, is beginning to appear in 
California's drinking water storage impoundments and groundwater 
supplies; and
    Whereas, research indicates thee fiberglass storage tanks installed 
prior to 1990 will react with MTBE and ultimately leak into the ground 
Raters; and
    Whereas, people can detect objectionable tastes and odors caused by 
MTBE well below levels considered to pose a health risk; and
    Whereas, threat to the public health of MTBE in our drinking water 
is not an acceptable risk to endure for the small reduction in air 
pollution gained by adding MTBE to our gasoline; and
    Whereas, there appears to be ocher oxygenates to substitute for 
MTBE.
    Therefore, Be It Resolved by the Board of Supervisors of the County 
of Amador, State of California, that said Board does hereby request and 
support the ban of the use of MTBE as a fuel oxygenate.
    The foregoing resolution was duly passed and adopted by the Board 
of Supervisors of the County of Amador at a regular meeting thereof, 
held on the 10th day of March 1998, by the following vote:
                                 ______
                                 
                   Campbell, CA, Resolution No. 9422
    Requesting the Governor and the Legislature to Prohibit the Use of 
Methyl Tertiary-Butyl Ether in Gasoline

    Whereas, Methyl Tertiary-Butyl Ether (MTBE) has been detected in 
the Santa Clara Valley Water District's local reservoir, imported 
water, dunking water treatment plant influent and effluent, and 
groundwater; and
    Whereas, MTBE has been detected at nearly 300 leaking underground 
storage tank sites in Santa Clara County; and
    Whereas, the mechanisms of MTBE contamination include leaking 
underground storage tank systems, gasoline-powered watercraft, storm 
water runoff, and rainfall washout; and
    Whereas, MTBE is difficult and expensive to remove once it is in Me 
water supply; and
    Whereas, MTBE is water soluble, mobile in soil, and persistent in 
the water cycle; and
    Whereas, MTBE is a possible human carcinogen.
    Now, Therefore, Be It Resolved by the City Council of the City of 
Campbell that the City Council hereby urges a prohibition on the use of 
MTBE, or any other ether oxygenate, as an additive to motor vehicle 
fuels.
    Be It Further Resolved that the City Council urges the Governor to 
employ his executive powers to achieve removal of MTBE and other ether 
oxygenates as additive to motor vehicle fuels in the State of 
California in order to protect the State's valuable water resources, 
and urges the Governor to work with appropriate authorizes at the 
Federal level to achieve prohibition and to identify alternative 
methods to achieve acceptable air quality objectives.
    Passed and Adopted, 1st day of September 1998.
                                 ______
                                 
                                          City of Milpitas,
                             Milpitas, CA 95035, September 3, 1998.

    Honorable Pete Wilson, Governor,
    Sacramento, CA 95814.

    Subject: Resolution Urging a Prohibition on the Use of MTBE in 
Gasoline

    Dear Governor Wilson: On September 1, 1998, the City Council of the 
City of Milpitas adopted Resolution No. 6810 urging you to employ your 
executive powers to prohibit the use of Methyl Tertiary-Butyl Ether 
(MTBE) and other ether oxygenates in gasoline in California. A copy of 
the Resolution is attached.
    The City of Milpitas relies on local groundwater aquifers to supply 
over 40 percent of the water needs of its customers. Contamination of 
those groundwater supplies by MTBE or other ether oxygenates would 
create a very serious water quality problem, which would be extremely 
expensive to correct. The City's water customers, which include some of 
the largest electronic firms in the world, rely on high quality water 
for human consumption as well as industrial use.
    Your efforts to prohibit the use of MTBE are appreciated.
            Sincerely yours,
                                      Henry Manayan, Mayor.
                                 ______
                                 
                   Milpitas, CA, Resolution No. 6810
a resolution of the city council of the city of milpitas requesting the 
 governor to prohibit the use of methyl tertiary-butyl ether or other 
                      ether oxygenates in gasoline
    Be It Resolved by the City Council of the City of Milpitas, 
California (``City'') as follows:
    Whereas, Methyl tertiary-butyl ether (``MTBE'') represents a threat 
to groundwater and surface water supplies in California; and
    Whereas, MTBE is difficult and expensive to remove once it is in 
the water supply; and
    Whereas, MTBE is highly soluble in water, shows a high degree of 
mobility in soils and persistence in the water and has a very low taste 
and odor threshold; and
    Whereas, although the health effects of MTBE are not well known, it 
is a possible human carcinogen; and
    Whereas, the City is responsible for developing and maintaining a 
safe, healthful, potable and reliable water supply for the more than 
62,000 residents and water customers of the City; and
    Whereas, the City's objectives include water quality protection and 
enhancement; and
    Whereas, the City relies upon groundwater to supply the water needs 
of some of its customers; and
    Whereas, MTBE has been detected at nearly 300 leaking underground 
storage tank sites in Santa Clara County; and
    Whereas, MTBE has been detected at very low levels in at least one 
drinking water well at a location in the Santa Clara Valley not within 
the City; and
    Whereas, the mechanisms of MTBE contamination include leading 
underground storage tanks, other gasoline storage and distribution 
systems, gasoline-powered water craft, storm water runoff, and rainfall 
washout; and
    Whereas, to protect the public health and welfare the California 
Department of Health Services is in the process of promulgating a 
Maximum Contaminant Level for MTBE in drinking water.
    Now Therefore, Be It Resolved, that the City Council of the City of 
Milpitas urges a prohibition on the use of MTBE or any other ether 
oxygenate as an additive to gasoline within the State of California.
    Be It Further Resolved, that the City Council of the City of 
Milpitas urges the Governor to employ his executive powers to achieve 
removal of MTBE and other ether oxygenates as additives to motor 
vehicle fuels in the Sate of California in order to protect the State's 
valuable water resources, and to work with the appropriate authorities 
at the Federal level to achieve this prohibition and to identify 
alternative methods to achieve acceptable air quality objectives.
    Passed and Adopted this 1st day of September, 1998.
                                 ______
                                 
                 Monte Sereno, CA, Resolution No. 1868
a resolution of the city council of the city of monte sereno requesting 
    the governor and the legislature to prohibit the use of methyl 
      tertiary-butyl ether or other ether oxygenates in motor fuel
    Be It Resolved by the City Council of the City of Monte Sereno 
California (``City''), as follows:
    Whereas, Methyl tertiary-butyl ether (``MTBE'') represents a threat 
to ground water and surface water supplies in California; and,
    Whereas, MTBE is difficult and expensive to remove once it is in 
the water supply; and,
    Whereas, MTBE is highly soluble in water. shows a high degree of 
mobility in soils and persistence in the water and has a very low taste 
and odor threshold; and,
    Whereas, although the health effects of MTBE are not well known, it 
is a possible human carcinogen; and,
    Whereas, the City is responsible for developing and maintaining a 
safe, healthful, potable and reliable water supply for the more than 
3000 residents and water customers of the City; and,
    Whereas, the City's objectives include water quality protection and 
enhancement; and,
    Whereas, the City relies upon ground water to supply the water 
needs of the majority of it's customers; and,
    Whereas, MTBE has been detected at nearly 300 leaking underground 
storage tank sites in Santa Clara County: and.
    Whereas, MTBE has been detected at very low levels in at least one 
drinking water well at a location in the Santa Clara Valley not within 
the City; and,
    Whereas, MTBE has been detected at very low ground levels in 
treated water purchased from the Santa Clara Valley Water District by 
the City for the distribution to some of its residents: and,
    Whereas, the mechanisms of MTBE contamination include leaking 
underground storage tanks. other gasoline storage and distribution 
systems. gasoline-powered water craft, storm water runoff. and rainfall 
washout; and,
    Whereas, to protect the public health and welfare the California 
Department of Health Services is in the process of promulgating a 
Maximum Containment Level for MTBE in drinking water:
    Now Therefore, Be It Resolved by the City Council of the City of 
Monte Sereno, California, That said City Council hereby urges a 
prohibition on the use of MTBE or any other ether oxygenate as an 
additive to motor filets within the State of California.
    Be It Further Resolved,, the City Council of the City of Monte 
Sereno urges the Governor to employ his executive powers, and the 
Legislature to adopt laws to achieve removal of MTBE and other ether 
oxygenates as additives to motor fuels in the state of California in 
order to protect the State's valuable water resources, and urges the 
Governor and the Legislature to work with the appropriate authorities 
at the Federal level to achieve this prohibition and to identify 
alternative methods to achieve acceptable air quality objectives.
    Passed and Adopted this 21st day of July 1998.
                                 ______
                                 
                  Morgan Hill, CA, Resolution No. 5213
a resolution of the city council of the city of morgan hill requesting 
  the governor and legislature to prohibit the use of methyl tertiary-
          butyl ether or other ether oxygenates in motor fuel.
    Whereas, Methyl tertiary-butyl ether (``MTBE'') represents a 
thereat to ground water and surface water supplies in California; and
    Whereas, MTBE is difficult and expensive to remove once it is in 
the water supply; and
    Whereas, MTBE is highly soluble in water, shows a high degree of 
mobility in soils and persistence in the water and has a very low taste 
and odor threshold; and
    Whereas, although the health effects of MTBE are not well known, it 
is a possible human carcinogen; and
    Whereas, the City is responsible for developing and maintaining a 
safe, healthful, potable and reliable water supply for the more than 
30,786 residents and water customers of the City; and
    Whereas, the City's objectives include water quality protection and 
enhancement; and
    Whereas, the City relies upon ground water to supply the water 
needs of the majority of its customers; and
    Whereas, MTBE has been detected at nearly 300 leaking underground 
storage tank sites in Santa Clara County; and
    Whereas, MTBE has been detected at very low levels in at least one 
drinking water well at a location in the Santa Clara Valley not within 
the City; and
    Whereas, MTBE has been detected at very low levels in treated water 
purchased from the Santa Clara Valley Water District by the City for 
the distribution to some of its residents; and
    Whereas, the mechanisms of MTBE contamination include leaking 
underground storage tanks, other gasoline storage and distribution 
systems, gasoline-powered water craft, storm water runoff, and rainfall 
washout; and
    Whereas, to protect the public health and welfare the California 
Department of Health Services is in the process of promulgating a 
Maximum Contaminant Level for MTBE in drinking water; now
    Therefore, Be It Resolved by the City Council of the City of Morgan 
Hill that said City Council hereby urges a prohibition on the use of 
M]BE or any other ether oxygenate as an additive to motor fuels within 
the State of California.
    And Be It Further Resolved that the City Council of the City of 
Morgan Hill urges the Governor to employ his executive powers, and the 
Legislature to adopt laws, to achieve removal of MTBE and other either 
oxygenates as additives to motor fuels in the State of California in 
order to protect the State's valuable water resources, and urges the 
Governor and the Legislature to work with the appropriate authorities 
at the Federal level to achieve this prohibition and to identify 
alternative methods to achieve acceptable air quality objectives.
    Passed and Adopted by the City Council of Morgan Hill at a Regular 
Meeting held on the 5th day of August, 1998.
                                 ______
                                 
                                       City of Santa Clara,
                                      Santa Clara, CA, 30 June 1998

    Hon. Richard Mountjoy,
    California State Senate,
    State Capitol Room 4062,
    Sacramento, CA 95814.

    Subject: Resolution Urging a Prohibition on the Use of MTBE

    Dear Senator Mountjoy: On 23 June 1998 the City Council of the City 
of Santa Clara adopted Resolution 6456 urging the Legislature to enact 
laws to prohibit the use of methyl tertiary butyl ether (MTBE) and 
other ether oxygenates in motor fuels in California. A copy of the 
Resolution is attached.
    The City of Santa Clara relies on local groundwater aquifers to 
supply over 65 percent of the water needs of its customers. 
Contamination of those groundwater supplies by MTBE or other ether 
oxygenates would create a very serious water quality problem, extremely 
expensive to correct. The City's water customers, which include some of 
the largest electronics firms in the world, rely on high quality water 
for human consumption as well as industrial use.
    Your efforts to prohibit the use of MTBE are appreciated.
            Very truly yours,
                                        Judy Nadler, Mayor,
                          Jennifer Sparacino, City Manager.
                                 ______
                                 
                  Santa Clara, CA, Resolution No. 6456
a resolution of the city council of the city of santa clara requesting 
    the governor and the legislature to prohibit the use of methyl 
      tertiary-butyl ether or other ether oxygenates in motor fuel
    Be It Resolved by the City Council of the City of Santa Clara, 
California (``City''), as follows:
    Whereas, Methyl tertiary-butyl either (``MTBE'') represents a 
threat to Round water and surface water supplies in California; and,
    Whereas, MTBE is difficult and expensive to remove once it is in 
the water supply; and,
    Whereas, MTBE is highly soluble in water, shows a high degree of 
mobility in soils and persistence in the water and has a very low taste 
and odor threshold; and
    Whereas, although the health effects of MTBE are not well known, it 
is a possible human carcinogen; and,
    Whereas, the City is responsible for developing and maintaining a 
safe, healthful, potable and reliable water supply for the more than 
100,300 residents and water customers of the City; and,
    Whereas, the City's objectives include water quality protection and 
enhancement; and,
    Whereas, the City relies upon of its customers; and, ground water 
to supply the water needs of the majority; and
    Whereas, MTBE has been detected at nearly 300 leaking underground 
storage tank sites in Santa Clara County; and,
    Whereas, MTBE has been detected at very low levels in at least one 
drinking water well at a location in the Santa Clara Valley not within 
the City; and,
    Whereas, MTBE has been detected at very low levels in treated water 
purchased from the Santa Clara Valley Water District by the City for 
the distribution to some of its residents; and,
    Whereas, the mechanisms of MTBE contamination include leaking 
underground storage tanks, other gasoline storage and distribution 
systems, gasoline-powered water craft, storm water runoff, and rainfall 
washout; and,
    Whereas, to protect the public health and welfare the California 
Department of Health Services is in the process of promulgating a 
Maximum Contaminant Level for MTBE in drinking water:
    Now Therefore, Be It Resolved by the City Council of the City of 
Santa Clara, California, that said City Council hereby urges a 
prohibition on the use of MTBE or any other ether oxygenate as an 
additive to motor fuels within the State of California.
    Be It Further Resolved,, the City Council of the City of Santa 
Clara urges the Governor to employ his executive powers, and the 
Legislature to adopt laws, to achieve removal of MTBE and other ether 
oxygenates as additives to motor fuels in the State of California in 
order to protect the State's valuable water resources, and urges the 
Governor and the Legislature to work with the appropriate authorities 
at the Federal level to achieve this prohibition and to identify 
alternative methods to achieve acceptable air qualify objectives.
                                 ______
                                 
           Santa Clara County Resolution Adopted May 12, 1998
    Whereas, the Santa Clara County Board of Supervisors supports 
efforts to repeal the Federal requirement that gasoline contain 
oxygenates while maintaining air quality standards; and
    Whereas, the Santa Clara County Board of Supervisors supports 
effort at the state level to eliminate MTBE from fuel; and
    Whereas, the Santa Clara County Board of Supervisors supports 
continued reseal into the public heals impacts of MTBE In drinking 
water; and
    Whereas, the Santa Clara County Board of Supervisors supports 
efforts to maintain air quality standards so state and Federal 
transportation funds linked to air quality are not put in jeopardy; and
    Whereas, the Santa Clara County Board of Supervisors Supports 
Legislation; including H.R. 630 (Bilbray), S. 1576 (Feinstein), SJR 36 
(Johannassen), SB 19 (Mountjoy); and opposes AB 2439 (Bower);
    Now, Therefore Be It Resolved that the Santa Clara County Board of 
Supervisors is actively supporting measures remove or limit the level 
of MTBE in the water supply.
                                 ______
                                 
         Santa Clara Valley Water District Resolution No. 98-10
requesting governor pete wilson to prohibit the use of methyl tertiary-
                        butyl ether in gasoline
    Whereas, the Santa Clara Valley Water District (District) is 
responsible for managing water resources in Santa Clara County; and
    Whereas, the District provides wholesale water supply for the more 
than 1.6 million residents of Santa Clara County; and
    Whereas, Methyl Tertiary-Butyl Ether (MTBE) has been detected in 
the District's local reservoir, Vapored water, drinking water treatment 
plant influent and effluent, and groundwater; and
    Whereas, MTBE has been at nearly 300 leaking underground storage 
tank sites in Santa Clara County; and
    Whereas, the mechanisms of MTBE contamination include leaking 
underground storage tank systems, other gasoline storage and 
distribution systems, gasoline-powered watercraft, storm water runoff, 
and rainfall washout; and
    Whereas, MTBE is difficult and expensive to remove once it is in 
the water supply; and
    Whereas, MTBE is soluble, mobile, and persistent in the water 
cycle; and
    Whereas, MTBE is a possible human carcinogen and has a low taste 
and odor threshold; and
    Whereas, the District's objectives include water quality protection 
and enhancement.
    Now, Therefore, Be It Resolved, by the Board of Directors of the 
District that said Board hereby urges a prohibition on the use of MTBE, 
or any other ether oxygenate, At an additive to motor vehicle fuels.
    Be It Further Resolved,, that the Board of Directors urges the 
Governor to employ his executive powers to achieve removal of MTBE and 
other ether oxygenates as additives to motor vehicle fuels in the State 
of California in order to protect the She's valuable water resources, 
and urges the Governor to work with appropriate authorities at the 
Federal level to achieve this prohibition and to identify alternative 
methods to achieve acceptable air quality objectives.
    Passed and Adopted by the Board of Directors of the Santa Clara 
Valley Water District on February 17, 1998.
                                 ______
                                 
                       South Tahoe Public Utility District,
                              South Lake Tahoe, CA, March 19, 1998.

    Honorable Pete Wilson, Governor,
    State of California,
    Capitol Building, First Floor,
    Sacramento, CA 95814.

    Re: Methyl Tertiary Butyl Ether (MTBE) in Gasoline

    Dear Governor Wilson: The South Tahoe Public Utility District is 
very concerned about MTBE in its water supplies. MTBE has been detected 
in three of the District's water wells and threatens two others.
    The mechanisms of MTBE contamination include leaking underground 
storage tank systems, other gasoline storage and distribution systems, 
gasoline-powered water craft, storm water runoff, and rainfall washout. 
Once in the water supply, MTBE is difficult and expensive to remove. 
MTBE is soluble and mobile, and it is persistent in the subsurface 
environment. The health effects of MTBE are not completely understood, 
but MTBE is a possible carcinogen and has a low taste and odor 
threshold. The most effective way to prevent additional impacts to 
water supplies and public health from MTBE is to cease its use as an 
additive to motor vehicle fuel.
    The Board of Directors of the South Tahoe Public Utility District 
urges you to employ your executive powers to achieve removal of MTBE 
and other ether oxygenates as additives to motor vehicle fuels in the 
State of California in order to protect the State's valuable water 
resources. The South Tahoe Public Utility urges you to work with 
appropriate authorities at the Federal level to achieve this 
prohibition and to identify alternative methods to achieve acceptable 
air quality objectives.
    If you or your staff has questions, please call Mr. Rick Hydrick, 
Manager of Water Operations, at (530) 544-6474, extension 238.
            Sincerely,
             James R. Jones, President, Board of Directors.
                                 ______
                                 
              South Lake Tahoe, CA, Resolution No. 2669-98
   a resolution of the board of directors of the south tahoe public 
  utility district urging the governor of the state of california to 
 employ his executive powers to achieve the removal of mtbe and other 
     oxygenates as additives to gasoline in the state of california
    Whereas, Methyl Tertiary-Butyl Ether (MTBE) has been detected in 
water supplies within the service boundaries of the South Tahoe Public 
Utility District; and
    Whereas, MTBE has been detected in water supplies in three drinking 
water wells and threatens two others within the service boundaries of 
the South Tahoe Public Utility District; and
    Whereas, the mechanisms of MTBE contamination include leaking 
underground storage tank systems, other gasoline storage and 
distribution systems, gasoline-powered water craft, storm water runoff, 
and rainfall washout; and
    Whereas, MTBE is difficult and expensive to remove once it is in 
the water supply; and
    Whereas, MTBE is soluble, mobile, and persistent in the water 
cycle; and
    Whereas, MTBE is a possible human carcinogen and has a low taste 
and odor threshold; and
    Whereas, it is important to protect water quality and public 
health.
    Now, Therefore, Be It Resolved, that the Board of Directors of the 
South Tahoe Public Utility District hereby urges a prohibition on the 
use of MTBE, or any other ether oxygenate, as an additive to gasoline.
    Now, Therefore, Be It Further Resolved, that the Board of Directors 
of the South Tahoe Public Utility District urges the Governor to employ 
his executive powers to achieve removal of MTBE and other ether 
oxygenates as additives to gasoline in the State of California in order 
to protect the State's valuable water resources, and urges the Governor 
to work with appropriate authorities at the Federal level to achieve 
this prohibition and to identify alternative methods to achieve 
acceptable air quality objectives.
    Passed and Adopted at a duly held Regular Meeting of the Board of 
Directors of the South Tahoe Public Utility District on the 19th Day of 
March.
                                 ______
                                 
Alameda County Flood Control and Water Conservation District Resolution 
                              No. 97-1850
 alameda county flood control and water conservation district board of 
                               directors
    Whereas, Zone 7 of Alameda County Flood Control and Water 
Conservation District, has as its charge the protection of the 
groundwater basin over which it lies: and
    Whereas, the aforementioned protection extends to both the 
management of the groundwater supply as well as the quality of the 
water therein conned; and
    Whereas, since the use of MTBE, methyl-tert-butyl ether, as a fuel 
additive began, the rapid spread of MTBE throughout the State of 
California's groundwater and surface waters has been documented; and
    Whereas, the United States Environmental Protection Agency, the 
Centers for Disease Control and the California Department of Health 
Services have all recognized the probable carcinogenic, public health 
hazards, or aesthetic concerns of MTBE exposure; and
    Whereas, recent analyses have shown that the use of dunking water 
wells in certain California cities has been lost due to MTBE 
contamination; and
    Whereas, the hydrophilic properties of his have been documented as 
well as its ability to travel through the water cycle; and
    Whereas, the rapid movement of MTBE through an aquifer has been 
demonstrated once contamination has occurred; and
    Whereas, despite the use of Best Available Technologies, 
underground gasoline storage tanks including those within our area will 
leak, and gasoline will be spilled; and
    Whereas, MTBE's resistance to biodegration and the difficulty of 
clean-up by standard practices has been documented; leaving prevention 
a more effective defense than remediation; and
    Whereas, at this point in time, MTBE has not yet been found In the 
Zone 7 drinking water supply, and that the time to act is before 
contamination occurs; and
    Whereas, it is nor in the best interests of public health to 
sacrifice water quality for air quality;
    Now, Therefore Be It Resolved, that the Board of Directors of Zone 
7 of Alameda County Flood Control and Water Conservation District, 
exercise its duties as the manager of the groundwater basin by 
recommending that the addition of MTBE to motor vehicle fuels be 
discontinued and that a more environmentally responsible fuel additive 
be employed to reduce harmful exhaust emissions; and
    Be It Further Resolved,, that the General Manager of Zone 7 be 
directed to submit its resolution to the Governor's Office, USEPA, 
SWRCB, RWQCB, Air Resources Board, Bay Area Air Quality Management 
District and the Department of Health Services.
                                 ______
                                 
          Mesa Consolidated Water District Resolution No. 1207
 a resolution of the board of directors of the mesa consolidated water 
  district urging the governor and legislature to prohibit the use of 
                  methyl tertiary-butyl ether gasoline
    Whereas, Mesa Consolidated Water District's (Mesa) mission is to 
serve our customers through efficient management and distribution of a 
sufficient supply of quality water at a fair cost; and
    Whereas, Mesa relies upon groundwater to supply the water needs of 
the majority of its customers, and relies upon imported surface water 
as a supplement supply, and
    Whereas, Methyl Tertiary-Butyl Ether (MTBE) represents a threat to 
both groundwater and surface water supplies in California, and
    Whereas, MTBE is a known carcinogen that does not biodegrade in the 
environment and is difficult and expensive to remove once it is in the 
water supply, and
    Whereas, Mesa has urged the Orange County Water District Board of 
Directors, who act as our groundwater guardian, to lead a county-wide 
effort that requires petroleum companies remove MTBE from gasoline, and
    Whereas, Mesa customers and other ratepayers should not bear the 
burden of expensive treatment costs when the problem could be stopped 
at the source, and
    Whereas, Mess believes that coordinated state-wide as well as 
industry-wide efforts are essential to protect our groundwater basin 
and the customers who rely on a safe and reliable drinking water 
source.
    Now, Therefore Be It Resolved, by the Board of Directors of the the 
Consolidated Water District, that the Board of Directors hereby urges 
the Governor and Legislature to lead a statewide effort to require that 
petroleum companies remove MTBE from gasoline.
    Adopted, Signed and Approved this 27th day of August.
                                 ______
                                 
                    Gilroy, CA, Resolution No. 98-41
resolution of the council of the city of gilroy requiring governor pete 
  wilson to prohibit the use of methyl tertiary-butyl ether (mtbe) in 
                         california's gasoline
    Whereas, California's water supply is its most important natural 
resource and its protection is crucial to the fixture of California, 
and
    Whereas, California's cities and communities rely on this water 
supply for their drinking water, to maintain agriculture as viable in 
California and for the daily life activities of all California 
citizens, and
    Whereas, the approximately 60,000 people of the City Of Gilroy and 
the South Santa Clara County area rely exclusively on groundwater 
aquifers as the source of drinking water, and for agriculture uses, and
    Whereas, California's water supplies lost through contamination 
will require new sources of water to be developed at a huge cost borne 
mostly by the State Government, and
    Whereas, protecting this natural and valuable resource is critical 
to insuring the future of this great state and the success of 
California's economy, and
    Whereas, the willingness of California leaders to insure this 
natural and critical resource is protected will be one of the measures 
by which future generations will judge present leadership, and
    Whereas, this water supply is today, as are most water supplies in 
the State of California, threatened with irreparable harm from the 
gasoline additive Methyl Tertiary-Butyl Ether (MTBE), which has been 
detected in local aquifers and reservoirs, and
    Whereas, it is known that once MTBE enters an aquifer or drinking 
water well, it cannot easily be removed, if at all, and that water 
source must be abandoned, creating an irreparable harm to a local 
community, and
    Whereas, MTBE is a pervasive compound that by the time it can be 
detected, contamination has already occurred and the water supply has 
been rendered useless, thereby rendering prevention the only viable 
means to maintain water supplies free of MTBE, and
    Whereas, to date, over 300 underground storage tanks alone in Santa 
Clara County have been determined to have been leaking MTBE, thereby 
creating a serious exposure to contamination of the water supply in one 
of California's most critical economic regions, and
    Whereas, it is now urgent that the leadership of California take 
effective measures to stop further exposure and risk to this State's 
water supply from this gasoline additive.
    Now, Therefore, Be It Resolved, the City County of the City of 
Gilroy urgently requests State of California immediately prevents 
further use of MTBE, or any other oxygenate, as an additive to motor 
vehicle fuels, and
    Be It Further Resolved,, that the City Council of the City of 
Gilroy urgently requests the Governor to exercise his executive office 
and powers to insure the safety of California's water supply and 
resources by removing the additive MTBE and other ether oxygenates from 
motor vehicle fuels in the State of California and urges the Governor 
to work with the appropriate Federal officials to achieve this 
prohibition and to identify alternative methods to achieve acceptable 
air quality levels that do not expose the water supply of this great 
state and the future of its citizens to harm.
                                 ______
                                 
                  Los Altos, CA, Resolution No. 98-24
  resolution of the city council of the city of los altos entreating 
  governor pete wilson to protect the drinking water of los altos, by 
                prohibiting the use of mtbe in gasoline
    Resolved by the City Council of the City of Los Altos, Santa Clam 
County, California, that
    Whereas, MTBE poses a sloths threat to the drinking water of Los 
Altos by continuing to contaminate its sources of drinking water; and
    Whereas, due to the vigilance of the California Water Service 
Company, our drinking water is safes but as long as MTBE is present in 
gasoline our wells are at risk; and
    Whereas, MTBE's taste and odor makes contaminated drinking water 
unacceptable; and
    Whereas, citizens of this State have right to demand that the 
sources of drinking water be MTBE-free;
    Now, Therefore It Is Ordered, as follows: That the City Council of 
the City of Los Altos hereby entreats Governor Pete Wilson to rake 
immediate action to prohibit the use on MTBE, as an additive to 
gasoline.
                                 ______
                                 
                   Los Gatos, CA, Resolution 1998-139
resolution of town council of town of los gatos requesting the governor 
 and the legislature to prohibit use of methyl tertiary-butyl ether or 
             other ether oxygenates in motor in motor fuel
    Whereas, Methyl tertiary-butyl ether (MTBE) represents a threat to 
ground water and Eunice water supplies in California; and,
    Whereas, MTBE has been detected in local reservoirs, imported 
water, ding water treatment plant influent and effluent, and 
groundwater; and
    Whereas, MTBE is difficult and expensive to remove once it is in 
the water supply; and
    Whereas, MTBE is highly soluble in water, is a high degree of 
mobility in soils and persistence in the water and has a very low taste 
and odor threshold; and,
    Whereas, although the health effects of MTBE are not well known, it 
is a possible human carcinogen; and,
    Whereas, MTBE been detected at nearly 300 leaking underground 
storage tank sites Santa Clara County; and,
    Whereas, the mechanisms of MTBE contamination include leaking 
underground Storage tank systems, other gasoline storage and 
distribution systems, gasoline-powered watercraft, storm water runoff, 
and rainfall washout; and
    Now Therefore, Be It Resolved, that the Town Council of the Town of 
Los Gatos hereby urges a prohibition on the use of MTBE or any other 
ether oxygenate as an additive to motor fuels within the State of 
California.
    Be It Further Resolved,, that the Town Council of the Town of Los 
Gatos urges the Governor to employ his executive powers, and the 
Legislature to adopt laws, to achieve removal of MTBE and other ether 
oxygenates as additives to motor fuels in the State of California in 
order to protect the State's valuable water resources, and urges the 
Governor and the Legislature to work with the appropriate authorities 
at the Federal level to achieve this prohibition and to identify 
alternative methods to achieve acceptable air quality objectives.
    Passed and adopted at a regular meeting of the Town Council of the 
Town of Los Gatos, California, held on the 8th day of September 1998.
                                 ______
                                 
               Los Altos Hills, CA, Resolution No. 68-98
a resolution of the town of los altos hills, requesting governor wilson 
     to prohibit the use of methyl tertiary-butyl ether in gasoline
    Whereas, the City Council of the Town of Los Altos Hills supports 
efforts to repeal the Federal requirement that gasoline contain 
oxygenates while maintaining air quality standards; and
    Whereas, the City Council of the Town of Los Altos Hills supports 
efforts at the state level eliminate MTBE from fuel; and
    Whereas, the City Council of the Town of Los Altos Hills support 
continued research into the public health impact of MTBE in drinking 
water; and
    Whereas, the City Council of the Town of Los Altos Hills supports 
efforts to maintain air quality so state and Federal transportation 
funds linked to air quality are not put in jeopardy; and
    Whereas, the City Council of the Town of Los Altos Hills supports 
legislation including H.R. 630 (Bilbray), S. 1576 (Feinstein), SJR 36 
(Johannassen), SB1926 (Mountjoy) and opposes AB2439 (Bower).
    Now, Therefore, Be It Resolved, that the City Council of the Town 
of Los Altos Hills supports measures to remove methyl tertiary-butyl 
ether (MTBE) gasoline so to preserve the quality of our water supply.
    Passed and adopted this 19th day of August, 1998.
                                 ______
                                 
                             Los Gatos Village Association,
                                     San Jose, CA, August 30, 1998.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator: On behalf of the Los Gatos Village Association, I am 
writing in support of legislation introduced by Senator Feinstein, S. 
1576, and Congressman Bilbray, H.R. 630, which would eliminate the 
Federal requirement that California use oxygenated fuels.
    By way of reference, Los Gatos Village Association is a 163 
townhouse common interest development in the City of Los Gatos, 
California.
    We are very concerned about Methyl Tertiary-Butyl Ether (MTBE) in 
water supplies throughout the state. In Santa Clara County, MTBE has 
been detected in the Santa Clara Valley Water District's local 
reservoirs, imported water, drinking water treatment plant influent and 
effluent, and groundwater. One drinking water supply has been shut down 
in the county while the source of trace MTBE concentrations is 
identified and remedied. Most importantly, MTBE has also been detected 
in groundwater at nearly 300 leaking underground storage tank sites in 
Santa Clara County, at concentrations as high as 430,000 parts per 
billion. Once in the water supply, MTBE is difficult and expensive to 
remove. MTBE is soluble and mobile, and it is persistent in the 
subsurface environment. The health effects of MTBE are not fully 
understood, but it is known that MTBE is a possible carcinogen and has 
a low taste and odor threshold. The most effective way to prevent 
additional impact to water supplies and public health from MTBE is to 
cease its use as an additive to motor vehicle fuels. The Feinstein and 
Bilbray legislation would eliminate a Federal requirement that 
California use oxygenated fuels in its clean air gasoline while 
observing reduced vehicle emission levels. We are asking for your 
support of this critical legislation so that it can move forward in a 
timely way.
    Thank you for your consideration.
            Sincerely,
                       Victor Acevedo, Association Manager.
                                 ______
                                 

      Exchange of Correspondence Between Senator Feinstein and EPA

                                      United States Senate,
                          Washington, DC 20510, September 14, 1998.

    Honorable Carol M. Browner, Administrator,
    Environmental Protection Agency,
    Washington, DC 20460.

    Dear Ms. Browner: I am writing you again to request action to 
address the contamination of California's drinking water by the 
gasoline additive MTBE. Since I last wrote you, a June 12, 1998 
Lawrence Livermore National Laboratory has study found that MTBE is a 
``frequent and widespread contaminant'' in groundwater throughout the 
state. MTBE has been found in public wells, private wells and 
reservoirs.
    In your December 8, 1997 response to my November 3, 1997 letter in 
which urged you to immediately establish drinking water standards for 
MTBE, you indicated that MTBE is on the ``draft Contaminant Candidate 
List for further evaluation to determine whether or not to regulate 
MTBE in drinking water.'' What is the status of this list and 
evaluation? Will MTBE be evaluated as a drinking water contaminant?
    In the same December 8 letter, you indicated that under the Safe 
Drinking Water Act Amendments of 1996 EPA has the authority to 
promulgate interim regulations in cases of an ``urgent threat to public 
health'' and that ``currently available information . . . would not be 
a sufficient basis to find that an urgent threat to public health' is 
present in this situation.'' In light of the growing incidence of MTBE 
contamination, is there now sufficient basis? If not, what would 
constitute ``sufficient basis'' to justify regulations?
    On September 24, 1997, I wrote you urging that you to examine MTBE 
contamination and requested recommend actions Congress might take. In 
your November 14, 1997 response, you indicated that by December 1988, 
all underground storage tanks installed prior to December 1988 must be 
upgraded, closed or replaced to meet requirements to prevent releases 
and meet Federal regulations.
    As you know, leaking underground storage tanks are a major source 
of MTBE in drinking water supplies. More than 10,000 sites (according 
to a Lawrence Livermore June 11 study) have been already been 
contaminated. EPA officials have said in Congressional briefings that 
only half of the nation's 600,000 tanks will comply and unfortunately, 
the California Water Resources Board indicates that half of our state's 
underground storage tanks still need to be upgraded to prevent leaks. 
What action does EPA intend to take to bring these remaining tanks into 
compliance?
    In your November 14, 1997 letter responding to my letter, you 
discussed an October 7, 1997 meeting of experts that EPA convened to 
develop a research strategy for fuel oxygenates. What is the status of 
that strategy? What research is planned on MTBE? Does the strategy 
include an effort to establish more clearly the effects of MTBE on 
human health, both ingested and inhaled?
    Finally, since the California Air Resources Board regulations for 
clean air are stronger and more effective than the Federal regulations 
and the Air Resources Board has stated that California can meet these 
standards without MTBE, why would EPA not support an allowance for 
that?
    I appreciate your many efforts to protect the nation's natural 
resources and I look forward to working with you to make California's 
drinking water safe and potable.
            Sincerely,
                            Dianne Feinstein, U.S. Senator.
                                 ______
                                 
                           Environmental Protection Agency,
                            Washington, DC 20460, December 8, 1997.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Feinstein: Thank you for your letter dated November 3, 
1997, regarding the gasoline additive methyl tertiary butyl ether 
(MTBE) and groundwater contamination issues. You asked that the 
Environmental Protection Agency (EPA) consider the immediate 
establishment of drinking water standards and noted that you had not 
received a response to your September 24, 1997 letter on the issue of 
MTBE contamination. A response to your September 24, 1997 letter was 
sent on November 14, 1997. We have also enclosed a copy of that 
response for your convenience.
    In our November 14, 1997 letter, we discussed the many fronts on 
which EPA is addressing questions about MTBE, including activities 
completed or underway by the Agency and throughout the Federal 
Government to accurately characterize the scientific and policy issues. 
With respect to drinking water, this work will substantially improve 
our knowledge of the occurrence and potential for human exposure to 
MTBE in drinking water sources across the country and improve our data 
base on the health effects of MTBE in drinking water. We do take very 
seriously the appropriate direction to EPA, in the Safe Drinking Water 
Act amendments of 1996, to use the ``best available peer-reviewed 
science'' in regulating drinking water contaminants. We believe the 
data obtained from these activities should help to fill the scientific 
gaps in our understanding of MTBE and other potential fuel oxygenates 
to better inform our decisions.
    In the interim, the Agency is very near finalizing a Drinking Water 
Advisory on MTBE that will assist states and local communities in 
making important water supply and management decisions if MTBE is 
detected in a drinking water supply. The Advisory notes that most 
people will neither taste nor smell MTBE at levels below 20-40 parts 
per billion. Our best current information indicates that these 
concentrations are up to 100,000 times lower than levels found to show 
cancer or noncancer health effects in rodents. In other words, managing 
MTBE to levels that ensure consumer acceptance of the water (at or 
below this taste and odor threshold) will also provide a margin of 
safety from adverse health effects that is equal to or greater than the 
margin of safety generally provided by our National Primary Drinking 
Water Regulations.
    Therefore, where MTBE contamination is found at the levels you 
described, the lack of consumer acceptability will ensure that the 
water supplier will act to provide drinking water at palatable, and 
thus cleaner and safer levels. Our Advisory was developed to assist 
water suppliers and communities in making these management decisions, 
and to communicate that current scientific data does not indicate MTBE 
poses a significant health risk from water that consumers will accept.
    In addition, as part of implementing the Safe Drinking Water Act 
Amendments of 1996. the Office of Water has placed MTBE on the draft 
Contaminant Candidate list for further evaluation to determine whether 
or not to regulate MTBE in drinking water. Information gathered from 
the Agency's research and data collection efforts will be used to 
direct our determination of whether or not to regulate MTBE in drinking 
water within the timeframes specified in the 1996 Amendments. EPA has 
authority under the 1996 Amendments to promulgate interim regulations 
more quickly in cases of an ``urgent threat to public health.'' 
However, we believe that, taken together, the necessity of public water 
systems to manage their drinking water supplies to ensure consumer 
acceptability, and currently available information about the problem, 
would not be a sufficient basis to find that an ``urgent threat to 
public health'' is present in this situation.
    Thank you for contacting the Agency regarding this matter. If you 
have any further questions or need additional information, please do 
not hesitate to contact me, or have your staff contact Bill Diamond, 
Director of the Standards and Risk Management Division at 202-260-7575, 
or Jeannette Wiltse, Director of the Health and Ecological Criteria 
Division at 202-260-7317.
            Sincerely,
                Robert Perciasepe, Assistant Administrator,
                                                   Office of Water.
                           Environmental Protection Agency,
                           Washington, DC 20460, November 14, 1997.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Feinstein: Thank you for your letter dated September 
24, 1997, regarding the gasoline additive methyl tertiary butyl ether 
(MTBE) and possible groundwater contamination You asked the 
Environmental Protection Agency (EPA) to advise you on possible actions 
that would be appropriate in preserving our nation's water quality. I 
want to assure you that EPA takes seriously the issue of MTBE 
contamination of water.
    As you know, in the Clean Air Act of 1990 (Act), Congress mandated 
the use of reformulated gasoline (RFG) in those areas of the country 
with the worst ozone or smog problems. The RFG program, which began In 
January 1, 1995, is currently required in 10 areas and voluntarily 
implemented in another 22 (these 32 areas are a total of 18 states and 
the Distinct of Columbia). As directed by the Act, RFG must contain a 
minimum oxygen content of 2 percent by weight, a maximum benzene 
content of 1 percent, and no lead, manganese, or other heavy metals. In 
June 1996, California required statewide use of its Phase II RFG. The 
``cleaner burning gasoline,'' which has stricter standards than the 
Federal RFG requirements. RFG accounts for about 30 percent of the 
gasoline nationwide.
    RFG is required to reduce the emissions of both ozone-forming, 
volatile organic compounds (VOCs) and toxic pollutants by 15 percent 
with no nitrogen oxide (NOx) increase. The refiners' 1995/96 fuel data 
submitted to EPA indicate that the emissions benefits exceed the 
required reductions. EPA's 1996 Air Quality Trends Report showed that 
various toxic air pollutants, such as benzene; a known carcinogen, 
declined significantly between 1994 and 1995. Analysis indicates this 
progress may be attributable to the use of RFG. Starting in the year 
2000, the required emission reductions are substantially greater, at 
about 97 percent for VOCs, 32 percent for tonics, and 7 percent for 
NOx.
    Ethanol and MTBE are the primary oxygenates used in the RFG program 
to meet the oxygen content requirement MTBE is used in about 84 percent 
of RFG supplies because of economic reasons and its blending 
characteristics. MTBE is also often used in gasoline at lower 
concentrations as an octane enhancer in place of lead to reduce engine 
knocking.
    It is important to compare the risks of any gasoline additive the 
components of gasoline it replaces. Studies to date have not indicated 
that MTBE poses any greater risk to health than other gasoline 
components, and is likely less harmful then other gasoline components, 
such as benzene, which is a known carcinogen. Although additional 
research is needed to determine Federal drinking water guidance levels 
and to conduct a comparative risk analysis, the White House Office of 
Science and Technology Policy (OSIP) report which is further discussed 
below, stated that, ``the estimated upper-bound inhalation cancer unit 
risks for MTBE are similar to or slightly less than those for fully 
vaporized conventional gasoline, substantially less than that for 
benzene, a constituent of gasoline that is classified as a known human 
carcinogen; and more than 100 times less then that for 1,3-butadiene, a 
carcinogenic emission product of incomplete fuel combustion.''
    Pursuant to section 211 of the Act, EPA recently notified the fuels 
industry of the health effects testing it is required to perform for 
conventional and oxygenated gasoline (including MTBE). This exposure 
assessment and toxicology testing 11 commence shortly after the public 
comment period and will result in a greater understanding of the 
comparative risks associated with inhalation exposures to conventional 
and oxygenated gasoline fuels. The results of this research effort also 
may be helpful in characterizing risk in water by extrapolating the 
data to oral ingestion risk. Once this research is completed, the 
Agency-directed peer review will determine whether these fuels have 
been adequately tested or if more research will be required.
    In regards to water, EPA recognizes that there have been detectors 
of MTBE ground water in various wells throughout California. MTBE 
detections at high concentrations result primarily from leaking 
underground fuel storage tanks, and possibly from transmission 
facilities. More than one million underground fuel storage tanks exist 
in the United States, and leaks from these tanks have been the focus of 
major programs to prevent or remediate such releases to the 
environment.
    EPA's Underground Storage Tank Program is designed to minimize 
further contamination of water supplies by petroleum stored in 
underground tanks, including gasoline containing MTBE. The Program 
establishes requirements to upgrade tanks, prevent releases due to tank 
failures and overfills, detect and report leaks, and clean up releases. 
Since the adoption of Federal underground storage tank (UST) 
regulations in 1988, over one million tanks have been closed. About 
half of the remaining one million active tanks covered by EPA's UST 
program have been upgraded or replaced. During the past decade, over 
160,000 fuel releases have been completely remediated out of over 
330,000 confirmed releases. All USTs installed after December 1988 are 
currently required to meet EPA regulations for preventing leaks and 
spills. All USTs installed prior to December 1988 must be upgraded, 
closed, or replaced to meet these requirements by December 1998. In 
addition to regulations for preventing leaks, EPA regulations have 
required leak detection methods to be in place for all USTs since 1993. 
Both EPA and the states perforce these regulations.
    You asked our views on the appointment of a panel of scientists to 
investigate the extent of leakages and to offer specific 
recommendations to ensure the safety of our nations' groundwater 
supply. I want to make you aware that a scientific investigation of 
issues related to MTBE, including water contamination, was recently 
completed by a panel of experts. As mentioned previously, the White 
House Office of Science and Technology Policy convened an Interagency 
Oxygenated Fuels Assessment Steering Committee in May 1995 upon EPA's 
request. The Committee included representatives with various scientific 
expertise from a number of agencies including: U.S. Department of 
Agriculture, U.S. Department of Transportation, U.S. Department of 
Energy, U.S. Geological Survey, Centers for Disease Control and 
Prevention, National Oceanic and Atmospheric Agency, and EPA.
    In February 1996, OSTP released its draft assessment of the 
wintertime oxygenated fuels program which looked at a broad range of 
issues related to the use of oxygenates in gasoline, including water 
quality impacts. The National Academy of Sciences (NAS), an independent 
body of scientists, was then asked by EPA to evaluate and peer-review 
OSTP's draft Oxygenated Fuels Assessment Report. NAS's comments were 
used by the Committee in developing the final document that was 
released in June 1991, entitled ``Interagency Assessment of Oxygenated 
Fuels.'' As a result, this document is a thorough, comprehensive, and 
scientifically justifiable source of information on MTBE.
    The final OSTP report stated that, ``MTBE has been detected in 51 
public drinking water systems to date based on limited monitoring in 5 
states, however, when detected, the concentrations of MTBE were for the 
most part below the lower level of the current EPA health advisory. 
This indicates that the contamination of drinking water was not a major 
route of exposure for these few systems.'' The OSTP report also noted 
that, ``Because of the very limited data set for fuel oxygenates in 
drinking water, it is not possible to describe for the Nation MTBE's 
occurrence in drinking water nor to characterize human exposure from 
consumption of contained drinking water.'' The OSTP report concluded 
that more monitoring and research would be needed to better 
characterize major sources of MTBE to the environment and to enable an 
exposure assessment for MTBE and drinking water.
    As a result of this need for additional information, an Agency-wide 
Task force has been formed to develop a ``Research Strategy for 
Oxygenates in Water.'' The Strategy will identify key issues and 
describe a strategy to obtain information to support health risk 
assessment and risk management in the areas of environmental 
occurrence, source characterization, transport and transformation, 
exposure, toxicity and remediation of water contamination by fuel 
oxygenates, such as MTBE.
    On October 7, 1997. EPA convened a day-long meeting of over 50 
experts on a broad range of MTBE-related issues to review a draft of 
the Research Strategy. The experts included representatives from 
industry, academia, consultants, and other government agencies. The 
attendees included: Dr. Goldstein of EOHSI's Department of 
Environmental Community Medicine; Dr. Denton of California Air 
Resources Board; Dr. Happel of Lawrence Livermore National Lab; Dr. 
Borghoff of Chemical Industry Instance of Toxicology, representatives 
from Santa Monica and the Santa Clara Valley Water District, Dr. 
Zogorski of U.S. Geological Survey, among many others. The information 
produced in this workshop is being used to help finalize the research 
strategy for fuel oxygenates and will help coordinate efforts by 
various organizations, public and private, to address the issues 
related to oxygenates water.
    The Agency's Office of Water is expected to release this fall a 
provisional MTBE drinking water advisory that has been peer-reviewed by 
outside experts. This provisional advisory will be issued as part of 
EPA's longstanding Health Advisory Program to provide information and 
guidance to individuals or agencies concerned with potential risk from 
drinking water contaminant for which no national regulations currently 
exist. Based on existing taste and odor research, the MTBE advisory 
will recommend the concentration levels of MTBE in drawing water that 
are acceptable from an aesthetic perspective. The advisory will also 
have a discussion on the health effects of MTBE. While adverse health 
effects of MTBE exposure have been observed in laboratory animal 
toxicity tests (including both cancer and noncancer effects and 
identify a potential for hazard to humans from exposure to the 
chemical), the animal tests were not conducted by exposing the animals 
to drinking water, but rather by air exposure or by introducing MTBE in 
oil directly to the stomach. Because of the way the tests were done, 
their results do not support confident estimates of the degree of risk 
MTBE may pose to humans from low-level drinking water contamination, 
and EPA is therefore not establishing a health-based advisory level at 
this time. However, the advisory will compare the concentrations within 
the acceptable organoleptic range to the available health data from the 
animal studies and will present margins of exposure to cancer and non-
cancer effects. EPA, other Federal agencies, and private entities are 
conducting research to better characterize the potential health risks 
from MTBE exposure as well as several other aspects of MTBE's potential 
to contaminate the environment. When the human health aspects of the 
research become available, EPA's Office of Water will issue a final 
advisory to replace this provisional one.
    In addition, the Safe Drinking Water Act (SDWA), as amended in 
1996, requires EPA to publish a list of contaminants that may require 
regulation, based on their known or anticipated occurrence public 
drinking water systems. The SDWA, as amended, specifically directs EPA 
to publish the first list of contaminants (Contaminant Candidate List, 
or CCL) by February 1998, after consultation with the scientific 
community, including EPA's Science Advisory Board, and notice and 
opportunity for public comment. The amendments also require EPA by 2001 
to select at lease five contaminants from the final CCL and make 
determination of whether or not to develop drinking water standards for 
them. The Office of Water published a draft CCL for public comment in 
the Federal Register on October 6, 1997. MTBE is included on the draft 
CCL based on actual MTBE contamination of certain drinking water 
supplies, e.g., Santa Monica and the potential for contamination of 
other drinking water supplies in areas of the country where MTBE is 
used in high levels. The SDWA provides EPA with the authority to take 
action (i.e. interim regulation) prior to the 2001 deadline if there is 
an urgent threat to human health.
    EPA is aware that MTBE has been detected at elevated concentrations 
in groundwater near leaking fuel tanks throughout California, and that 
this has raised concerns regarding the occurrence of MTBE in drinking 
water supplies. The California Department of Health Services (DHS) 
advised public drinking water supply systems to monitor for MTBE in 
February 1996 and required monitoring by regulation in February 1997. 
Per this regulation, the systems in California must monitor their 
sources of drinking water which includes wells and surface water 
bodies. As of October 1997, approximately 10 percent of the 4,418 
drinking water systems have sampled for MTBE, which includes about 
twenty percent of drinking water sources (2,268 of approximately 11,000 
sources). Of the systems sampled, 16 (or 3.7 percent) have reported 
MTBE detections, and 28 (or 1.2 percent) of the sampled sources have 
detected MTBE. Most of the reported concentrations to date have been at 
low concentrations (e.g. below 20 micrograms per liter). Further 
sampling of California's remaining water supply systems will be 
necessary to understand the potential impacts of MTBE on drinking water 
resources. In the interim, State water agencies, with EPA assistance as 
necessary, should pursue swift remediation of leaking tanks serving as 
sources of groundwater contamination.
    The United States Geological Survey (USGS) is continuing to conduct 
its National Ambient Water Quality Assessment (NAWQA) program designed 
to assess the status and trends of the Nation's groundwater and surface 
water quality. USGS is monitoring for VOCs, including MTBE, in storm 
water, shallow groundwater, and deeper groundwater in selected areas of 
the country. As an extension to the NAWQA program, EPA's Office of 
Water has entered into a cooperative agreement with the USGS to conduct 
an assessment of the occurrence and distribution of MTBE in the 12 mid-
Atlantic and Northeastern States. Like California, these States have 
used MTBE extensively in the RFG and Oxygenated Fuels programs. This 
study will supplement the data gathered in California and will attempt 
to shed light on the important issues of (1) whether or not MTBE has 
entered drinking water distribution systems or impacted drinking water 
source supplies, and (2) determine if point (land) or nonpoint sources 
(air) are associated with detections of MTBE in groundwater resources. 
Activities are underway to begin collecting data in early 1998.
    As you can see, we have a great deal of activity underway to 
protect the Nation's water supplies and to better assess the issues 
surrounding the use of gasoline containing MTBE. As mentioned before, 
many of the activities include direct involvement of scientists and 
health experts from organizations outside of EPA. Over the coming 
months these efforts will add to what is already known about MTBE and 
other components of gasoline.
    Thank you for writing to the Agency with your concerns. I hope the 
above information is helpful, and if you have any farther questions. 
please do not hesitate to contact us.
            Sincerely yours,
                                         Richard D. Wilson,
              Acting Assistant Administrator for Air and Radiation.
                                 ______
                                 
                                      United States Senate,
                                      Washington, November 3, 1997.

    Honorable Carol M Browner, Administrator,
    Environmental Protection Agency,
    Washington, DC 20460.

    Dear Ms. Browner: I awn writing to urge that you consider the 
immediate establishment of drinking water standards for the gasoline 
oxygenated MTBE.
    It is my understanding that the Environmental Protection Agency has 
been considering, for some time, the establishment of regulations 
pertaining to MTBE in drinking water. I hope that you will act quickly 
and decisively to ensure that our nation's drinking, water is protected 
from contamination.
    So far, EPA has given communities with MTBE in their water supply 
very little guidance on the effects of large concentrations of MTBE in 
drinking water. While EPA has issued a non-binding draft lifetime 
health advisory of 70 parts per billion, (ppb), there is no enforceable 
Federal regulation on the concentration of MTBE in water.
    Moreover, the health advisory does not protect public health. I 
know of several detections in California where drinking water wells 
contained much more than the Federal draft lifetime health advisory. I 
call to your attention a number of cases recently cited by the 
California Department of Health Services:
    In Santa Monica, CA, officials have detected MTBE in City wells up 
to 130 ppb--over two times the current Federal advisory.
    In the Presidio of San Francisco, one well contained a 
concentration of 120 ppb.
    In Marysville, CA, city officials discovered MTBE at a 
concentration of 115 ppb.
    As long as this standard is merely an advisory, existing Federal 
law does not prohibit these highly contaminated wells from being used 
for human consumption.
    California has responded by passing, legislation which not only 
studies the extent and potential health impacts of MTBE in water 
supplies, but also requires the State Department of Health Services to 
establish a binding drinking water standard. I believe it is time for 
the Federal Government to provide some much needed leadership on the 
issue of MTBE.
    I would also like to bring to your attention the fact that I have 
not received a response to my September 24, 1997, letter to you 
regarding the contamination of our nation's groundwater by gasoline 
additives such as MTBE. (A copy is enclosed.)
    Thank you for your immediate attention. Please let me know of any 
decision you make in regard to this most pressing matter.
    With warmest personal regards.
            Sincerely yours,
                    Diane Feinstein, United States Senator.
                                 ______
                                 
                                      United States Senate,
                                Washington, DC, September 24, 1997.

    Honorable Carol M. Browner, Administrator,
    Environmental Protection Agency,
    Washington, DC 20460.

    Dear Ms. Browner: I am writing to request that the Environmental 
Protection Agency move as quickly as possible to examine the possible 
contamination of our nation's groundwater by gasoline additives such as 
Methyl Tertiary Butyl Ether (MTBE). I am hopeful you might advise me on 
possible legislative action in this area that would be appropriate for 
Congress.
    I appreciate your past responses to me on the subject of the health 
effects of airborne ingestion of MTBE, but I am writing to you again 
because the problem of chemical contamination to our water supply 
appears to be quickly escalating.
    MTBE groundwater contamination is a particularly serious problem in 
California, where leaks are occurring with more frequency. The growing 
concern prompted the California State Senate to pass bipartisan 
legislation to conduct a study on the safety and environmental effects 
of MTBE. The recent incidents in California that have caused this 
reaction dot the California landscape.
    In Santa Monica, the City has shut down half of its well water 
supply as a result from MTBE leaking out of shallow gas tanks beneath 
the surface.
    *In South Lake Tahoe, MTBE has been discovered in publicly owned 
wells approximately 100 feet from City Council Chambers and 
concentrations of the chemical are said to double each month.
    In Santa Clara County, 250 underground fuel tank sites have leaked 
MTBE next to water wells used by the residents of San Jose and other 
nearby communities.
    In Livermore, a gas station with a substantial leak is threatening 
a commonly used public drinking water well.
    Groundwater contamination by gasoline additives such as MTBE has 
also been seen nationwide--from Alaska to North Carolina. For example, 
a 1995 report by the U.S. Geological Survey reveals that MTBE was 
detected in 27 percent of urban wells and springs throughout the United 
States. A newer study shows that 51 public systems and many private 
wells in five states could be contaminated.
    As you know, Congress, concerned about the lack of compliance with 
clean air standards in certain regions in the country, amended the 
Clean Air Act in 1990 to mandate oil refineries add oxygenated formulas 
into gasoline. These oxygenates enable automobiles and trucks to reduce 
carbon monoxide emissions because they help burn gasoline more 
efficiently. MTBE, an octane booster which had been used in small 
quantities by the oil industry for many years, is a significant 
component of the reformulated gasoline.
    Many scientists disagree about the long-term effects of MTBE 
ingestion. Some scientists believe there is a link between exposure or 
consumption of MTBE and certain types of cancer, asthma and other 
ailments. Researchers have noted that rats exposed to the chemical have 
developed various tumors, lymphomas, leukemia, as well as kidney and 
liver damage. Other scientists maintain that, because it leaves such a 
strong odor and taste in water at relatively low concentration levels, 
MTBE poses very little risk to the general public.
    One option I would like you to consider is the appointment of a 
panel of scientists to investigate the extent of leakages and to offer 
specific recommendations to ensure the safety of our nation's 
groundwater supply. I would personally appreciate your advice on what 
legislative action I might pursue to amend the Clean Air Act to protect 
our air quality without sacrificing our groundwater.
    I look forward to hearing your reply and to seeing your plan of 
action.
    With warmest personal regards.
            Sincerely yours,
                   Dianne Feinstein, United States Senator.
                                 ______
                                 
                           Environmental Protection Agency,
                                Washington, DC 20460, July 7, 1997.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510-0504.

    Dear Senator Feinstein: Thank you for your letter of April 22, 
which was in follow up to your initial correspondence of April 11. I 
apologize for the delay in responding to your second communication, but 
I believe that the letter of May 15 from Mary Nichols, Assistant 
Administrator for Air and Radiation, addressed most of the specific 
questions you raised in your April 22 correspondence.
    I can now provide you some additional information concerning one of 
the questions you raised about human exposure to combustion products of 
MTBE in gasoline. You asked, ``Are EPA or other researchers measuring 
the quantity of combustion products of MTBE in the air to determine 
levels of human exposure? If EPA is not, why not?'' Research on that 
point is included in a set of proposed required studies that would be 
conducted under provisions of the Fuels and Fuel Additives Rule, as 
authorized by Section 211(b) of the Clean Air Act. The Office of Mobile 
Sources in the Office of Air and Radiation is about to issue formal 
notification on these requirements to a consortium of oxygenate 
manufacturers. Although EPA scientists in the Office of Research and 
Development have been providing guidance and direction for this 
research, the responsibility for funding and implementing these 
required studies would be borne by the industry. The reason for this is 
to ensure that the costs of testing the environmental and health 
impacts of fuels and fuel additives are paid by the companies that 
stand to profit from the sale of these products, not by the taxpayers.
    You also asked, ``Are EPA or other researchers determining the 
combustion products of MTBE when used as an automobile fuel?'' 
Extensive investigations of the combustion products of MTBE-gasoline 
and other formulations have been carried out not only by EPA but by a 
major program funded by the automobile and oil industries with EPA 
technical participation. In addition, the oxygenate manufacturers are 
required to provide EPA emissions data on MTBE-gasoline (as well as 
baseline gasoline and other oxygenate-gasoline mixtures) under 
provisions of the Fuels and Fuel Additives Rule noted above.
    Let me assure you that we have been very much aware of the concerns 
raised in your letter and the attached correspondence from Dr. Peter 
Joseph of Pennsylvania, and I believe we have been taking appropriate 
steps to address those concerns. For example, studies to (a) determine 
whether tertiary butyl formate (TBF) can be detected in the atmosphere 
and (b) evaluate its irritancy potential were called for as early as an 
August 1995 draft of the Agency's ``Oxyfuels Information Needs'' 
document. Efforts to address those needs were subsequently funded by 
ARCO Chemical, with results thus far indicating that TBF is not an 
especially irritating compound by comparison to other known inhalation 
irritants. Also, when Dr. Joseph met with EPA scientists on April 9 
(following his letter of April 5 to you), he was informed that, 
contrary to his expectations, TBF has not been detected in combustion 
emissions from MTBE-gasoline in tests conducted by EPA researchers 
explicitly looking for TBF. This is not to say that we have to come to 
any conclusion regarding the plausibility of any of Dr. Joseph's 
hypotheses. He has raised several provocative questions, which we are 
attempting to take into consideration as part of a much broader effort 
to understand fully the environmental and public health impacts of both 
conventional and oxygenated fuels.
    I appreciate your active interest in this issue. Please do not 
hesitate to contact me if you have any further questions or concerns.
            Sincerely yours,
       Henry L. Longest II, Acting Assistant Administrator.
                                 ______
                                 
             United States Environmental Protection Agency,
                                Washington, DC 20460, May 15, 1997.

    Honorable Dianne Feinstein,
    United States Senate,
    Washington, DC 20510.

    Dear Senator Feinstein: Thank you for your letter of April 11, 
1997, to which you attached correspondence from Dr. Peter Joseph 
raising concerns about exposures to compounds in gasoline, including 
the oxygenate methyl tertiary butyl ether (MTBE).
    As you know, the Clean Air Act (CAA) of 1990, Congress mandated the 
reformulated gas (RFG) program for those areas of the country with the 
worst ozone or smog problems. The program was developed through a 
cooperative process with industry, environmentalists, sand local 
governments to create a cost-effective program that requires ``cleaner 
gasoline'' to reduce automotive emission of ozone-forming pollutants 
and toxic materials. Ground-level ozone damages sensitive lung tissue 
and can result in permanent damage to lung tissue over the long term. 
Toxic emissions from conventional gasoline include materials like 
benzene which is known to cause cancer in humans. Toxic emissions from 
motor vehicles are estimated to account for roughly 50 percent of all 
cancers associated with exposure to air toxins.
    RFG is blended with the same ingredients used to make conventional 
gasoline. The difference is that RFG has lower levels of certain 
compounds that contribute to air pollution and higher level of 
oxygenates to reduce harmful carbon monoxide emissions that result from 
incomplete combustion. As directed in the CAA, RFG must contain a 
minimum oxygen content of 2 percent, a maximum benzene content of 1 
percent, and no lead, manganese, or other heavy mete Is. Ethanol, MTBE, 
and ethyl tertiary butyl ether (ETBE) are the main oxygenates currently 
capable of competing in the RFG market.
    Last year, the National Academy of Sciences (NAS) reviewed an 
assessment of oxygenated fuels issues by the Office of Science and 
Technology Policy (OSTP). The NAS report stated that ``it appears that 
MTBE-containing fuels do not pose health risks substantially different 
from those associated with nonoxygenated fuels.'' Therefore, the weight 
of scientific evidence at present would seem to indicate there are no 
identifiable adverse health effects associated with oxygenated gasoline 
that would not also be associated with conventional gasoline. 
Consistent with NAS recommendations, the Environmental Protection 
Agency (EPA) is continuing to identify additional areas of research to 
provide a basis for comparing gasoline/MTBE mixtures to gasoline 
without MTBE. EPA will propose the health testing requirements for the 
largest portion of this research in the coming months, while studies on 
acute effects are already beginning.
    Asthma mortality rates have been steadily climbing during the last 
half of this century. A recent study by the National Institutes of 
Health reported a 34 percent increase in asthma rates from 1983 to 
1993. The winter oxygenated fuels program, however, was not implemented 
on a widespread basis until 1992, and it was not until 1995, when the 
RFG program started, that higher volumes of MTBE production were seen.
    Dr. Joseph's letter asserts that MTBE use in gasoline causes 
increased asthma rates. We have no evidence to support that 
proposition. To the contrary, a recent study conducted by Maine's 
Department of Human Services, which compared asthma hospitalization 
rates in counties with and without RFG, concluded that ``the 
introduction of RFG (containing MTBE) into seven southern Maine 
counties has not resulted in an increase in hospitalization for asthma 
among residents of those counties.''
    Further, a study of the Pittsburgh metropolitan area hospital 
admissions for asthma between 1986 to 1992, found an 8 percent increase 
in asthma hospital admissions. This area of the country has never been 
a part of the RFG or oxyfuel program, and therefore the contribution of 
MTBE to the rising asthma rates, would be exceedingly small.
    Dr. Joseph recently visited EPA and presented his findings 
regarding MTBE, asthma rates, and t-butyl formate (TBF), which has been 
the focus of a fair amount of his recent writings. He was made aware 
that a broad study of vehicle emissions resulting from the use of 
oxygenated fuels was currently underway in RTP, North Carolina, and 
that MTBE oxygenated fuels were studied and showed no evidence of TBF 
generation in the exhaust stream despite instrumental sensitivities 
down to the parts per trillion level. This, however, does not rule out 
the possibility that TBF may be formed from photooxidation of MTBE in 
the air.
    ARCO Chemical has responded with a recently completed study to 
determine if TBF has the potential to cause pulmonary irritancy. The 
research showed that TBF does cause pulmonary irritancy in mice at over 
500 ppm, which was directly compared to other formates of known 
irritancy, that produced similar animal breathing difficulties below 
300 ppm. With ambient TBF levels expected in the low parts per billion, 
if it can be detected at all, the chance that TBF would cause pulmonary 
irritation among the general population is believed to be negligible. 
ARCO is also making preparations to determine what levels of TBF might 
be detected in ambient air in the Philadelphia region. Early results 
should be available in the fall, 1997.
    I have enclosed copies of the reports and studies cited above for 
your review. I hope I have adequately addressed your concerns about 
MTBE, TBF, and reformulated saline. Please contact us if you have any 
additional questions or meets.
            Sincerely yours,
      Mary D. Nichols, Assistant Administrator for Air and 
                                                 Radiation.
                                 ______
                                 
                                      United States Senate,
                                    Washington, DC, April 22, 1997.

    Honorable Carol Browner, Administrator,
    Environmental Protection Agency,
    Washington, DC 20460.

    Dear Administrator Browner: I write to follow up on my April 11 
letter in which I requested information on EPA's work to determine the 
adverse human health effects of methyl tertiary butyl ether (MTBE), a 
chemical used in reformulated gasoline to increase the oxygen content.
    In addition to the requests in that letter, I would like to pose 
several additional specific questions:
    Are EPA or other researchers determining the combustion products of 
MTBE when used as an automobile fuel? If EPA is not, why not?
    Are EPA or other researchers measuring the quantity of combustion 
products of MTBE, in the air to determine levels of human exposure? If 
EPA is not, why not?
    Is EPA conducting systematic studies of the increase in the 
incidence of asthma in specific cities, comparing cities with high 
levels of MTBE to cities without (for example, San Francisco compared 
to Portland, Oregon, or Los Angeles compared to Phoenix)? If EPA is 
not, why not?
    Is EPA routinely monitoring the adverse health effects resulting 
from MTBE in cities, specifically tertiary butyl formate (TBF) from 
MTBE, as suggested by the National Academy of Sciences in 1996? If not, 
why not?
    I am enclosing a letter raising these issues I received from Dr. 
Peter Joseph, Professor of Radiologic Physics in Radiology at the 
University of Pennsylvania Medical Center. I hope you will ask your 
staff to be in touch with him at 215-662-6679.
    Thank you for your attention to these concerns. I look forward to 
hearing from you.
            Sincerely,
                   Dianne Feinstein, United States Senator.
                                 ______
                                 
                                      United States Senate,
                                     Washington, DC, April 11, 1997

    Honorable Carol Browner, Administrator,
    Environmental Protection Agency,
    Washington, DC 20460.

    Dear Administrator Browner: As you know, reformulated gasoline is 
sold in many American cities as one way to meet Federal air quality 
standards. Some experts maintain that methyl tertiary butyl ether 
(MTBE), a chemical used in RFG to increase the oxygen content, causes 
or contributes to adverse health effects. Some experts believe it is a 
major contributing factor to the rising incidence of asthma in this 
country.
    I would appreciate information on and summaries of studies 
analyzing the adverse health effects of MTBE and in particular, any 
studies that might link its use to asthma. I would also appreciate 
knowing of any current studies underway and the agency's view of the 
health effects of MTBE.
    I commend you for your efforts to improve the nation's air quality 
and I look forward to hearing from you.
            Sincerely,
                   Dianne Feinstein, United States Senator.
                                 ______
                                 
           University of Pennsylvania School of Medicine,  
                Hospital of the University of Pennsylvania,
                                   Philadelphia, PA, June 15, 1997.

    Senator Dianne Feinstein,
    Washington, DC, 20510-0504.

    Dear Senator Feinstein: I recently attended the annual meeting of 
the Air and Waste Management Association in Toronto, Canada. The AWMA 
is the largest and best known association of professional environmental 
engineers and scientists. I was an invited speaker and presented my 
paper entitled ``Changes in Disease Rates in Philadelphia following the 
Introduction of Oxygenated Gasoline''. In that paper I document the 
huge increase in asthma and some other diseases that has taken place 
here since oxygenated gasoline with MTBE was mandated in 1992. I 
enclose a copy for your interest. Please note also the addendum in 
which I argue that the symptoms may be due to formic acid, a likely 
combustion byproduct of MTBE in fuel.
    I am happy to say that my paper was mostly well received, not only 
by those that heard me speak, but apparently by many others who heard 
about my research by word of mouth later. I heard some very favorable 
comments from scientists and engineers from northern California.
    Another paper that might interest you described work done by 
Professor Eatough of Brigham Young University in Utah. Professor 
Eatough found that when MTBE was mandatory in gasoline in the winter 
months, the amount of sulfuric acid in the air doubled! This result was 
totally unexpected and there was considerable discussion as to the 
possible cause. Sulfuric acid is certainly very irritating to the 
tissues of the respiratory system. I enclose a copy of the abstract of 
his paper, since the paper itself is probably a bit too technical to be 
understood by those without an advanced degree in chemistry.
    My major concern now is the possibility that the EPA may enact the 
new air quality standards for ozone. You may know that these changes 
have been much discussed, and it is predicted that if they are made 
then large parts of the country will be redefined as out of compliance. 
I am extremely worried that such a step will force a major expansion of 
the use of MTBE Reformulated Gasoline (RFG). If I am right that MTBE is 
making asthma, the huge increase in MTBE usage will create far more 
problems for asthmatics than any possible benefit from a 10-15 percent 
reduction in ozone. Furthermore, such an expansion will make much more 
difficult any possible epidemiologic study comparing asthma in the RFG 
and non-RFG areas. Thus, for two reasons, I believe such a move will be 
an enormous step in the wrong direction in terms of improving air 
quality and helping people with respiratory disease.
    I have heard that two people who will play an important role in 
this decision are Senator John Chafee and Vice President Gore. I would 
like to suggest that you set up a meeting with these two men, a meeting 
at which I would have the chance to present my data, arguments, and 
conclusions. of course, I would welcome the presence of anyone else 
that you think may be interested, including the legislative staff of 
the people involved. I would suggest that a minimum of 1 hour be 
allocated to discuss this extremely complex and important issue.
    I am hoping for a positive response to this suggestion.
            Sincerely,
                                    Peter M. Joseph, Ph.D.,
                      Professor of Radiologic Physics in Radiology.

    P.S. I also enclose a copy of a letter from Mrs. Cathy Simpson of 
Danville, CA. Mrs. Simpson is asthmatic and is convinced that her 
problems are aggravated by MTBE in gasoline. She testified at the 
Senate Transportation hearings on April 15.
                                 ______
                                 
 Enhanced Formation of Sulfate and Nitrate Associated with the Use of 
                            Oxygenated Fuels
   for presentation at the air & waste management association's 90th 
 annual meeting & exhibition, june 8-13, 1997, toronto, ontario, canada
   Yinghua Du, Yuan Ren, Nolan F. Mangelson and Delbert J. Eatough, 
  Department of Chemistry and Biochemistry, Brigham Young University, 
                              Provo, Utah
    John A. Cooper, TRC Environmental Corporation, Beaverton, Oregon
Abstract
    Oxygenated fuels are used in some western mountain valley 
communities to help in the control of CO during winter inversions. 
However, it is possible that oxygenated fuel use will increase 
PM2.5 concentrations. The oxygen in these fuels may lead to 
increased concentrations of oxidants. In turn, the concentrations of 
atmospheric oxidants involved in SO2 and NO2 chemistry may increase. 
This may lead to increased conversion of SO2 and NOx to particulate 
sulfate and nitrate. To explore the possible presence of this enhanced 
atmospheric chemistry, samples of gas and particulate sulfur and 
nitrogen oxides were collected in 5/day sample sets during four 3-day 
inversion episodes at two locations in the urban areas of Utah Valley. 
Two of the episodes occurred during December 1995 when oxygenated fuels 
were used in the valley. The last two episodes occurred in February 
1996 after the end of oxygenated fuel use on January 15. Fogs were 
absent during all four episodes. The results indicate that the 
conversion of SO2 to sulfate and NO2 to nitrate are both increased 
about twofold during the use of oxygenated fuels as compared to the 
non-oxygenated fuel periods The results, possible chemistry which may 
be related to the observed differences and implications for attainment 
of both the present and proposed new PM standard will be presented.
                               __________
  Statement of Hon. Thomas A. Daschle, U.S. Senator from the State of 
                              South Dakota
    Thank you, Mr. Chairman. I commend you and Senator Baucus for 
holding this hearing to review the merits of oxygenates in the Federal 
Reformulated Gasoline (RFG) program, with particular emphasis on the 
role of the fuel additive MTBE.
    I also want to acknowledge Senators Boxer and Feinstein, who have 
been at the forefront of the campaign to eliminate the presence of 
gasoline and gasoline components in water supplies. I am pleased to be 
able to join them in urging prompt action on this issue.
    There should be no question about the importance of cleaning up 
contaminated water supplies and solving the California problem for the 
future. My purpose in testifying today is to help place the RFG-with-
oxygenates program in perspective and offer some thoughts on how the 
situation identified by Senators Boxer, Feinstein and others might most 
effectively be addressed.
    As the committee considers options for dealing with MTBE 
groundwater contamination, it is important to keep in mind Congress's 
objectives in authorizing the RFG-with-oxygenates program in 1990. It 
is also useful to note the remarkable environmental achievements of the 
program since its implementation in 1995. And, it is essential to 
understand the fundamental distinction between RFG's oxygenate 
requirement and the fundamental problem we seek to redress.
    Inadequate gasoline storage facilities that have allowed gasoline 
and all its components, of which MTBE has been the most well 
recognized, to contaminate water supplies is the cause of this problem, 
not the RFG program. Simply removing MTBE from the marketplace will not 
stop gasoline groundwater contamination. It will, however, have major 
negative effects on other important national priorities.
    Let me begin by emphasizing my strong conviction that the RFG-with-
oxygenates program has been highly successful, not only achieving but 
in many cases surpassing the multiple goals set by Congress when first 
enacted as part of the 1990 Clean Air Amendments. Moreover, it stands 
as a model of how the public and private sectors can work together to 
advance the public welfare in a safe and cost effective manner.
    As the Chairman and Ranking Minority Member both know, the Senate 
extensively debated the merits of the RFG-with-oxygenates provision 
prior to its passage by a vote of 69 to 30 on March 29, 1990. A review 
of the Congressional Record debate shows that Congress had several 
major objectives in enacting the RFG-with-oxygenates program:
    1. To improve air quality by reducing mobile source emissions (VOC 
ozone precursors; toxics; and NOx);
    2. To improve energy security by reducing oil imports;
    3. To stimulate the economy, especially in rural America; and
    4. To provide regulatory relief to the automotive industry by 
cleaning up ``dirty'' fuel, which was a primary cause of urban 
pollution.
    Since 1995, nearly one-third of all gasoline sold in the U.S. has 
been RFG-with-oxygenates, and there is no longer any need to speculate 
about its effect. The facts are in.
    In an April 22,1998 letter to Rep. Bilirakis voicing opposition to 
legislation to waive the RFG oxygenate requirement, the American Lung 
Association and Natural Resources Defense Council referred to RFG as 
``one of the most successful programs enacted in the Clean Air Act 
Amendments.'' EPA Administrator Browner has called the RFG program the 
``most significant pollution reduction step since the phaseout of 
lead.'' In fact, EPA has concluded that RFG-with--oxygenates has met or 
surpassed the reduction goals set for VOC ozone precursors, toxics, 
carbon monoxide, and even NOx. In an August 25,1997 letter to the 
Director of Alabama's Department of Environmental Management, EPA's 
Director of Mobile Sources, Margo Oge, cited Phase I RFG as having 
achieved: ``. . . 43 percent reductions in benzene and 25 percent 
reductions in mobile source related VOCs'' as well as a net reduction 
of 24.6 percent in tonics,'' all of which exceed the requirements of 
the Act.
    RFG has been acknowledged as an effective pollution reduction tool 
even by certain parts of the petroleum industry. I have attached an 
editorial from the Oil & Gas Journal written by an employee of Valero 
Refining, Cal Hodge, which makes an important distinction between the 
``oxygen atom'' and the emissions impacts of an ``oxygenate''. Hodge 
states that, ``Contrary to the assertion that the ``oxygen'' mandate 
only reduces VOC and CO emissions, the complex model shows oxygenates 
also provide significant reductions of toxic and NOx emissions.'' It is 
worth noting that Hodge cites ETBE as one of the top performers, with 
NOx emissions reductions of 5 percent, and toxic emissions reductions 
of more than 32 percent.
    Remarkably, given all these environmental benefits, RFG's costs 
have been very low, averaging only 1 to 3 cents per gallon more than 
conventional gasoline. In some areas of the country, RFG has actually 
cost less than conventional gasoline. These costs are very close to the 
EPA estimates provided during the Senate debate and are well below the 
20 to 25 cent per gallon figure provided by the oil industry at the 
time.
    The RFG program has also appreciably improved our nation's energy 
security position. In June 1996, the General Accounting Office (GAO), 
at my request, analyzed the petroleum displacement effect of the RFG-
with-oxygenates program. GAO found that, even after adjusting for the 
lower energy density of oxygenates, 305,000 barrels per day of imported 
petroleum will be displaced by the oxygenate portion of RFG in the year 
2000. This amounts to 37 percent of the 10 percent imported petroleum 
displacement goal established by the Congress in the 1992 Energy Policy 
Act. GAO further calculated that, if all gasoline were RFG with 
oxygenates, nearly 800,000 barrels per day of imported petroleum would 
be displaced.
    Energy security experts like Jim Woolsey, former director of 
Central Intelligence, and General Lee Butler, former commander, 
Strategic Air Command and principal air planner for Desert Storm, have 
spoken out frequently on the value of this near- to mid-term import 
displacement. Butler and Woolsey have expressed their support for the 
RFG-with-oxygenates program not only as a commercial foundation to 
stimulate increased production of replacement fuels in the U.S., but 
because it is one of the few, if not only, meaningful near-term oil 
import reduction programs available. General Butler, speaking in his 
capacity as Chairman of the Clean Fuels Foundation, points out that: 
``It is the oxygenates in RFG that displace oil imports--the more RFG 
with oxygenates, the less oil imports, and the less reliance on an 
increasingly dangerous region of the world.''
    The RFG program has provided a significant shot-in-the-arm to our 
rural economy. As we all had hoped in 1990, the RFG-with-oxygenates 
program has stimulated new investments in ethanol and ether facilities 
in the U.S. Jobs have been created, and abundant supplies of grain and 
butane, which has been forced out of gasoline due to its evaporative 
contributions to ground level ozone, have been value-added to ethanol 
and ethers. The oxygenated fuels industry has responded in good faith 
to the 1990 law by investing billions of dollars in new plants all 
across the country.
    I have attached a September 9, 1998 letter from Indiana Gov. Frank 
O'Bannon, Chairman of the Governors' Ethanol Coalition (GEC), to 
Missouri Governor Mel Carnahan, commending him on his recent decision 
to opt-in the St. Louis area to the RFG program. Governor O'Bannon, in 
citing the GEC's ``strong support'' of the RFG program, noted that it 
also ``helps us build a strong market for ethanol.'' In addition to 
dominant market shares in RFG areas like Chicago and Milwaukee, ethanol 
has benefited from the State of Minnesota's implementation of a very 
successful year-round 2.7 wt. percent oxygen standard, modeled on the 
Federal law (the Senate amendment initially established a 2.7 wt. 
percent standard, before it was modified in conference). Other 
Midwestern States are considering following Minnesota's lead.
    Despite these successes, many of us are disappointed that the RFG 
program has not resulted in more use of ethanol, and especially ETBE. I 
do believe, however, that expanded RFG use will result in more ethanol 
and ETBE use in the future. The St. Louis ``opt-in'' decision is a good 
example of how States can design their programs to encourage diversity 
of oxygenate use, and benefit motorists and refiners with price and 
product competition. Recently, Senator Lugar and I offered an amendment 
to the Agriculture Appropriations bill that directs the USDA to report 
to the Congress on ways to expand the use of ethanol and ETBE as we 
enter the post-2000 cleaner gasoline era. A choice among oxygenates--
especially domestic oxygenates--is clearly best for motorists, workers, 
the economy and farmers.
    I am told that a number of new areas are seriously considering RFG, 
including eastern Texas, Kansas City, Birmingham and others. The EPA 
has recently issued rulings opening the door for former non-attainment 
areas, and even those areas that have never been out of attainment, to 
``opt-in'' to Federal RFG as a means of preventing non-compliance in 
the future. That is why the committee's deliberations today are so 
important; the precedents that could arise from precipitous action 
could severely damage the growth prospects of all oxygenates, not just 
MTBE.
    Finally, RFG has helped the automotive industry meet tightening 
environmental standards. The 1990 Senate debate had an additional 
recurrent theme: while automobiles had gotten substantially cleaner in 
the years since lead phaseout, gasoline had gotten substantially 
dirtier. Thus, the RFG provision stemmed in part from the recognition 
that it was time for petroleum refiners to pick up their fair share of 
the burden for cleaner air.
    I believe that the refining industry has responded well to the 
imposition of RFG. As we have seen, costs have been far less than what 
the oil industry predicted, and supplies have been readily available.
    Nonetheless, the job is far from finished. Sulfur levels should be 
cut. In addition, aromatics levels should be reduced further, which 
would reduce combustion chamber deposits and driveability problems, as 
well as provide additional toxics emission reductions.
    In an August 24, 1998 letter to the Texas Natural Resource 
Conservation Commission, the American Automobile Manufacturers 
Association (AAMA) wrote: ``. . . AAMA encourages you to adopt the 
Federal Phase 2 Reformulated Gasoline Program (RFG) . . . Federal Phase 
2 RFG will provide approximately the same sulfur levels as proposed in 
the low sulfur option, and will also provide additional benefits. Among 
these additional benefits, properly blended reformulated gasoline will:
    --Lower emissions from all vehicles in the fleet, immediately upon 
implementation;
    --Reduce air toxic emissions;
    --Reduce the potential for cold start driveability problems that 
can increase emissions;
    --Provide more consistent fuel quality . . . year-round;
    --Provide a federally administered audit and compliance program.''
    Our goals as articulated in the 1990 Clean Air Act debate have been 
realized. The RFG-with oxygenates program has resulted in cleaner air, 
reduced oil imports and improved energy security, lower regulatory 
burdens on the automobile industry, and domestic economic growth, all 
at a low cost to the consumer. I am not aware of any other program 
available to us that can make such a multiplicity of claims, or that 
can be expanded so readily to provide even greater public benefits.
    In my opinion, it would do serious harm if we were to tamper with 
the one part of the RFG program that ties all of these benefits 
together--i.e. the oxygenate standard. That being said, it is 
undeniable that, despite all of its benefits and advantages, the RFG 
program has exposed a glaring weakness In the nation's petroleum 
distribution system. The MTBE detected in drinking water supplies in 
California has drawn attention to a serious ancillary problem that 
demands immediate solution--namely, leaking underground storage tanks 
and distribution systems.
    The problem faced by California is leaking gasoline, of which MTBE 
is only one of hundreds of components, not the RFG program. Clearly, 
this situation is unacceptable. We need to do whatever we can to 
prevent gasoline and all its constituent parts from contaminating our 
surface water and our groundwater. Gasoline simply does not belong in 
our water supplies.
    The fact is, however, that simply removing MTBE, or any other 
oxygenate, from RFG will not solve the problem of leaking tanks and 
pipelines. There are many components of gasoline, and diesel and jet 
fuel for that matter, that are dangerous.
    It is the leaks we must eliminate, not the oxygenates.
    I have asked my staff to work with this committee, and with 
Senators Boxer and Feinstein, to identify near-term actions that can be 
taken yet this year, prior to adjournment, to address the problem of 
groundwater contamination in California. The Federal Government must 
assist California in its water remediation efforts and help ensure that 
leaking underground storage tanks are fixed as soon as possible. It is 
my hope that this problem can be solved immediately without imperiling 
the many important, and expanding, benefits of the RFG-with-oxygenates 
program.
    Thank you.
                               __________
Statement of the Hon. Brian Bilbray, U.S. Representative from the State 
                             of California
    Mr. Chairman, I want to first thank you for making the time on your 
committee's calendar to schedule this hearing, on an issue which is of 
such great significance to my home State of California. I am very 
pleased to be here today to continue my close work with my fellow 
Californian, Senator Feinstein, on the legislation we have respectively 
introduced in the House (H.R. 630) and here in the Senate (S. 1576). I 
also appreciate the interest of our California colleague, Senator 
Boxer, a member of this committee, and look forward to the discussions 
which will ensue and the testimony of the witnesses you have assembled 
on the other panels.
    The fundamental facts about S. 1576/H.R. 630 are simple--it would 
allow the State's more stringent RFG program to operate in lieu of the 
overlapping, less stringent Federal RFG program, so long as the State 
program continues to demonstrate that it is achieving equal or better 
reductions in overall emissions of air tonics and VOCs.
    EPA has recognized that the California program Is more stringent, 
and has stated as much in several Federal Register notices. Further, S. 
1576/H.R. 630 is content-neutral and performance-based. I strongly 
believe that we need to focus more on outcome and less on process in 
setting environmental policy and protecting the public health. As a 
former member of the California Air Resources Board, I am very proud of 
California's role on the cutting edge of such strategies. We will have 
further elaboration on this from Mr. Dunlap in the second panel.
    This legislation has been carefully constructed to build 
exclusively on California's unique, preexisting ability under the Clean 
Air Act to operate its own reformulated gasoline program. This is so 
for good reason; California has historically had unique air pollution 
challenges which require innovative and creative solutions. Congress, 
recognizing this, singled it out for special status in Section 
211(c)(4)(b) of the Clean Air Act, which states ``Any State for which 
application of section 209(a) has at any time been waived under section 
209(b) may at any time prescribe and enforce, for the purpose of motor 
vehicle mission control, a control or prohibition respecting any fuel 
or fuel additive. `` Under Section 209(b)(1) a waiver is provided to 
``any State which has adopted standards . . . for the control of 
emissions from new motor vehicles or new motor vehicle engines prior to 
March 30, 1966. `` California is the only State which meets this 
requirement; as a result, this legislation applies exclusively to 
California, and without further amendment (and the science to support 
or justify such amendment) cannot be utilized by any other State.
    Mr. Chairman, I also want to make clear to this committee that I am 
highly sensitive to concerns which have been expressed previously that 
this bill might somehow be a ``first step'' in efforts to ``undermine'' 
the national oxygenate requirement. Let me again clarify that this is 
neither the intent nor the effect of S. 1576--it is applicable only to 
California. Questions about the national program itself may arise and 
may be legitimate, but they are a horse of an entirely different color, 
and one which may well be saddled up at some point in the future, 
perhaps by future Congresses during reauthorization of the Clean Air 
Act. However, that is a discussion for another time, and is not what we 
are about here today with Senator Feinstein's and my bill. Again, it is 
narrowly written to be California-specific and to meet California's 
unique circumstances; it cannot be ``piggy-backed'' upon by other 
States, without the appropriate congressional action. If other States 
should have similar intentions, that is certainly their prerogative--
but that is a matter for individual States to decide, and to pursue on 
their own. California's exclusive status under the Act as written, and 
this bill which builds upon it, do not provide other States that 
opportunity.
    Expanding further on this, Mr. Chairman, S. 1576 is content-
neutral. It is written to provide California added flexibility to 
continue to meet and improve upon its already stringent emissions 
standards. In doing this, it does not mandate the use, nor does it ban 
the use, of any fuels additive which might be used to manufacture 
cleaner-burning gasoline in California. I would also point out that 
this legislation, which I first introduced in the 104th Congress as 
H.R. 3518, largely predates the current discussion in California over 
MTBE use in reformulated gasoline.
    As Senator Feinstein recognized with her introduction, the beauty 
of this bill is that it is content neutral and outcome-based. By not 
mandating the use of particular ``recipes'' in California's cleaner-
burning gasoline, S. 1576 provides the ability for the State to improve 
on its clean air successes, while being able to respond to previously 
unforeseen concerns that science may show to impact our environment and 
public health.
    Science must be what guides us in these endeavors, and sound 
science is the foundation on which the California Air Resources Board 
has built its stringent reformulated gasoline program. My approach to 
this is simple--allow the State to ``set the bar high'' from an 
emissions reduction standpoint (as it has done), and allow it to have 
the added flexibility or options by which to reach that bar without 
mandates, one way or the other. Regardless of one's perspective on MTBE 
or any other additive, science is what must dictate this approach, not 
government mandates.
    At the hearing on H.R. 630 which was held in the Commerce Committee 
this past Earth Day, there was testimony which suggested that this 
legislation would somehow result in ``dirtier air'' in California, or 
the ``weakening'' of our State's stringent standards. The implication 
that Senator Feinstein, myself, and the bipartisan legion of our 
California colleagues that support the bill would do anything to 
willingly undermine California's air quality is outrageous in and of 
itself, and in my mind simply indicates an unwillingness to discuss the 
bill in a factual manner.
    California has the toughest air standards in the world, and is 
constantly seeking to improve them. Additionally, the California 
program is enforceable federally under its State Implementation Plan 
(SIP). It is therefore difficult to envision a scenario under this bill 
in which California would do anything but continue to build on the 
successes it has achieved to date in reducing air pollution. Both our 
responsibility to the public and simple reality indicate that clean air 
strategies in California will not be allowed to move backwards; rather 
we are working together to pioneer new gains in protecting the public 
health. I am certain that Mr. Dunlap will confirm California's resolve 
in this regard.
    A last word on the public health merits of this bill, Mr. Chairman. 
At the Earth Day hearing on H.R. 630, I asked that several levers of 
support for the Bilbray/Feinstein legislation be included in the 
record. I do not wish to be redundant, but I do believe it is important 
for the Senators on this committee to be aware of this significant 
measure of support--from the California Air Pollution Control Officers 
Association, the South Coast Air Quality Management District, the San 
Diego County Air Pollution Control District, the Sacramento 
Metropolitan Air Quality Management District, the Santa Barbara County 
Air Pollution Control District, and the San Joaquin Valley Unified Air 
Pollution Control District, among others. Such an accounting from the 
ranks of California's clean air professionals further underscores the 
public health-oriented foundation of this legislation, and I would 
submit these letters to the record for the committee's consideration.
    Finally, Mr. Chairman, I know that there have been concerns 
expressed by several Members, Senators, and other stakeholders, to 
which I know you are also sensitive, not about the practical effects of 
S. 1576 but about the potential for ``opening up'' the Clean Air Act. I 
am frankly pleased at the unanimity which is found here, and am 
reassured to see so many colleagues and other interested parties on the 
same proverbial page with Senator Feinstein and I on this. We have 
concerns about ``opening up the Act'' also. That is why the bill is 
drafted as narrowly as it is, and is structured to build upon 
California's existing unique status under the Clean Air Act. This bill 
is quite simply a narrow, targeted ``fix'' to strengthen a California-
specific section of the Act.
    This committee, and the House Commerce Committee, has on several 
occasions in recent years demonstrated its ability to shepherd though 
the legislative process bipartisan ``rifle-shot'' amendments to the 
Act, without ``opening it up''. I believe that such a scenario could be 
repeated in this instance, Mr. Chairman, and would have the utmost 
confidence in your ability to do so. I have similar confidence in 
Chairman Bilirakis and Chairman Bliley, both of whom have publicly 
stated their willingness to maintain the integrity of this legislation. 
I recognize that time is short in this session, and understand the 
concerns expressed by other stakeholders about the Act. However, given 
the assurances which have been delivered, I feel that we ought to be 
able to move forward in discussions of the bill without being 
distracted by concerns about ``opening'' the Act.
    To conclude, Mr. Chairman, since the 104th Congress, I have tried 
to be as plain as I can about my intent with this bill, and believe 
that while differences in perspective may remain, there are no 
surprises here. It is my hope that the committee's time today will not 
be excessively occupied with extensive and redundant discussion of 
hypotheticals and conjecture. I would respectively submit that among 
the parties which have been and are in involved and interested in this 
issue, the practical effect of this bill is clear, and has been 
vigorously and thoroughly contemplated now for the better part of two 
Congresses.
    What we can and should talk about and focus on today is the hard 
science and the facts which underlie the bill. In essence, California 
has different clean air needs than the rest of the nation. The Clean 
Air Act already reflects this. Going a step further, California has 
built the proverbial ``better mousetrap'', one which, with all due 
respect, may not have been envisioned during completion of the Clean 
Air Act amendments of 1990. S. 1576/H.R. 630 will build on those 
accomplishments to maximize the State's ability within the Act to 
address and improve upon its clean air strategies. This can occur 
without opening up the Act, or creating unmerited loopholes for other 
States without the requisite Congressional review. These are the facts 
that I hope will be discussed here today, and I look forward to the 
testimony of the witnesses.
    On MTBE specifically, Mr. Chairman, I strongly suggest that we 
continue to be guided by science. We know there have been significant 
benefits in reducing smog-forming compounds throughout California as a 
direct result of cleaner-burning gasoline. I have a series of newspaper 
articles which reflect this, and which I would ask to be included in 
the record. On groundwater contamination, we know that there are 
problems with plumes resulting from tank leaks and spills, and are 
moving to address these. We are closer to having a much better 
understanding of the impacts of MTBE, from the University of California 
study and the California Energy Commission study. I will defer to Mr. 
Dunlap for an update on the status of those and other research efforts.
    We must adhere to science even in the face of the difficult 
situations we face in parts of California which have experienced 
problems with groundwater contamination from MTBE. Quite clearly, Mr. 
Chairman, there are Q components of gasoline which belong in our 
drinking water, MTBE among them, and we must pursue every effort to 
correct and mitigate for the leakage and contamination problems which 
have been documented throughout our State. However, as the EPA has 
pointed out, it is important to compare the risks of any gasoline 
additive to the components of gasoline which it replaces. We must keep 
in mind that while MTBE certainly warrants additional careful research, 
its use in California's cleaner-burning gasoline has reduced 
considerably the presence of benzene, which is a known and dangerous 
human carcinogen.
    I strongly believe that the flexibility provided under Senator 
Feinstein's and my legislation provide the tools California needs to 
best manage and respond to this situation. Again, the beauty of the 
bill is in the outcome-based process of providing the flexibility 
needed to continue to produce CBG by moving away from mandates, 
flexibility is provided also for responding to other public health 
concerns. As science provides us with the best strategies for 
responding to these concerns, we can and must continue to act swiftly 
to address them.
    As the Secretary of the California EPA, Peter Rooney, testified to 
this committee on this issue previously (12/9/97) ``The problem we are 
discussing here today is yet another example of what can happen when 
the Federal Government tells States not just what to do, but how to do 
it. Do not mandate technology. Set standards, hold us to them, but 
allow us to determine how best to meet them--in this case, through 
California's far stricter reformulated gasoline requirements that build 
in flexibility for producers.''
    In conclusion, I would like to again thank Senator Feinstein for 
her leadership on this important matter, and appreciate your 
consideration and that of this committee. Thank you, Mr. Chairman.
                               __________
    Statement of John D. Dunlap III, Chairman, Air Resources Board, 
               California Environmental Protection Agency
    Thank you, Chairman Chafee and members of the committee for holding 
today's hearing on S. 1576, introduced by Senator Dianne Feinstein. On 
behalf of Governor Pete Wilson and Cal/EPA Secretary Peter Rooney, I 
appreciate the opportunity to provide California's thoughts on the 
measure before you today.
    The Wilson Administration supports S. 1576, which would enable 
California's cleaner-burning gasoline program to reduce its dependence 
on MTBE and other oxygenated gasoline additives.
    As the only State with its own gasoline program, California is in a 
unique legal and institutional position to be a proving ground for what 
can be accomplished nationally with a performance-based environmental 
program.
    S. 1576 represents an opportunity for the entire nation to observe 
the outcome of California's trailblazing program. We also believe this 
bill can help California respond rationally and effectively to public 
concern over MTBE. If we are successful, the Federal Government would 
benefit from our experience with a market-oriented and performance-
based approach. For these reasons, Congress ought to quickly pass S. 
1576 and Rep. Brian Bilbray's H.R. 630, rather than waiting many months 
or even years to try to craft controversial national changes to the 
Federal oxygenate program.
    As you probably know, California faces our nation's greatest air-
quality challenges. Seven of the 10 metropolitan areas with the highest 
smog levels in the United States are in California. Because of these 
challenges, California has done more than any other State to reduce air 
pollution. In keeping with our tradition of leadership, California in 
1996 introduced the world's cleanest gasoline.
    The use of cleaner-burning gasoline in 1996 reduced peak smog 
levels by an average of 10 percent in Greater Los Angeles and 12 
percent in Sacramento. No other single measure in California's history 
ever reduced air pollution so dramatically in its first year.
    And yet, this unparalleled success has been overshadowed by public 
concern over the use of MTBE to meet Federal requirements for the 
addition of oxygen to gasoline.
    In 1990, the U.S. Congress approved an amendment to the Federal 
Clean Air Act mandating the use of gasoline containing 2 percent oxygen 
by weight in regions classified as being in severe or extreme non-
attainment for the Federal ozone standard. To remain in compliance with 
this Federal requirement, about 70 percent of the gasoline used in 
California during a given year must contain 2 percent oxygen by weight, 
year-round, with no exceptions. This includes gasoline used in the 
Greater Los Angeles area, Ventura County, San Diego and the greater 
Sacramento area.
    In 1991, the year following the Federal Clean Air Act Amendments, 
the Air Resources Board (ARB) established its own cleaner-burning 
gasoline specifications. We went ahead with our own specifications 
because we determined that Federal Reformulated Gasoline would not 
provide sufficient clean-air benefits to enable California to attain 
the Federal ozone standard.
    California's gasoline provides about twice the air-quality benefits 
of Federal Reformulated Gasoline. California gasoline reduces smog-
forming emissions from motor vehicles by about 15 percent, compared to 
a 7 to 8 percent reduction from the current Federal gasoline.
    The ARB has always viewed gasoline oxygenates such as MTBE as an 
important option that should be available to refiners for making 
cleaner-burning petroleum products. At the same time, it is possible to 
make commercial quantities of cleaner-burning gasoline without mandated 
levels of oxygenated additives. We believe strongly that Federal and 
State law should set content neutral performance standards for refiners 
to meet, rather than prescribing oxygen levels.
    However, given the fact that most California gasoline was subject 
to the Federal oxygen requirement, the ARB in 1991 felt compelled to 
include the Federal oxygen requirement in its cleaner-burning gasoline 
specifications. Thus, California was committed to the use of oxygenated 
gasoline in order to remain consistent with the requirements of the 
Federal Clean Air Act.
    The story does not end there. In 1994, California added flexibility 
to its gasoline regulations by approving the use of a predictive model. 
This model, developed by ARB with data from emissions tests involving a 
large number of motor vehicles and fuels, predicts emissions from 
various gasoline formulations.
    If a refiner wishes to produce gasoline that varies from the ARB 
fuel specifications, including the oxygen requirement, it can do so 
provided that the predictive model indicates there will be no increase 
in emissions.
    The predictive model changed our cleaner-burning gasoline program 
from a command-and-control program based on rigid fuels specifications 
to a ``performance-based program'' in which refiners concentrate on 
meeting emissions standards.
    Because of the predictive model, refiners have incentives to 
develop innovative fuel formulations that offer advantages over 
conventional formulations.
    Refiners also have the ability to evolve with changes in technology 
and market conditions, rather than remain rooted in the mindset that 
prevailed when the original specifications were adopted.
    Refiners in Northern California routinely use the predictive model 
to reduce the oxygen content of their gasoline. One refiner is now 
producing and selling non-oxygenated gasoline. This is possible because 
the Federal oxygen requirement does not apply to most Northern 
California gasoline.
    Incredibly, the Federal oxygen rule prevents those refiners from 
selling the Northern California gasoline with reduced or no oxygenates 
in Southern California, even though the Northern California gasoline 
provides twice the clean air benefits required by the Federal 
Government.
    The Federal oxygen rule severely limits the flexibility that the 
ARB has given refiners of California gasoline. As I just pointed out, 
our predictive model still requires California gasoline to meet our 
State standards, which provide twice the clean-air benefits required by 
the Federal Government. The Federal oxygen rule may serve a purpose in 
the other 49 States, which do not have their own fuel specifications. 
But in California, which is the only State with its own comprehensive 
fuel standards, the Federal oxygen rule serves no useful purpose. It 
does not take pollutants out of the air; it only limits refiners' 
ability to develop the best ways to meet or improve upon our standards.
    The growing public concern over MTBE provides California and the 
Congress with an important reason to support this bill. No Federal or 
State law mandates MTBE. But refiners have chosen to use MTBE in 
virtually all California gasoline, because it represents the most 
practical way by far to meet the oxygen requirement. Unfortunately, 
MTBE releases have severely impacted drinking-water supplies in the 
City of Santa Monica and the South Lake Tahoe area. MTBE also has been 
found at lower concentrations in other areas of the State, which has 
sparked widespread concern.
    This concern is driven, in part, because the Federal oxygen rule 
gives refiners no viable alternative to the widespread use of MTBE in 
California. This had led many Californians to wrongly perceive that 
cleaner-burning gasoline represents a tradeoff between clean air and 
clean water. S. 1576 will correct that.
    I am NOT suggesting that S. 1576 will prevent MTBE releases into 
water--California's underground tank upgrade program is the primary 
measure for protecting water from contamination by all fuel components.
    I am NOT suggesting that S. 1576 represents a ban or restriction on 
the use of MTBE; here again, let me emphasize that the bill is content-
neutral. MTBE should remain an option for all refiners.
    But the key word here is ``option''. There is no inherent reason 
why cleaner burning gasoline must have 2 percent MTBE or any other 
oxygenate by weight. California refiners have shown that it is possible 
to make cleaner-burning gasoline with 1 percent oxygen, and even no 
oxygen at all.
    By exempting California from the Federal oxygen rule, S. 1576 would 
give refiners the option of reducing the MTBE content of their gas 
throughout California. The bill would give refiners more options for 
using other oxygenates, such as ethanol. I also believe S. 1576 would 
ease some of the public concern over MTBE, because the public would see 
MTBE use evolve to a level that balances its benefits as a clean-fuels 
additive with the need to manage it as a potential water contaminant.
    The bill still requires California gasoline to meet the world's 
cleanest standards. California needs all the air-quality benefits it is 
receiving currently from cleaner-burning gasoline, and we will not 
support any action that reduces those benefits. S. 1576 simply allows 
refiners to take full advantage of the flexible fuel standards that 
have reduced air pollution and increased protection of the public 
health in my State.
    In closing, I must emphasize again that S. 1576 represents an 
opportunity for California and the nation. As the only State with its 
own fuels program, California is a proving ground for what can be 
accomplished nationally. California refineries are the most modernized 
in the country. California's air quality infrastructure--including the 
nation's most sophisticated and extensive air monitoring network--
enables us to verify the success of our gasoline program.
    S. 1576 will allow our flexible gasoline program to provide its 
best response to public concern over MTBE. If our program deals 
successfully with that concern, the Federal Government at least would 
have the option of using California's experience as it addresses MTBE 
concerns nationally.
    As long as California is subject to the Federal oxygen rule, our 
ability to respond to MTBE concerns will be extremely limited. The 
burden of addressing the growing unease over MTBE in California and 
other States will come full-force to the nation's capital, and it will 
remain here in the nation's capital.
    I urge the committee to act favorably on S. 1576 as swiftly as 
possible. Thank you.
                               __________
     Statement of Edward O. Sullivan, Commissioner, Department of 
                Environmental Protection, Augusta, Maine
    Good afternoon. Chairman Chafee and members of the committee. I am 
Ned Sullivan, commissioner of the Maine Department of Environmental 
Protection, and I am pleased to come before you to share Maine's 
experience with the Federal reformulated gasoline program and with the 
oxygenate MTBE.
History of Maine's participation in the reformulated gasoline program
    The Clean Air Act Amendments of 1990 required that reformulated 
gasoline be sold in the nation's worst ozone nonattainment areas. The 
law also provided that a State with lesser ozone nonattainment problems 
could participate in ('' opt into'' ) the program by making a formal 
request to the EPA administrator.
    In 1991, as part of a regional action to achieve and maintain 
attainment with the Federal ozone standard, Maine's Governor John 
McKernan requested that the entire State participate in the program. 
EPA responded that Maine could only ``opt in'' counties described as 
marginal nonattainment or worse.
    Maine eventually proceeded with RFG sales in 7 counties. The 
program was officially implemented January 1, 1995.
    The RFG blend is the same one sold in parts or all of 11 northeast 
States and the District of Columbia. As required by Federal law, it 
must contain at least 2 percent oxygen. This is accomplished by adding 
an ``oxygenate'', which in Maine and most States, is MTBE.
Benefits provided by Maine's RFG program
    The RFG program accounts for nearly one-third of the hydrocarbon 
emissions reductions Maine is required to achieve under the Clean Air 
Act. The program provides reductions comparable to a state-of-the-art 
vehicle emissions testing program--an option that was soundly rejected 
by Maine voters and lawmakers. As the remaining core component of 
Maine's Clean Air Plan, RFG was projected to reduce the amount of 
hydrocarbons emitted to Maine's air by seven tons per summer weekday.
    Air quality in Maine has improved. Since the program has been in 
force, we have continued to see a downward trend in the number of days 
that monitored ozone levels exceed the Federal 1-hour standard. This 
has happened despite a slight increase in average temperature, which 
would be expected to trigger additional episodes. (CHART)
    The improved air quality has been recognized by EPA, which has 
revoked the 1-hour ozone standard for four counties, effectively 
considering them to be in attainment. Maine and EPA are reviewing the 
summer's ozone data to determine whether additional counties can also 
be given a clean bill of health under the 1-hour standard.
    In addition, we have monitored a reduction in the toxic compounds 
detected in ambient air. Motor vehicles are estimated to account for 
roughly fifty percent of all cancers associated with exposure to air 
toxins. However, RFG burns more cleanly and more completely destroys 
toxic components of gasoline, making the emissions themselves less 
poisonous. More to the point today, MTBE, as the oxygenate component of 
RFG, replaces some of the benzene in conventionally-blended gasoline. 
(CHART) The first round of monitoring since RFG has been in use in 
Maine has shown a 22.5 percent reduction in benzene levels of ambient 
air. Benzene is a known carcinogen.
    According to a study conducted by the Northeast States for 
Coordinated Air Use Management (NESCAUM), the cancer risk reduction 
associated with the use of RFG in the Northeast ranges from a low of 9 
percent to a high of 12 percent as compared to conventional gasoline.
Public and legislative concern regarding Maine's RFG program
    Despite these benefits, Maine people have been concerned about RFG 
use since before the program was even implemented. Health risk 
implications as well as cost and performance considerations were 
examined during public hearings and meetings.
    During the first 2 months of the program (January and February 
1995), the State's Bureau of Health received numerous complaints 
regarding the new gasoline blend. They included dizziness, 
lightheadedness and respiratory symptoms. Skin irritations were also 
reported. In March 1995, Governor King chartered a task force of health 
professionals to survey the literature on health risks, evaluate the 
health problems reported by Maine people, and consider the pros and 
cons, from a health perspective, of continuing to use RFG. The task 
force did not recommend banning RFG but did call for more air sampling 
and an additional study of MTBE health effects.
    In every legislative session since January 1995, a bill has been 
introduced to terminate Maine's RFG program. In every instance, the 
primary argument against the program has been the health and 
environmental risks that some associate with MTBE. The resulting 
debates and calls for additional studies have thus far enabled the 
program to remain the cornerstone of Maine's clean air plan, albeit 
with shaky support.
    During the last session, the State Bureau of Health gained 
legislative support for a drinking water standard for MTBE. The State 
toxicologist proposed that the standard be 35 ppb, and that was adopted 
by the legislature after considerable discussion. It was also 
understood at that time that the State's environmental protection 
agency (DEP) would take the more conservative position of cleaning up 
any water supply showing 25 ppb.
MTBE and Maine's ground water
    Maine's Department of Environmental Protection first documented 
MTBE in ground water in 1985, 10 years before MTBE-containing RFG was 
sold in Maine. The contamination was linked to leaking underground or 
above ground gasoline storage tanks. We are now nearing completion of 
our underground storage tank replacement program, having removed more 
than 30,000 or 98 percent of them.
    This past June, I reported to the Maine State Legislature on the 
levels of MTBE in drinking water supplies. Approximately 84 percent of 
the private wells showing detectable levels of MTBE had concentrations 
below DEP's 25 ppb threshold for taking action. Seven percent exceeded 
the State Bureau of Health's health guideline which was then 50 ppb. We 
are now updating our figures to address the recent adoption of a new 
health standard.
    Also in June, the Bureau of Health reported to Governor King and 
the legislature that 23 of 333 public water supplies (approximately 7 
percent ) had detectable levels of MTBE. The mean concentration was 2.8 
ppb.
    Despite this history, public concern heightened sharply this spring 
as a string of contamination events focussed even more public attention 
on the potential for MTBE contamination of Maine's ground water. 
Notably, more than 60 percent of the population of Maine rely on wells 
for their drinking water supplies.
    Briefly, those events included:
    Gasoline contamination at a new state-of-the-art station and 
convenience store located 700 and 1,100 feet respectively from two 
public wells serving 3,000 customers in a growing community in southern 
Maine. MTBE was detected at trace levels in both wells: fortunately 
these levels appear to have peaked at approximately 3 ppb and are 
declining. MTBE at the gas station, however, reached 7,140 ppb and 499 
ppb at an off-site monitoring well. The gasoline station has been shut 
down since April. The exact source of the contamination has not been 
pinpointed.
    In May, private well contamination by MTBE was discovered in the 
adjoining town. Twenty-four wells had some detectable levels of the 
compound, with eleven showing contamination requiring filtration. The 
current thesis is that a car accident resulting in the spill of a small 
amount of gasoline led to this widespread problem.
    During the same week in May, MTBE at nearly 500 ppb was detected in 
a well supplying an elementary school. The water is now being filtered 
for washing and the school is relying on bottled water for drinking. 
One new well has been dug and another may be needed to fully rectify 
the problem. Again the cause seems to be spillage from a vehicle on 
site. The amount spilled was probably quite small.
    In each instance, the public has seen high visibility 
contamination, by a compound many have already begun to distrust, 
caused by a relatively small, or even unknown, accident. This has 
contributed significantly to public anxiety.
    Governor King has acted quickly and decisively by ordering that all 
public wells and 1000 private wells throughout the State be tested to 
determine the extent to which MTBE is showing up in Maine's drinking 
water. He has also ordered DEP to study alternatives to the current RFG 
formulation in the event that our study supports a decision to cease 
using MTBE. In addition, we are exploring measures to protect our 
ground water from new spills or leaks. Decisions will be made on next 
steps later this month once the test results have been analyzed.
Problem definition and proposed solution
    We have quickly found ourselves in the midst of a public policy 
dilemma. We recognize the real clean air benefits produced in a 
relatively short time as a result of using MTBE-containing RFG in 
Maine. On the other hand, there appears to be growing evidence that 
this same product is causing water quality problems that may prove to 
be significant.
    Given the need to maintain the improvements we have recorded in air 
quality, and the commitment to make additional strides toward cleaner 
air, we must continue to aggressively address pollution caused by 
petroleum-powered motor vehicles.
    The problem seems to be the inflexibility posed by the Federal 
definition of RFG. It requires the use of oxygenates like MTBE at 
specified levels.
    With growing public concerns, unfinished studies and the continuing 
need to develop a sound data base regarding the benefits and risks 
associated with MTBE, this requirement limits our options. It limits 
our ability to switch to other fuels that might not contain as much, or 
even any, oxygenate, yet offer the same, or greater, environmental 
benefit, at less environmental risk. It dictates a control strategy 
that may not be the best for Maine.
    In contrast, with the exception of its mandate for a vehicle 
emissions testing program in Ozone Transport Region States, the Clean 
Air Act often sets performance standards while allowing flexibility as 
to how the goals are achieved. A prime example of this is the 
development of State plans to reduce emissions of volatile organic 
compounds by 15 percent. There are Federal guidelines and clear 
performance standards to be met, but the plans need not fit a specified 
template.
    I believe that this should also be the model for RFG. Federal and 
State law should set content-neutral performance standards for gasoline 
that will provide the required air quality benefits: these same laws 
should not set prescriptive content volumes for refiners to meet.
    Because they now do, Maine finds itself constrained as we try to 
develop the best clean air strategy. As a State we consume a tiny 
fraction of the national gasoline market. We are subject to a mandate 
that dictates a particular approach to our region's needs. We don't 
have the flexibility, let alone the clout, do what may be best for our 
State.
    The States can meet the requirements and goals of the Clean Air 
Act, with your help. By setting tight performance standards instead of 
product mandates, the Federal Government paves the way for achieving 
the best results at least cost . . . results that tolerate no 
environmental backsliding but results that avoid environmental risk-
shifting.
    In conclusion, I would urge you to support legislation that would 
provide such flexibility nationwide. I would be happy to work with the 
committee in crafting such legislation.
    Thank you for your attention.
                               __________
 Statement of Daniel S. Greenbaum, President, Health Effects Institute
    Mr. Chairman, Senator Baucus, and members of the committee, I am 
pleased to have the opportunity to testify before you today to present 
the views of the Health Effects Institute (HEI) on the health effects 
of MTBE in gasoline. My name is Dan Greenbaum, and I am President of 
HEI, an independent, not-for-profit research institute, funded jointly 
by U.S. EPA and industry to provide high-quality, impartial, and 
relevant science on the health effects of air pollution to inform 
public and private decisions.
    HEI, as one part of its larger strategic research plan for air 
pollution, has been engaged in scientific assessment and research on 
MTBE and other oxygenates added to gasoline for several years. In 1995 
and 1996, at the request of the White House Of lice of Science and 
Technology Policy (OSTP), and of the Administrator of EPA, we convened 
an Expert Panel to review all existing science on exposure to and 
health effects from the addition of MTBE and Ethanol to gasoline. Their 
report, The Potential Health Effects of Oxygenates Added to Gasoline, 
which I will present to you today, became part of the larger 
Interagency Assessment of Oxygenated Fuels completed by OSTP last year. 
Following that report, HEI launched a targeted program of studies to 
answer key remaining questions about these oxygenates, most notably the 
first studies of the potential interaction of MTBE in a mixture with 
gasoline, and studies comparing the body's metabolism of MTBE with 
other additives such as ETBE and TAME.
The Potential Health Effects of Oxygenates Added to Gasoline
    In April 1996, the HEI Oxygenates Evaluation Committee--consisting 
of leading experts in toxicology, epidemiology, cancer, reproduction 
and development, and exposure, and chaired by the former Director of 
the National Cancer Institute Dr. Arthur Upton--issued the report of 
its 9-month review of all available data on the health effects of 
oxygenates added to gasoline. This study, which involved detailed 
review of over 300 individual studies of MTBE and ethanol, looked at 
the detailed effects of each substance and found that there were a 
number of potential short term and cancer health effects for MTBE whose 
existence in humans needed further investigation, but that there were 
not likely to be any health effects from ethanol at the levels to which 
most people would be exposed. The Committee then attempted to place the 
MTBE effects in the context of what the scientific community knows 
about the effects of exposure to vapors and emissions from gasoline 
that does not contain oxygenates. Overall, the Committee concluded 
that:
    The potential health effects of exposure to components of 
conventional gasoline (without oxygenates) include short-tern and 
cancer effects similar to those that could result from exposure to 
gasoline containing oxygenates.
    Adding oxygenates to gasoline can reduce the emission of carbon 
monoxide and benzene from motor vehicles, and thereby lower certain 
risks to members of the population. At the same time, using oxygenates 
increases exposure to aldehydes, which are carcinogenic in animals, and 
to the oxygenates themselves.
    Adding oxygenates is unlikely to substantially increase the health 
risks associated with fuel used in motor vehicles; hence the potential 
health risks of oxygenates are not sufficient to warrant an immediate 
reduction in oxygenate use at this time. However, a number of important 
questions need to be answered if these substances are to continue in 
widespread use over the long term.
    For the committee's benefit, I have attached a list of the members 
of the Oxygenates Evaluation Committee, and a copy of the report's 
executive summary. We have also provided the full report to your staff.
Further Analyses and Research on Oxygenates in Gasoline
    Subsequent to the release of the HEI report, research and analyses 
continued on several fronts:
    The Interagency Assessment of Oxygenated Fuels In June, 1997, the 
Office of Science and Technology Policy issued the results of its 
comprehensive review of the use of oxygenates in fuel. This review, 
which incorporated the HEI findings on health effects, and also 
analyzed the effects of oxygenates on fuel economy, engine performance, 
and water quality, drew similar conclusions to those of HEI on the 
health effects of MTBE. In reviewing the health effects, the 
Interagency Task Force also conducted a preliminary quantitative risk 
assessment for MTBE, based on animal cancer data, and concluded that:
    '' The estimated upper-bound cancer unit risks for MTBE are similar 
to or slightly less than those for fully vaporized conventional 
gasoline, substantially less than that for benzene, a minor constituent 
in gasoline that is classified as a know human carcinogen; and more 
than 100 times less than that for 1,3-butadiene, a carcinogenic 
emission product of incomplete fuel combustion.''
    The World Health Organization Earlier this year, the International 
Programme on Chemical Safety (IPCS) of the World Health Organization 
issued its Environmental Health Criteria for MTBE. They reached many 
conclusions similar to those of HEI and the Interagency Report and, as 
a result of an detailed review of the data on MTBE and cancer, 
concluded that:
    '' Based on these data, MTBE should be considered a rodent 
carcinogen. MTBE is not genotoxic and the carcinogenic response is only 
evident at high levels of exposure that also induce other adverse 
effects. The available data are inconclusive and prohibit their use for 
human carcinogenic risk assessment until outstanding complications in 
their interpretation have been addressed.''
    New research In keeping with the needs identified in the HEI 
report, additional research, funded by HEI, by industry in response to 
U.S. EPA requirements under section 211 of the Clean Air Act, and by 
other government agencies has gone forward to answer key questions, 
including understanding better (1) the way MTBE and other oxygenates 
such as ETBE and TAME are metabolized by the body, (2) how MTBE might 
cause cancer, and (3) the effects of MTBE-gasoline mixtures.
    In addition, in response to concerns about the potential effects of 
MTBE in drinking water, the State of California in October, 1997 
enacted legislation requiring a comprehensive analysis of the health 
and environmental significance of MTBE and other oxygenates by the 
University of California, and the U.S. EPA issued in April of this year 
a draft Research Strategy for Oxygenates in Water.
    The studies underway as a result of these efforts are expected to 
provide new information over the next 12 to 18 months. To date, 
however, relatively few studies have been completed beyond those 
reviewed in the HEI Oxygenates Study.
The Issue of MTBE in Water Supplies
    Both the HEI and the Interagency Task Force reports identified 
reports of water contamination by MTBE as a potential route of 
exposure, but noted that there were relatively few data on the extent 
of such contamination, or the health effects of ingesting rather than 
inhaling MTBE. The Interagency Report also noted that MTBE appears to 
move faster in ground water and is more resistant to biodgradation than 
other components of gasoline, although the data on this issue, 
particularly from field studies, is limited.
    Given concerns about potential contamination of drinking water, 
California in 1991 established an ``action level'' for MTBE in drinking 
water of 35 g/L, and U.S. EPA, in December, 1997, published a 
drinking Water Advisory for MTBE that identified the level of 20--40 
g/L as a level below which health effects are unlikely, and 
above which water users are likely to smell and/or taste MTBE before 
levels become unhealthful. Most recently, California is considering the 
establishment, in response to recent legislation, of a Maximum 
Contaminant Level, or ``goal'' of 12.5 g/L.
    In recent years, in response to drinking water concerns, there has 
been an increase in the sampling of water supplies for MTBE, especially 
in California. To date, the results of that sampling confirm the 
findings in the Interagency Report that MTBE is detected in a 
relatively small number of water sources of those tested, and of those 
where it is detected, relatively few have levels above existing or 
proposed levels of concern. Specifically, as of February, 1998, 
California had tested 24 percent (2,638) of all water sources in the 
State, and detected MTBE in 1.3 percent (34) of those sources. Of those 
34 where MTBE was detected, five sources, which had been contaminated 
by leaking underground storage tanks, had levels in excess of the 
current California action level, and nine sources appeared to have 
levels exceeding the currently proposed M.C.L.
    Thus, it appears that contamination to date has not been 
widespread, but that potential drinking water contamination by MTBE 
continues to be of some concern and regular monitoring, particularly of 
wells located near underground storage tanks, may be appropriate.
Summary and Conclusions
    In closing, let me thank the committee again for this opportunity 
to testify, and summarize the key points of my comments:
    First, reviews of the health effects of MTBE in gasoline by HEI and 
others have concluded that although potential health effects have been 
identified, the use of oxygenates in gasoline does not appear to 
substantially increase the risk of health effects from inhalation when 
compared to gasoline without oxygenates.
    Second, questions about these health effects continue, and HEI, 
government agencies, and industry groups have studies underway to 
address them; and
    Third, incidents of high levels of contamination of water supplies 
with MTBE have increased concerns about the health effects of ingesting 
MTBE, although more comprehensive sampling has suggested that such 
high-contamination incidents are relatively isolated to intense 
contamination incidents such as leaking underground storage tanks. 
Continued regular monitoring of water supplies may be appropriate to 
ensure that such risks do not become more widespread.
    Thank you for your attention. I would be pleased to answer any 
questions you might have, and to provide other information that might 
help the committee's efforts.
                               __________
  Statement by Al Jessel, Senior Fuels Specialist of Chevron Products 
                                Company
I. Introduction:
    Thank you Mr. Chairman. It is my pleasure to be here before the 
committee today to testify in support of S. 1576. My name is Al Jessel, 
and I am a Senior Fuels Specialist of Chevron Products Company. Chevron 
Products Company is a wholly-owned subsidiary of Chevron Corporation, 
which is an international energy and chemicals company with operations 
and facilities located throughout the world. Chevron is the largest 
producer of California cleaner burning gasoline (CBG).
    Chevron supports S. 1576 introduced by Senator Feinstein in the 
Senate, and similar legislation, H.R. 630, introduced by Congressman 
Bilbray and cosponsored by 48 other California members in the House of 
Representatives. This legislation would apply only to California, and 
would remove the duplication and conflict between the requirements of 
the Federal reformulated gasoline program and California reformulated 
gasoline program. I hope that after you hear the discussion today, and 
give this legislation its due consideration, you will move this 
legislation through the Senate Environment and Public Works Committee, 
and support its enactment into law.
II. History of California Fuels Authority Under the Clean Air Act
    Congress has long recognized the serious and unique air quality 
concerns in the State of California and allowed the State to establish 
its own fuel regulations. Prior to 1970, California was free to 
regulate fuels on its own. In the 1970 Clean Air Act, Congress 
specifically included a waiver from Federal preemption for California 
fuel regulations in section 211(c)(4)(B) to preserve California's 
authority to regulate fuels. While preempting other States and 
localities from establishing fuel regulations except as needed and 
approved as part of a State Implementation Plan, Congress allowed 
California, alone among the States, the express authority in the 1970 
Clean Air Act to establish its own statewide fuel regulations to help 
improve air quality.
    From 1970 to 1990, California used this authority to establish 
numerous State fuel regulations. These included regulations such as: 
(1) maximum sulfur content in 1975, (2) maximum (Reid) vapor pressure 
in 1975, (3) reduced lead content in 1976, (4) regulation of manganese 
content in 1977, and (5) California Phase 1 reformulated gasoline in 
1990.
    California Phase 1 RFG requirements adopted in September 1990 
provided new specifications for (Reid) vapor pressure, detergents, and 
deposit control additives, in addition to the complete phase out of 
lead in gasoline. These regulations became effective on January 1, 
1992. At the same time California adopted Phase 1 RFG requirements, the 
State Air Resources Board indicated its intention to propose a more 
comprehensive set of specifications for a reformulated or ``cleaner'' 
burning gasoline. In November 1991 California adopted those Phase 2 RFG 
requirements, which became effective on March 1, 1996. California Phase 
2 RFG was introduced into the marketplace beginning with the ozone 
season in 1996 and has been sold year-round since that time.
    In 1990, however, Congress reauthorized the Clean Air Act and added 
provisions for Federal reformulated gasoline in the nine cities with 
the worst summertime ozone conditions. Included on that list were two 
cities in California--Los Angeles and San Diego. Also included were 
provisions allowing other cities to opt into the Federal RFG program, 
as well as mandatory participation if cities were ``bumped'' up to 
``severe'' or ``extreme'' classification. Since 1990, a third 
California city--Sacramento has been added to the list of locations 
where Federal RFG requirements must be met. Therefore, practically 
speaking, the vast majority of gasoline sold in California falls under 
both the Federal rules and the more stringent State rules.
    Unfortunately, the 1990 Federal RFG provisions were established 
under a different portion of the Clean Air Act--section 211(k)--than 
the portion containing the original California fuels waiver--i.e., 
section 211(c)(4)(B). The 1990 Amendments were silent on the 
relationship between the new Federal RFG requirements in section 211 
(k), and the previously-existing California authority to establish its 
own fuel regulations under section 211(c)(4)(B). This silence has led 
to duplicative and overlapping State and Federal requirements on the 
California gasoline program. S. 1576 is intended to resolve this and 
fill the gap left in the Clean Air Act's intent thereby making it clear 
that California can develop its own fuels program without a 
counterproductive Federal overlay.
III. Comparison Between California and Federal RFG Programs
    There are at least four major points of comparison between the 
California and Federal RFG programs.
    First and foremost, the California CBG program provides greater 
emission reductions than does the Federal program. For reformulated 
gasoline currently in the marketplace, California CBG reduces nitrogen 
oxides (NOx) by 14 percent over conventional gasoline compared to the 
less than 1 percent for Federal (Phase I) RFG. In the year 2000 when 
Phase II Federal reformulated gasoline with its 6.8 percent NOx 
reduction becomes available, California CBG will still have lower 
emissions. EPA, in reviewing California's gasoline program has stated: 
``EPA believes that the standards for California gasoline are as 
stringent or more stringent than the proposed content and performance 
standards for Federal reformulated gasoline.'' (58FR11722, February 26, 
1993).
    Second, Similar to Federal RFG, California allows refiners to use a 
``predictive model'' or ``test certification'' to certify gasoline 
formulations as long as California's strict emissions performance 
requirements are met. California limits ranges for eight different 
parameters in formulating gasoline, and additionally refiners must also 
meet octane requirements for automobile performance. Overlaying the 
Federal RFG program simply imposes further constraints on an already 
constrained system without enhancing air quality.
    Third. enforcement of the California CBG program is based on 
periodic testing of gasoline from the various refiners to insure 
California CBG meets all State requirements. We have found this to be a 
very effective enforcement program. The Federal program relies more on 
self-monitoring, reporting, and recordkeeping, which we believe is less 
effective yet adds cost and complexity with no measurable air quality 
benefit. While EPA has recognized CARB's ability to enforce its rules 
effectively and has provided partial exemption for California from 
Federal enforcement mechanisms, the exemption sunsets at the end of 
1999. Passage of S. 1576 would eliminate this unnecessary overlap.
    Finally. Federal reformulated gasoline requires year-round oxygen 
as mandated in the 1990 Amendments, but is not required by California 
rules in the summer, or in the winter in a significant portion of the 
State. California's unique air quality problems have required unique 
solutions, among them a more stringent reformulated gasoline. To make 
the more stringent California formulations, refiners need flexibility 
to optimize how they blend gasoline, and make it cost-effectively. The 
oxygen mandate reduces this flexibility without providing an air 
quality benefit in the summer for ozone control. It is the stringent 
performance specifications for California CBG. not the oxygen content, 
that drives the exceptional improvements in air quality resulting from 
use of this gasoline.
    Of most recent concern to Californians is the environmental impact 
of MTBE use. Several drinking water supplies have become contaminated 
with MTBE, the most widely-used oxygenate in California gasoline. 
Within Chevron, we have instituted a nationwide program to look at all 
of our gasoline handling systems and processes, especially those 
handling oxygenated gasoline. We have assessed what additional 
safeguards beyond those required under Federal and State laws we might 
implement to further minimize the potential for gasoline components 
contaminating drinking water sources. From that assessment we 
instituted a series of additional company control measures to further 
reduce the potential of release of gasoline into the environment.
    The Federal oxygen mandate coupled with the more stringent 
California CBG emission reduction requirements, led refiners to use 
methyl tertiary-butyl ether, or MTBE, as the only practical oxygenate 
in California. While MTBE has many advantages in helping to meet 
California gasoline specifications, it also has a disadvantage common 
to all gasoline oxygenates, its high water solubility which makes it 
both more mobile and more difficult to remove from water than other 
gasoline components.
    The public in California--our customers--have become so concerned 
about MTBE that a ban was only narrowly averted in the California 
legislature last year. Legislature mandated studies will be complete 
early next year at which time the Governor is required to make 
decisions about the future of MTBE in California gasoline.
    Interestingly, the Federal oxygen content mandate, the stringency 
of the California CBG rules, and California's gasoline distribution 
system have restricted the use of some oxygenates like ethanol. Ethanol 
would make a good California gasoline blending component under certain 
circumstances. We believe the Federal mandate actually limits our 
ability to use ethanol in California CBG and I'm sure this was an 
unintended consequence.
    We have made a great effort in California to caution against the 
precipitous banning of oxygenates as this opposite extreme would 
inevitably bring with it its own set of unintended consequences such as 
disruption of a market that is already tightly constrained. The far 
better first step toward a solution is to remove the Federal 
overlapping requirement as proposed in S. 1576.
IV. Reasons S. 1576 is Needed and Benefits
    S. 1576 sponsored by Senator Feinstein, and H.R. 630 by Congressman 
Bilbray would neither ban nor mandate fuel formulations, but would 
allow each California fuel provider to individually choose to produce 
the most cost-effective and environmentally desirable formulation while 
meeting the State's rigid emission reduction requirements. In fact, it 
would allow the State's performance-based program to work as it was 
intended by California and as Congress allowed for two decades from 
1970 to 1990.
    Note the passage of S. 1576 is structured to impact only States 
that are allowed under the Clean Air Act to regulate their own fuels 
(without Federal preemption)--and California is the only such State. 
Yet even with the passage of S. 1576, Federal oversight of the 
California RFG program will continue--as it rightly should--through the 
EPA's responsibility for assuring that the California State 
Implementation Plan for improving air quality is adequate and is 
carried out. Federal oversight will continue, but the State's 
reformulated gasoline program will benefit from more flexibility to 
refiners than exists today.
    The benefits of S. 1576 include:
    1. Optimizing product formulation--Because California RFG has 
stricter emission reduction requirements, refiners need more 
flexibility in how they make their fuels. The Air Resources Board has 
recognized this need and has provided much of the needed flexibility. 
Unfortunately, refiners are unable to take full advantage because of 
constraints imposed by overlapping Federal RFG rules. S. 1576 would 
allow individual refiners to further optimize their gasoline product 
formulation for California as long as they meet the emission 
performance targets. In the highly competitive gasoline marketing 
business, this benefits not only the refiners, but ultimately gasoline 
consumers.
    2. Reducing use of oxygenates--The passage of S. 1576 will neither 
mandate nor ban the use of oxygenates such as MTBE. By removing the 
current oxygen mandate, S. 1576 will allow California refiners to 
optimize the use of oxygenates, potentially reducing those currently in 
use such as MTBE, and increasing others such as ethanol that are of 
less public concern. Chevron and other companies would welcome the 
flexibility to manufacture California CBG based on performance 
standards--not a mandated formula. Given this greater flexibility, some 
refiners may very well choose other oxygenates, oxygenate in lesser 
amounts, or no oxygenate at all. The passage of S. 1576 is a critical 
first step in that direction.
    The refining industry in California has made a very significant 
financial commitment to produce California CBG. We take very seriously 
our role in helping improve air quality in the State, and have invested 
billions of dollars in California alone to make California CBG. The 
benefits of the California CBG program are very significant--it is the 
equivalent of taking 3.5 million cars off the road, solely by reducing 
air emissions from the California fleet. Passage of S. 1576 will allow 
refiners more flexibility to address the environmental concerns that 
have arisen since the introduction of California RFG while maintaining 
the air quality benefits to the public that have occurred by reducing 
emissions from vehicles.
V. Efforts to Work With Interests in California on Regulatory Chances
    In addition to supporting S. 1576, we are also working closely with 
the State of California on a package of regulatory changes, which will 
hopefully provide some additional flexibility in the eight parameters 
regulated in gasoline while maintaining emissions performance. State 
regulatory changes are equally important to provide the formulation 
flexibility needed to reduce or eliminate the use of oxygenates in 
gasoline--without compromising the air emission reductions performance 
of California cleaner burning gasoline. Note, however that even with 
the passage of S. 1576 and the added regulatory flexibility, oxygenates 
will still be needed to address the wintertime CO non-attainment 
problem in Los Angeles, Fresno, and Lake Tahoe areas. Oxygenates are 
effective in reducing CO, particularly in the older automobile fleet.
VI. Chevron's Use of MTBE in California Cleaner Burning Gasoline
    Last December Chevron appealed to Congress and California 
regulators to allow cleaner burning gasoline to be made without 
requiring oxygenates such as MTBE. We had concluded it may be possible 
to make a cleaner burning gasoline without oxygenates, and still reduce 
emissions to the same extent achieved with current standards. We urged 
industry to work cooperatively with Congress and California regulators 
to explore options for reducing or eliminating MTBE altogether.
    We have been actively working to help achieve this goal as 
described in the above testimony. We have produced significant 
quantities of gasoline in California without MTBE, while still meeting 
California's stringent performance standard for gasoline. During the 
past two summers our Richmond refinery in California has manufactured 
about half of its gasoline without any oxygenate--this represents about 
10 percent of the total gasoline supplied by the oil industry to 
northern California. The California Air Resources Board recently 
eliminated the winter oxygen requirement for much of the same area so, 
once the State and Federal approval processes are complete, our 
Richmond refinery will be able to make non-oxygenate gasoline year 
around. However, full production of non-oxygenated gasoline is not 
possible now at Richmond due to the Federal oxygenate requirement in 
Sacramento, and lack of high octane components that can satisfy 
California's Cleaner Burning formulation constraints.
    Supplying the entire California gasoline market without MTBE will 
require further refinery modifications, and additional changes to both 
Federal and State requirements as discussed in our testimony. We 
believe it is possible to replace gasoline which currently contains 
MTBE with a combination of ethanol-blended gasoline and non-oxygenated 
gasolines, while maintaining the clean air benefits that the California 
Cleaner Burning Gasoline program has provided. We urge Congress to 
enact S. 1576 into law. We also pledge to continue to constructively 
work with the California Air Resources Board as they look how to modify 
their regulations to allow refiners to use less MTBE to meet 
California's strict performance standards.
    Thank you Mr. Chairman for the opportunity to testify before your 
committee today in support of S. 1576. I would be happy to answer any 
questions you or other members of the committee might have.
                               __________
   Statement of Douglas A. Durante, Executive Director, Clean Fuels 
                         Development Coalition
Introduction
    Good afternoon Mr. Chairman and members of the committee. My name 
is Douglas Durante and I am testifying on behalf of the Clean Fuels 
Development Coalition (CFDC) where I have served as executive director 
for the past 10 years. CFDC actively participated in the legislative 
and regulatory aspects of the mobile source provisions of the Clean Air 
Act Amendments of 1990, including serving on the EPA advisory committee 
that negotiated the final rules for the successful Reformulated 
Gasoline Program (RFG) provisions. It is important to note that after 
thorough debate, the RFG amendments passed the Senate floor with 
overwhelming bipartisan support by a resounding fine! vote of 69-30. 
The Clean Air Act Amendments of 1990 went on to pass the House 401-21, 
and the Senate 89-10. Many of you on this committee were instrumental 
in that effort.
Background on CFDC's Legislative And Regulatory Involvement
    CFDC is a non-profit organization with a diverse membership of more 
than two dozen member companies representing a variety of industry 
interests that include fuel oxygenate producers, American automobile 
manufacturers, an independent U.S. refiner, and others involved in the 
energy, agricultural and clean fuel businesses. Because of these 
diverse interests, CFDC has been involved in supporting clean fuel 
legislation and the development of national energy strategy which has 
fostered the development of clean fuel technologies.
    CFDC supports the continued implementation of existing Federal and 
California cleaner burning fuel programs, which have the demonstrated 
ability to reduce air pollution. Many of CFDC's member companies 
produce and market the very products that are used to make gasoline 
burn cleaner. These include fuel oxygenates which are not only used to 
make California's gasoline burn cleaner but are also used in many other 
parts of the country that have air quality problems associated with the 
combustion of gasoline.
    I should clarify that this testimony is being presented on behalf 
of CFDC and with the exception of our automobile manufacturers who 
have, at this time, taken a position of neutrality, all of our members 
strongly oppose S. 1576.
Position Summary
    We were asked to direct our testimony to the merits of a prescribed 
formula that includes a 2.0 percent (wt) oxygen level such as in 
Federal reformulated gasoline as compared to a performance standard. We 
believe those merits are considerable and oppose legislative efforts to 
change the Federal formula. We were also asked to comment on S. 1576 
and the progress of the RFG program. Simply put, RFG has been a fuel 
quality specification that has reduced emissions of carbon monoxide; 
more harmful toxic compounds, like benzene; and those emissions that 
contribute to the formation of ground level ozone pollution, or urban 
smog. This fuel quality specification, to the credit of industry and 
government, has been administered safely, efficiently, cost-
effectively, required no changes in consumer fueling and driving 
habits, and has had no adverse effects on vehicle performance. 
Reformulated gasoline, with oxygenates, has:
      Exceeded expectations for emissions and air quality 
benefits.
      Cost less than projected at under 3 cents per gallon 
nationwide.
      Consistently outperformed other formulations and 
substitutes.
      Reduced emissions in all vehicles using it, even more so 
in older cars.
      Reduced the consumption and import of crude oil.
      Provided States with an easily implemented option for 
reducing mobile source pollution.
      Gained widespread support throughout the U.S. based on 
its 3 years of success.
    Some have promoted legislative change in order to address concerns 
of MTBE in water. We do not believe this objective can be attained 
simply by allowing California refiners to use the California Air 
Resources Board (CARB) formula. Other proponents of change are refiners 
who desire ``flexibility'' to meet emission reductions. The effect of 
providing such flexibility will be to strike down the prescribed 
Federal formulation which has been extremely effective in improving air 
quality and would necessitate amending the Clean Air Act.
    As for the first objective relating to MTBE in water, we believe 
the focus of any corrective measures should be on the leaking gasoline 
tanks. Allowing a substitute formula that will still use MTBE as would 
be likely, is hardly the solution. Yet we believe it is worth finding a 
solution so that oxygenates remain in gasoline due to the many benefits 
they provide. The leaking gas tanks pose a threat to public health from 
exposure to a variety of chemical compounds currently in gasoline and 
must be dealt with.
    The second objective of ``flexibility'' is unwarranted. In addition 
to its success in reducing ozone, Federal RFG is available and 
inexpensive and safe for its intended use. It does not impose any 
unique burden for California refiners. With the use of the complex 
model beginning this year, refiners indeed have numerous combinations 
they can utilize to meet the Federal standard which were not available 
several years ago when this legislation was first introduced. Most 
importantly, removing the oxygen requirement could result in a loss of 
air quality benefits. Amending the Clean Air Act would set a dangerous 
precedent for a nationwide undermining of what has been a successful 
program.
Legislative And Regulatory Background of Reformulated Gasoline
    The authors of the Clean Air Act Amendments of 1990 recognized the 
increasing impact that emissions from the combustion of fuels played in 
polluting our nation's cities. They also recognized the value of 
reformulating gasoline to burn cleaner. The provisions, which passed 
the House and Senate with significant bipartisan support, included a 
primary specification for clean burning oxygen content in gasoline. In 
particular, two oxygen specifications were included in the Act: 2.7 
percent (wt) for the control of carbon monoxide pollution during the 
winter months, the other at 2.0 percent (wt) to reduce harmful toxics 
year-round, and smog forming emissions in the summer high ozone season. 
The year-round program is commonly known as the Federal reformulated 
gasoline, or RFG program. It is important to note that although the Act 
specified the level of oxygen for these programs, it provided industry 
with flexibility to choose which fuel oxygenate to use. It allowed 
refiners to meet the standards through averaging, and provided for 
compliance flexibility by establishing performance standards.
    With the passage of the Act as the foundation, the United States 
Environmental Protection Agency (EPA) embarked on an extensive 
regulatory negotiation process that reconciled the interests of the 
refining, petrochemical, and automotive industries and the 
environmental community. This regulatory negotiation process resulted 
in the final guidance for the wintertime oxygenated fuel program and 
the final regulatory requirements for the Federal RFG program. Although 
both programs have set clean burning gasoline specifications to reduce 
emissions, today's reformulated gasolines contain many of the same 
ingredients as those found in conventional gasoline, only at more 
optimal levels.
Cleaner Burning Reformulated Gasoline Program Success
    We should all acknowledge that there is a lot we do not know about 
ozone formation. What we do know, however, is that RFG is working all 
over the country. Southern California enjoyed a 40 percent reduction in 
ozone exceedences the summer after RFG was introduced and last year 
experienced the cleanest summer on record. Phoenix opted into the 
program in 1997 and had the first exceedence-free ozone season in 10 
years. The presence of oxygenates in Federal RFG sold in California has 
yielded air quality and health benefits well in excess of the 
regulatory requirements. RFG may be providing some benefits we do not 
yet fully understand, and without such an understanding, it is 
impossible to guarantee the equivalency of a different recipe. For 
example, some of the models used to predict reductions not only fail to 
recognize offroad sources, which I will touch on in a moment, but may 
grossly underestimate the positive impact these fuels have on high 
emitters in the vehicle fleet. Failure to provide equivalency will only 
hurt the driving public and the small businesses which will have to 
make up the difference in achieving reductions in ozone and PM. When 
considering the success of the program, why make changes? The effects 
of allowing areas to use less than the RFG formula may not be cleaner 
fuels, cleaner air, or improved public health. Rather it will increase 
petroleum industry market share and provide more profits for some 
refiners.
    We have done a great deal of work with the States over the past 
several years as they struggle with fuel choices as part of their 
overall clean air strategies. Since RFG is achieving and even exceeding 
required reductions wherever it is being used, States know exactly what 
they are getting. It has been our experience that since RFG is a 
specified, non-negotiable formula it is exactly what they are looking 
for. The EPA approves it, the amount of reductions and credits are 
understood, and the Federal Government helps States regulate and 
enforce the program. All of those benefits are lost when a State-
prescribed performance fuel is adopted.
    The specter of a patchwork, mismatched quilt of fuel programs 
presents the potential for an environmental nightmare. Almost any oil 
company would concede that such pockets of designer fuels are likely to 
be much more expensive and many are on record saying just that. The 
uniformity of RFG and the fact it can be exchanged in the marketplace 
are key factors in keeping the price down. Without that uniformity, 
overall fuel quality suffers and you could wind up with fuels that meet 
the letter of the law for some pollutants but send others through the 
roof. The driving force in fuel specifications would be getting State 
Implementation Plan (SIP) credits rather than improving overall public 
health. The binding parameters of the RFG Program make the ground rules 
clear to everyone and air quality objectives are more likely to be met. 
This eliminates the chance of States tinkering with a localized program 
every year and allowing inferior fuels to be in the marketplace.
Widespread support for RFG
    The overall success of the RFG program has resulted in a broad base 
of support. Due to the mature market for RFG already in place, it is 
often possible to see RFG prices under conventional gasoline. Currently 
one-third of all U.S. gasoline, serving 80 million Americans, is RFG 
with oxygenates. The Department of Energy and the EPA have expressed 
strong support for the program and States continue to opt-in to the 
program, such as when Missouri recently elected to use RFG. In December 
1997, 12 States and the District of Columbia voluntarily elected to 
remain in the RFG program, including committing to the more stringent 
Phase II RFG requirements which will take effect in the year 2000. The 
benefits are not going unnoticed by other States. Just last week the 22 
member Governors' Ethanol Coalition wrote Missouri Governor Carnahan 
congratulating him for that decision. In that letter the Governors 
said, ``the Coalition is a strong supporter of this program that offers 
significant benefits to public health through improved air quality. In 
the 3-years since the inception of the Federal reformulated gasoline 
program, it has been successful in reducing excessive ozone levels at a 
cost of less than three cents per gallon over conventional gasoline.''
Fuel Oxygenates Enhance Energy Security and Reduce Crude Oil Imports
    In addition to potential negative impacts on air quality gains, 
there is another very important issue that should be considered--energy 
security and the diversity of supply. During the CAA deliberations 
there was considerable interest by Congress in marrying this program 
with our energy security programs and goals. By requiring oxygenates as 
a clean source of octane in lieu of aromatics, Congress was jump-
starting the market for ethanol, ETBE, and MTBE. Ethanol production in 
the U.S. increased 75 percent since the 1990 Clear Air Act. In addition 
to the direct displacement of gasoline, oxygenates further reduce 
imports by extending the volume of oil through increased gasoline 
yields. Refiners can get 1-2 percent more gasoline out of a barrel of 
oil by avoiding high end refining needed to reach high octane and add 
high octane oxygenates instead. This reduced processing requirement 
results in less stationary source emissions as well.
    The transportation sector in this country is over 95 percent 
reliant on petroleum based fuels. Over 50 percent of this petroleum is 
now coming from foreign sources. The U.S. Department of Energy projects 
the nation will continue this trend and reach 70 percent reliance on 
crude oil imports by 2010. Today, more than ever, the nation's reliance 
on imported oil jeopardizes our security and economy.
    Improved energy security was a factor in establishing the Federal 
formula and was reaffirmed in 1992 when the United States Congress 
recognized this threat and enacted the Energy Policy Act of 1992 
(EPACT). EPACT requires the Secretary of Energy to determine the 
technical and economic feasibility of replacing 10 percent of projected 
motor fuel consumption with non-petroleum alternative fuels by the year 
2000 and 30 percent by 2010. Oxygenates, which are contained in nearly 
half of our nation's gasoline, could continue to make a major 
contribution towards reaching these energy security goals. Without the 
Federal and California reformulated gasoline programs, a significant 
means of achieving this goal will be lost. The displacement of 
petroleum-based products achieved through the use of these clean air 
additives should not be overlooked. Most of our other national goals 
for alternative fuel use have not been meet, due in part to the massive 
task of retooling automobiles and establishing a new fuels 
infrastructure. Utilizing oxygenates in gasoline requires no such 
changes. The most definitive study to date on the impact of RFG on 
reducing imports was done last year by the General Accounting Office 
which found that more than 300,000 barrels of foreign oil were being 
displaced annually. As final note in this regard, as far back as 1992, 
the U.S. Alternative Fuels Council concluded that ``reformulated 
gasoline, as the carrier of alternative fuels, is the least costly, 
most efficient way to substantially introduce these alternative fuels 
in the United States.''
    To the extent that ethanol is used in RFG, particularly in ETBE,the 
potential environmental and energy security benefits may be even 
greater. I should also point out that the development of ethanol 
facilities in California, which currently look very promising, would be 
adversely affected by a removal of the oxygen specification. Along 
those same lines both the ethanol and MTBE industries have considerable 
capital investment in establishing sufficient supplies and 
infrastructure to meet the demand resulting from the Federal formula. 
Much of that would be at risk if oxygen were an ``optional'' component 
of RFG.
Concerns With the CARB Formula
    The first problem is the focus on the mass of emissions without 
regard to the level of toxicity or reactivity. Not all VOCs are alike 
in terms of toxicity or reactivity. Removing the oxygen standard could 
result in an increase of more carcinogenic compounds at the expense of 
less toxic ones and produce fuel that is more, rather than less, 
reactive -both because of an increase in the use of aromatics. A 
similar problem is almost certain to be true of fine particulates, or 
soot, which have just recently been the subject of new Federal air 
quality standards. We do not yet know precisely how motor fuels 
contribute to PM2.5, which makes relaxation of RFG all the 
more problematic.
    The second problem is the potential degradation of air quality from 
beyond just mobile sources. Off-road vehicles, small engines used in 
portable power equipment, and other non-regulated motors also use RFG 
and benefit from the oxygen content in the gasoline through reduced 
carbon monoxide emissions. These off-road sources are also estimated to 
be responsible for 10 or more percent of Volatile Organic Compounds 
(VOCs) in the emissions inventory nationwide according to DOT and EPA 
statistics. Both of these increases will ultimately tilt the playing 
field against the car manufacturers (and other stationary sources), 
which will have to make up the differences in terms of actually 
reducing ozone itself (rather than ``mass'' emissions) and 
PM2.5 as well.
Conclusion
    Throughout the development and implementation of these important 
Federal and State clean fuel programs, the petroleum refining industry 
has received a substantial amount of flexibility. Federal and State 
agencies have consulted the affected stakeholders and provided 
allowances to enable industry to deliver a complying product with the 
least amount of cost and disruption. In addition, after promulgation of 
the RFG program regulations, EPA responded to industry requests for 
additional flexibility by applying liberal interpretation to sections 
of the regulations pertaining to both modeling and in-use compliance.
    With the need and interest for additional air quality control 
measures on the rise, successful fuel quality strategies are the most 
immediate and cost-effective way to obtain valuable air quality 
benefits. The introduction of inferior seasonal substitutes such as 
simply lowering the volatility of gasoline has proven to be ineffective 
in the goal of reducing ground level ozone. Ultimately this could 
affect the ability of some areas to achieve air quality benefits and be 
a significant economic impediment to the economies of these areas.
    For all areas of the U.S., RFG with oxygenates remains a common 
sense, cost-effective means for both fuel and air quality improvement.
    I respectfully urge this committee to reflect on these comments in 
consideration of any legislation to alter this program. Such changes 
could result in a decrease in fuel supplies, reduced competition, lower 
fuel quality and driveability problems, and higher prices for the 
consumer.
    S. 1576 will not improve air quality, casts a dangerous precedent 
for other States in that it actually could degrade air quality and wipe 
out the tremendous strides that have been made to date.
    Mr. Chairman, thank you for this opportunity to testify on this 
important issue. I would also like to request that, in addition to this 
testimony, CFDC be allowed to provide information for the record in 
support of our comments.
                               __________
 Statement of Robert W. Gee, Assistant Secretary Office of Policy and 
               International Affairs Department of Energy
    Mr. Chairman, members of the committee, I am pleased to submit for 
the record this statement discussing the Federal reformulated gasoline 
(RFG) program and S. 1576, which would amend the Clean Air Act as it 
relates to the Federal RFG program in California.
    DOE has been actively involved in supporting the Environmental 
Protection Agency (EPA), since the passage of the Clean Air Act 
Amendments of 1990, in the development and implementation of the RFG 
program and in the analysis of its cost and benefits. Most recently, 
the Department of Energy:
      Conducted a reassessment of the cost-effectiveness of the 
Phase II nitrogen oxides (NOx) reduction requirements for RFG. This 
assessment was used by EPA as part of its basis for denying a petition 
to change the standards.
      Provided detailed comments to EPA recommending changes to 
the rules to limit State opt-outs from the Federal RFG program enabling 
refiners to avoid being put at risk by States withdrawing. at will. 
from the program.
      Provided analysis in support of EPA rules regarding 
foreign refiner gasoline quality baselines when those rules were 
challenged in the World Trade Organization (WTO). Subsequently, DOE 
provided additional analysis and comments to help guide the changes, in 
those rules, that were required to comply with the WTO ruling.
      Worked with EPA and the refining industry to make 
appropriate changes in the per gallon NOx reduction requirements that 
helped reduce the cost of RFG without compromising environmental 
quality.
      Last, DOE conducted a preliminary analysis of the 
investment requirements and cost for reducing sulfur levels in all 
gasoline.
    These recent activities are a continuation of DOE involvement with 
the RFG program that traces back to the Clean Air Act Amendments of 
199O, to the regulatory negotiation that laid the basis for the Federal 
RFG program? and to working with EPA and industry to help ensure a 
smooth program introduction on January 1, 1995. DOE has worked to help 
assure that the RFG program achieves its environmental goals while 
placing minimum burdens on consumers and avoiding, for reasons 
concerning energy security, any effect of reducing domestic refining 
capacity.
    When Congress passed the RFG program requirements, it intended to 
provide multiple benefits. For example. oxygenates are required 
throughout the year. not just in the high-ozone season. as part of the 
plan to gain a wide range of benefits through gasoline reformulation. 
The DOE believes these benefits, relating to both the environmental 
quality and supply of gasoline are important and suggests that all 
parties proceed very carefully in making any changes to the Clean Air 
Act that would affect this aspect of the program. S. 1576 would modify 
the Federal RFG requirements by allowing California State requirements 
to be the only requirements applicable to gasoline in that State. The 
most important of these changes, from our perspective, is the bill's 
effective elimination of the requirement for oxygenates in RFG and the 
likely consequences that such a change would have.
    In this context, I would first like to discuss issues related to 
how oxygenates affect the quality of gasoline. To the extent that this 
legislation would allow a reduction in the use of oxygenates, the 
benefits that oxygenates provide in the formulation of clean gasolines 
could be lost. Oxygenates provide primarily two fuel quality benefits:
    1) Oxygenates in reformulated gasoline contribute to a high quality 
gasoline that runs well and provides the octane levels consumers want 
while helping to reduce ozone forming emissions. DOE's analyses of 
Federal Phase 11 RFG performance requirements and other clean gasolines 
show that oxygenate use in general, and ethers like MTBE in particular, 
are economically attractive in formulating clean gasolines. even in the 
absence of an oxygenate requirement, because of their contribution to 
octane levels. distillation properties and dilution of undesirable 
components like sulfur and olefins. For example, a recently completed 
DOE analysis indicates that under the current economics of gasoline 
blending, if no oxygenates were required, two-thirds or more of the 
MTBE volume now used by east coast refiners in Phase II RFG would still 
be utilized. If oxygenate prices were cut for some reason by as little 
as a nickel per gallon, east coast refiners would not alter the volume 
of oxygenate use at all, because of the desirable properties of 
oxygenates relative to other possible blendstocks. Oxygenates would be 
the cost-effective source for the desired blendstock properties.
    2) Oxygenates also help reduce air toxic emissions from 
reformulated gasoline. Gasoline is a mixture of different hydrocarbons 
with varying properties including toxicity. To achieve reductions in 
gasoline's overall toxicity, refiners must reduce aromatic hydrocarbons 
(especially benzene). By itself, aromatics reductions would rob the 
gasoline of octane and volume. however'' oxygenates can restore octane 
and volume without refining more crude oil or making expensive refinery 
investments in new processing equipment. A detailed examination of 1996 
RFG and conventional gasoline quality data, as reported to EPA under 
the RFG reporting requirements, has shown benzene and toxic emission 
reductions in RFG that substantially exceed the program requirements. 
In fact, most of the RFG produced in 1996 exceeded the Phase 11 (year 
2000) requirements for toxic reductions. Some of this additional toxic 
reduction is directly attributable to the Clean Air Act requirement to 
use octane enhancing oxygenates, making it economically attractive for 
refiners to reduce aromatic and benzene levels.
    I would now like to turn to several issues related to oxygenates 
use and gasoline supplies. The United States has moved into a period 
where consumers' demand for gasoline is coming close to overtaking the 
U. S. refining system's capability to produce it, particularly during 
summer months. We should be very careful that actions taken in the area 
of reformulated gasoline do not have unintended consequences of 
reducing the future available supply of gasoline. I would like to make 
three specific points:
    1) From an energy security perspective, oxygenates provide a way to 
extend gasoline supplies. The transportation sector is almost totally 
dependent on oil. One of the few near-term options for reducing oil 
dependency is to expand our use of oxygenates. While it is true that 
some oxygenates are imported. a greater fraction of the oxygenates used 
in RFG is domestically produced than is the case for the oil used to 
produce the rest of the gasoline mixture. In addition. the Department 
is developing renewable oxygenate production technology that would not 
rely on any imported sources of energy. Nevertheless, even in the 
current market, oxygenate use in reformulated gasoline, which is 
primarily MTBE, saves over 200,000 barrels per day of oil use in the 
United States.
    The potential for future savings is much greater. Expanding the use 
of renewable energy sources is an important goal of our Comprehensive 
National Energy Strategy, which will be achieved in part through 
greater use of oxygenates derived from domestic renewable sources. 
Ethanol. now produced mainly from corn. has an important role in 
meeting the oxygenate requirements of the RFG. Over time we expect that 
ethanol used in clean gasolines will increase, and the expanded 
production of ethanol will be based on a technology that uses non-food 
cellulosic feedstocks. The Department is developing improved feedstock 
and conversion technology to provide an economically competitive source 
of renewable transportation fuels that produce low air emissions, 
require no foreign sources of energy, and have extremely low emissions 
of greenhouse gases. We believe that Congress wanted to encourage the 
renewable ethanol industry when the Clean Air Act Amendments were 
passed and we think that preserving this opportunity for renewables is 
important.
    2) A key supply related issue that needs to be considered when 
contemplating changing the very important part of total Californians' 
demand for automotive fuel, currently about 900.000 barrels per day. 
Outside of California, MTBE plays a less significant but nonetheless 
important role. About 150,000 barrels a day are used, most of it in 
Federal reformulated gasoline. For east coast refiners who make about 
60 percent of their gasoline reformulated with MTBE, this oxygenate 
also is important component of total gasoline volume, equal to the 
total gasoline output of a couple large refineries.
    Our data, shown in Figure 2, suggest that the California refineries 
could not significantly reduce oxygenate use during the peak gasoline 
season without adding additional refinery capacity. Figure 2 shows the 
refinery operation situation in California in the summer of 1997 when 
the whole country experienced strong gasoline demand and price 
increases, and through June 1998. The top gasoline producing refineries 
in the State were operating at, if not above, sustainable capacity 
during the summer of 1997 and at similar levels again in 1998. That 
high level of capacity utilization was with the high level of MTBE use 
that I just pointed out. Without the option of running more crude oil, 
the only options to reduce MTBE use, and still meet gasoline demand 
during the peak season. would be to import other gasoline blendstocks 
or finished gasoline or reduce the production of other products. 
Because of California's very stringent gasoline and diesel standards, 
strong demand for all transportation fuels, and long and expensive 
transportation links to other supply regions (like the U.S. Gulf 
Coast)? these options do not appear to be economically attractive. For 
all of these reasons, any reduction in California oxygenate use as a 
result of this bill is likely to be limited.
    In closing, I would like to point out that we recognize that the 
States have legitimate interests in this important public policy issue 
There is a danger. however, that S. 1576 could have a detrimental 
effect on the overall Federal RFG program and State gasoline quality 
regulations. While the immediate impact of this bill might be limited 
to gasoline regulation in California. it is clear that the States look 
to the Congress. which passed the Clean Air Act. for national 
leadership in this area. If an exemption were permitted for California, 
other States may also ask for legislation to modify Federal RFG 
requirements in their areas. In our opinion, this would result a 
significant impact on the environment, gasoline consumers, and the 
motor fuels industry--which has, in good faith, made investments to 
meet important environmental regulations that were originally called 
for by the Congress.




                               __________
Statement of Margo T. Oge, Director of Office of Mobile Sources, Office 
         of Air and Radiation, Environmental Protection Agency
    Thank you, Mr. Chairman and Members of the committee, for the 
invitation to provide a statement for the record for today's hearing. I 
am pleased to have this opportunity to share with the Committee the 
environmental benefits of the reformulated gasoline or RFG program, and 
to address issues raised by S. 1576, introduced by Senator Feinstein 
(D-CA).
    S. 1576 would potentially exempt California gasoline in the Federal 
RFG areas from the Federal RFG requirements, including the 2.0 percent 
oxygen Clean Air Act (CAA) requirement. The bill states that California 
fuel requirements would apply in lieu of the Federal requirements under 
section 211(k) of the CAA ``if [State] rules will achieve equivalent or 
greater emission reductions than would result from the application of 
the requirements'' under the Federal RFG program with regard to the 
aggregate mass of emissions of tonics and ozone-forming compounds.
    An understanding of the history of the Federal RFG program is 
important in order to put our views on S. 1576 in perspective. As you 
know, the Clean Air Act Amendments of 1990 included a number of 
requirements to lower the emissions from motor vehicles, including 
several fuels programs. The Clean Air Act achieved a delicate balance 
of vehicle and fuel emissions control programs only after extensive 
deliberations. The RFG requirements also emerged from the melding of 
several Congressional goals, including air quality improvements, 
enhanced energy security by extending the gasoline supply through the 
use of oxygenates, and encouraging the use of renewable energy sources.
    In 1991, EPA established a broad-based advisory committee to reach 
a consensus on the many issues involved in developing proposed rules 
for the reformulated gasoline program. This committee successfully 
reached a historic ``Agreement in Principle'' or ``Reg-Neg'' agreement 
on August 16, 1991. Representatives of Federal and State governments, 
various affected industries, and environmental groups signed on to key 
aspects of the programs. This agreement has resulted in a cost-
effective, highly successful program. One needs to be very cautious 
about initiating changes to the RFG program that could upset the 
balance of previous agreements that have led to the significant 
emissions reductions we are seeing today. Before any changes are made 
to the Clean Air Act, it is critical to assess the implications and 
consequences for the RFG and other air quality control programs.
    The Federal reformulated gasoline program introduced cleaner 
gasoline in January 1995 primarily to help reduce ozone levels. 
Unhealthful ozone levels are still of significant concern in this 
country, with over 60 areas still in nonattainment of the current ozone 
standard, and more expected to exceed the newly established, 8-hour 
ozone standard RFG is a cost-effective way to reduce ozone precursors 
such as volatile organic compounds (VOCs) and oxides of nitrogen (NOx), 
when compared to other air quality measures Phase II RFG, beginning in 
the year 2000, will reduce VOCs at an estimated average cost of $450 to 
$600 per ton and NOx at $3,500 to $4,000 per ton in 1997 dollars. The 
Federal RFG program is required in ten metropolitan areas which have 
the most serious ozone pollution levels. Three of these metropolitan 
areas are in California. Although not required to participate, areas in 
the Northeast, in Kentucky, Texas and Arizona that exceed the air 
quality standards for ozone elected to join, or ``opt-in'' to the RFG 
program as a cost-effective measure to help combat their pollution 
problems. At this time, approximately 30 percent of this country's 
gasoline consumption is reformulated gasoline.
    The RFG program reduces ground level ozone and toxic pollutants 
from vehicle tailpipe and evaporative emissions. The RFG program 
requires that gasoline contain 2.0 percent minimum oxygen content by 
weight. The first phase of the REG program, from 1995 through 1999, is 
reducing emissions of ozone-forming volatile organic compounds and 
tonics by 15 percent ' and beginning in 1998, NOx by 1.5 percent. This 
is equivalent to taking more than 7 million vehicles off the road. In 
the year 2000, the second phase of the RFG program will achieve even 
greater benefits: a 27 percent reduction in VOCs, 22 percent reduction 
in tonics, and 7 percent reduction in oxides of nitrogen emissions that 
also contribute to the formation of urban smog.
    We are often asked what ``real world'' evidence we have that the 
program is working We have analyzed data on the gasoline actually 
produced by refiners since the program began in 1995, and found that 
the RFG, on average, exceeded the requirements. Most notably, tonics 
reductions were about twice that required, with about a 30 percent 
reduction versus a 15 percent requirement.
    Ambient monitoring data from the first year of the RFG program also 
shows strong signs that RFG is working. Benzene levels in gasoline, 
which are controlled by RFG and are considered to be a strong indicator 
of motor vehicle emissions impact on air quality, showed the most 
dramatic declines with a median reduction of 38 percent. RFG areas also 
showed significant decreases in other vehicle-related VOC 
concentrations. EPA will continue to analyze ambient VOC and tonics 
data further and evaluate evidence of the environmental impacts of RFG.
    In light of the VOC, NOx, and air toxics reductions provided by 
RFG, the Governor of Missouri has recently requested to opt-in St. 
Louis to the Federal RFG program by June 1, 1999. The Governor has also 
indicated that he plans to request that RFG be supplied to Kansas City 
in the year 2000.
    S. 1576 raises the question of equivalency between California and 
Federal RFG and that raises complex scientific and /legal issues. In 
order to make a determination on the equivalency of the fuels, EPA 
would need to assess input from a wide variety of interested parties 
through a notice and comment rulemaking process.
    As I mentioned before, there are three Federal RFG areas in 
California. Under the Clean Air Act, California has unique authority to 
establish State requirements that control fuel and fuel additives for 
the purpose of motor vehicle emission control. The CAA allows 
California to specify an oxygenate or the level of oxygen content 
(e.g., no oxygen) where Federal RFG is not required. In the Federal RFG 
areas (Sacramento, Los Angeles, and San Diego), however, the gasoline 
must still contain a minimum of 2.0 percent oxygen. (Note that this 
does not preclude refiners supplying these areas with RFG that meets 
the stricter CA standards). The Agency provided California an exemption 
from a number of Federal Phase I RFG enforcement requirements. The 
enforcement exemptions have gone a long way to ensure that California 
refiners meeting California RFG requirements are not faced with 
overlapping and/or duplicate enforcement requirements. This was based 
on a comparison of California's RFG program with the Federal Phase 1 
program.
    Oxygenates help to reduce emissions of ozone precursors, air 
tonics, carbon monoxide, and particulate matter by diluting or 
displacing gasoline components such as olefins, aromatics, and sulfur 
and by altering distillation properties such as T50 and T90. Oxygenates 
also increase octane without the need to invest in refinery capital 
improvements, and can extend the gasoline supply through displacement 
of some gasoline components.
    For many refiners, if oxygenates were not used to produce RFG, 
levels of aromatics or olefins may have to be increased to provide 
octane. Both aromatics and olefins contribute to NOx and toxics 
formation, so refiners would have greater difficulty in meeting the RFG 
performance standards. Some level of oxygenate has historically been 
used by many refiners for octane purposes. Because the use of 
oxygenates by a refiner is often influenced by the volume of RFG 
produced, the amount of premium gasoline produced, refinery capability 
to produce other high octane blendstocks, and the price of purchased 
oxygenates, it would be important to ask individual refiners how they 
would meet RFG standards without the use of oxygenates.
    It should be noted that California refiners producing California 
RFG for markets outside of Federal RFG areas (e.g., San Francisco) are 
still using high levels of oxygenates (around 1.5 percent by weight or 
8.25 percent by volume MTBE) to meet summer California RFG standards 
(i.e., standards that do not include an oxygen requirement). We have no 
reason to believe that the use of oxygenates would decline 
substantially if the requirement were eliminated. This was recently 
confirmed by a Department of Energy (DOE) analysis. As noted in DOE's 
statement, ``if no oxygenates were required, two thirds or more of the 
MTBE volume now used by east coast refiners in Phase II RFG would still 
be utilized.'' Again, one needs to be cautious about changing the 
program's requirements where the benefit of doing so is not clear.
    EPA, like many others, is concerned about drinking water 
contamination in California by the oxygenate, methyl tertiary-butyl 
ether (MTBE), which is used in California RFG. MTBE has been detected 
in ground and surface water in various areas throughout the country 
which, in some incidents, are a source of drinking water. For the most 
part, detections in ground water and surface water have been quite low 
(below 20 parts per billion, the lower end of EPA's December 1997 MTBE 
drinking water advisory for taste and odor). For instance, the 
California Department of Health Services requires public drinking water 
systems to monitor their sources of water (e.g., wells, surface water 
bodies) for MTBE. As of August 1998, 0.5 percent of the groundwater and 
2.8 percent of the surface water sources sampled have detected MTBE 
above 5 ppb, the State's proposed secondary standard for taste and 
odor; MTBE detections at high concentrations in groundwater, such as 
those experienced in Santa Monica, result primarily from leaking 
underground fuel storage tanks, and possibly from distribution 
facilities.
    These leaks are unacceptable regardless of whether or not MTBE is 
present in the gasoline. The Agency's underground storage tank (UST) 
program is expected to substantially reduce future leaks of all fuels 
and its additives, including MTBE from underground fuel storage tanks. 
All USTs installed after December 1988 must meet EPA regulations for 
preventing leaks and spills. All USTs that were installed prior to 
December 1988 must be upgraded, closed, or replaced to meet these 
requirements by December 1998. In addition to regulations for 
preventing leaks, the EPA regulations have required leak detection 
methods to be in place for all USTs since 1993. For the upcoming 1998 
deadline, EPA recently issued its enforcement strategy which reinforced 
that after December 1998, it will be illegal to operate UST systems 
that are not equipped to protect against corrosion, spills and 
overfills. If EPA finds them in violation, the owners/operators will be 
subject to monetary penalties ($ 11,000 per day) for each violation 
throughout their period of non-compliance. Thus, EPA, State agencies 
and the fuels industry need to continue to work together to take 
appropriate measures to prevent fuel leaks from underground tanks and 
appropriately remediate those leaks that have already S. 1576 would not 
deal with concerns about fuel leaks from underground storage tanks, 
since oxygenates will continue to be used by refiners to meet emission 
standards and for octane purposes.
    In conclusion, EPA strongly supports the reformulated gasoline 
program, given the substantial benefits of this program in reducing 
ozone precursors and toxics. We believe that oxygenates provide a 
valuable tool to refiners in meeting the emissions reduction 
requirements and replacing octane lost in the reformulation process 
(e.g., sulfur, olefin and aromatic reductions). Given the complex and 
far-reaching issues that S. 1576 raises that have not yet been 
addressed, and the potential negative impacts of revisiting Clean Air 
Act provisions, EPA cannot support the bill at this time.,
    Thank you for the opportunity to discuss this important issue.
                               __________
            Statement of the American Bioenergy Association
              taking biomass energy into the 21st century
    I am Megan Smith, Director of the American Bioenergy Association. I 
wish to submit comments for the record regarding Sen. Feinstein's bill, 
S. 1576, regarding reformulated gasoline in California.
    I wanted to let the committee know that there is an exciting new 
industry about to emerge in California and across the U.S.: the 
conversion of biomass, or cellulose, to ethanol. In fact, there will be 
three biomass ethanol plants built in Northern California before 2000. 
The projects are:
      city of Gridley--will use waste from rice in the form of 
rice straw, alleviating open-field burning of straw which releases 
carcinogens and particulates in the form of PM10 into the 
air. This plant will also use forest/sawmill residues and will be 
coupled to an existing biomass power plant owned by Ogden Power.
      Sacramento Valley--a plant to be built by Arkenol, Inc., 
has already received permitting and will be converting rice straw as 
well using a different conversion method than the City of Gridley 
project.
      Plumas County--Collins Pine Company is planning to build 
a plant to rid of forest residues which are responsible for fuel 
loading and catastrophic fires in nearby forests; the plant will be 
sited by Collins' sawmill in Chester, CA, and will use sawmill residues 
as well.
    There is also a plant being built in Jennings, Louisiana, that will 
use sugar cane bagasse and rice hulls as its feedstock, and a plant in 
New York State that will use the paper component of municipal solid 
waste.
Background
    Biomass conversion to ethanol differs from the current starch-based 
ethanol industry in two ways:
      it is a much more cost-effective conversion process which 
will not require the ethanol tax incentive eventually (5-7 years 
approximately).
      it is a much more energy-efficient process, with 
estimates of up to three-fold increase over conversion of corn starch.
    The biomass ethanol industry and U.S. Department of Energy is 
working with the existing corn-based ethanol industry to increase their 
efficiency by converting their corn stover/fiber to ethanol as well. We 
hope to help bring the cost of corn ethanol down through increasing its 
efficiency.
    Not only will these biomass ethanol plants clean-up the air through 
reduction of air pollution from transportation fuels, but also by 
backing out pollutants associated with forest fires and open-field 
burning of agricultural crops such as rice straw. Eventually, we see 
conversion of the cellulose component of municipal solid waste (i.e., 
non-recyclable waste paper and yard trimmings) possible in California 
and across the U.S.
Sen. Feinstein's S. 1576:
    This legislation gives the oil companies an excuse not to use 
oxygenates such as ethanol in their gasoline formulation. Ethanol 
blended at 10 percent with gasoline (E10) has many benefits; it is:
      biodegradable, unlike MTBE; during human consumption, it 
breaks down in the liver and is essentially non-toxic in the quantities 
MTBE has been found in California drinking water.
      beneficial to many aspects of air quality; while some 
environmentalists are concerned with E10's increased RVP and associated 
increase in volatile organic compounds (VOCs), this problem could 
actually be alleviated by having the oil companies change their blend-
stock gasoline (to ``sub-RVP'' gasoline). Many feel that this is not as 
expensive to do as the oil companies assert, and may prove to be much 
cheaper than final litigation over MTBE claims.
      capable of backing out 10 percent or more of gasoline and 
associated toxics such as benzene which are now leaking out of 
underground storage tanks; again, ethanol is biodegradable.
    Mr. Chairman, if the goal of S. 1576 is to alleviate MTBE leakage 
into drinking water, then ABA feels that S. 1576 is not the correct 
vehicle to address the problem. It is the leaking of MTBE that is the 
problem, and not EPA's oxygenate program. We hope that the committee 
will seriously consider finding another vehicle to take care of the 
leakage of MTBE other than S. 1576. Otherwise, California, along with 
the rest of the United States, may not see the fruition of the emerging 
biomass ethanol industry that can alleviate many environmental problems 
as well as helping to clean up our air with the clean gasoline 
additive, ethanol.
    I hope that this brief overview for the committee is helpful. 
Please feel free to call me if you would like to discuss any further. 
We feel strongly that there is a future for biomass ethanol in the 
State of California and throughout the U.S.
    Mr. Chairman, thank you for your consideration.
            Sincerely,
                                  Megan S. Smith, Director,
                                    American Bioenergy Association.
                              Governor's Ethanol Coalition,
                                    Lincoln, NE, September 9, 1998.

    Honorable Mel Carnahan,
    Governor of Missouri,
    State Capitol Room 216,
    Jefferson City, Missouri 65101.

    Dear Governor Carnahan: Congratulations on your decision to 
participate in the Federal reformulated gasoline program. As you know, 
the Coalition is a strong supporter of this program that offers 
significant benefits to public health through improved air quality.
    In the 3-years since the inception of the Federal reformulated 
gasoline program, it has been successful in reducing excessive ozone 
levels at a cost of less than three cents per gallon over conventional 
gasoline. According to the United States Environmental Protection 
Agency, nearly 1.3 million tons of ozone-forming emissions will be 
prevented in the first phase of this program.
    In addition to the clean air benefit of reformulated gasoline, this 
program also helps us build a market for ethanol. Through establishing 
an increased oxygen level during the winter months, ethanol will have 
the ability to compete win other oxygenates. These requirements will 
help us build the infrastructure necessary to ensure ethanol's 
competitive ability.
    Once again, I would like to congratulate you on your decision to 
participate in the Federal reformulated gasoline program. It is my hope 
that the program will spawn the development of new ethanol facilities 
and help reduce dangerous ozone levels.
            Sincerely,
          Governor Frank O'Bannon, State of Indiana, Chair.
                               __________
       Statement of the National Marine Manufacturers Association
Summary
    The National Marine Manufacturers Association (NMMA) fully supports 
S. 1576. Senator Dianne Feinstein's important legislation amends the 
Clean Air Act to permit California's more stringent regulations for 
cleaner-burning gasoline to apply in the State rather than existing 
Federal regulations, as long as the California regulations continue to 
achieve equivalent or greater reductions in emissions. The bill would 
provide the much needed regulatory flexibility in the blending of 
cleaner-burning gasoline, without setting specific mandates on 
additives.
    NMMA understands that Congress was well-intentioned when it passed 
the 1990 Clean Air Act Amendments that mandated that reformulated 
gasoline in specified areas contain at least 2 percent oxygen by weight 
in gasoline year-round. However, given concerns that have arisen 
regarding the use of certain oxygenates, Congress needs to reconsider 
this mandate, Congress should set the standards necessary to ensure 
clean air for California's citizens, but allow California's regulators 
to determine how best to meet these standards, while allowing for 
flexibility for producers.
    By approving this bill, the committee will take an important step 
forward in restoring the public confidence in the safety of 
California's gasoline supply. Furthermore, the marine industry, whose 
end-users rely on the available fuel supply, are currently caught in 
the cross fire despite the millions of dollars invested to implement 
new, cleaner technologies.
    That is not to imply that the Federal Government should ignore 
environmental problems. Congress should continue to set the standards 
necessary to ensure clean air for all citizens and to hold the States 
to these standards. However, Congress should not mandate the course of 
how to meet these standards. California's regulatory agencies are fully 
capable of protecting the environment. California's RFG program is 
California's responsibility and the State deserves regulatory 
flexibility.
                                 ______
                                 
supplemental statement by the national marine manufacturers association
    NMMA fully supports S. 1576. Senator Dianne Feinstein's important 
legislation amends the Clean Air Act to permit California's more 
stringent regulations for cleaner-burning gasoline to apply in the 
State in lieu of existing Federal regulations, as long as the 
California regulations continue to achieve equivalent or greater 
reductions in emissions. The bill would provide California petroleum 
refiners and marketers with the much needed regulatory flexibility in 
the blending of cleaner-burning gasoline, without mandating specific 
additives.
    Historically, California has faced the most challenging air 
pollution problems in the nation, and consequently is the only State 
allowed by the Federal Clean Air Act to develop and operate its own 
fuels program. NMMA understands that Congress was well-intentioned when 
it passed the 1990 Clean Air Act Amendments mandating that reformulated 
gasoline in specified areas contain at least 2 percent oxygen by weight 
in gasoline year-round. However, given current concerns that have 
arisen regarding specific oxygenates, Congress needs to reconsider this 
mandate. Congress should set the standards necessary to ensure clean 
air for California's citizens, but allow California's regulators to 
determine how best to meet these standards, while allowing flexibility 
for producers.
Marine Engine Industry has Worked with the EPA and CARB to Develop 
        Cleaner Engines
    While environmental issues will likely present the industry's most 
significant challenges for years to come, member companies of the NMMA-
affiliated Association of Marine Engine Manufacturers (AMEM), are 
seizing the chance to turn environmental demands into opportunity. When 
the EPA determined that all averaged non-road sources equal 10 percent 
of hydrocarbon emissions, NMMA members worked to develop new, cleaner 
burning engines. At the time, EPA determined that all recreational 
marine engines contribute only 3 percent of all the emissions in the 
U.S.
    Since the marine engine industry began working with the EPA in 1991 
on creating a plan to reduce overall hydrocarbon emissions, 
manufacturers have already funded major initiatives to develop new 
generation engines which are both environmentally responsive and 
consumer friendly. In 1996, the EPA established the first-ever emission 
standards for spark-ignited gasoline recreational marine engines. These 
standards became effective January of this year and will be phased in 
over a 9-year period.
    Research and development investment by engine manufacturers--
creating entirely new lines of products--will amount to an estimated 
$500 million. These improved engine lines will consist of a mix of 
four-stroke and various forms of direct injection two-stroke outboards. 
Gasoline sterndrive and inboard engines have adapted and added 
electronic fuel injection systems to achieve operational and efficiency 
gains and resulting decreased emissions. Attached are answers to 
frequently asked questions about the new technology engines and water 
quality that were compiled by Californians United to Save Boating.
    NMMA and technical and regulatory specialists from its member 
companies are now assisting the State of California in the assembly of 
technical and marketing information that will help provide baseline 
data for the California Air Resources Board (CARB), working in 
collaboration with State water authorities, to develop new and more 
stringent emission standards for recreational marine engines. The 
marine industry understands that California will demand compliance 
performance from all recreational engines and on the fastest feasible 
timetable America's marine engine manufacturers have great confidence 
in the technical capability of the new engine designs being introduced, 
and because it is in the best interest of engine and boat manufacturers 
to have these new technologies penetrate the market as rapidly as 
possible, the marine engine industry will continue to extend every 
cooperation to CARB as it and other agencies develop new technical 
emission standards and a timetable for implementation.
The Federal Oxygenate Requirement Has Unintended Consequences
    In the past several months, public concern about MTBE has spurred 
several California water districts to consider banning boating on some 
public waters that serve as drinking water reservoirs. The leading 
source of MTBE entering water supplies, however, is leaking underground 
storage tanks. Marine engines do discharge negligible amounts of 
gasoline into the water as part of the combustion process. With this in 
mind, the marine engine industry has been developing cleaner, new 
technology engines that have already started to arrive in the 
marketplace. Over the past several months, the marine industry has 
worked to educate California's water districts about the arrival of 
these new technologies.
    Unwarranted public concern about California's Reformulated Gasoline 
(RFG) may lead to limits or bans on recreational boating, despite the 
introduction of dramatically improved marine engine technologies 
described earlier. In fact, legislation was introduced in the 
California State Assembly that would have banned the retail sale and 
use of all 2-cycle engines from all of California's lakes due to public 
concern about MTBE. While the Assembly did not pass the bill, the 
marine industry believes that the lack of regulatory flexibility in the 
California RFG program could jeopardize the marine engine industry's 
substantial and continuing investment in new technologies that would be 
better for the environment.
Economic Impact of Boat Bans
    Boating may seem like a weekend hobby, but the industry represents 
a significant portion of California's economy. According to a report by 
the California Department of Boating and Waterways, boating contributed 
$1 I billion to the gross State product in 1995. Over 183,000 jobs were 
attributable to recreational boating in California and the State and 
local taxes collected as a result of recreational boating totaled $568 
million in 1995.
    The boating industry has special reason to be concerned about water 
quality. When developing the marine engine rule, the EPA found in its 
Regulatory Impact Analysis that boat dealerships, marina operators and 
other small businesses are very sensitive to changes in the economy and 
the ecosystem. Over 60 percent of all boaters fish, and declining 
fisheries, which may be due in part to declining water quality, will 
negatively impact consumer confidence and, therefore, will negatively 
impact local businesses.
Consequences Beyond California
    With over 880,000 registered boats, California has more 
recreational boaters than any State except for Michigan. If boaters in 
California continue to be threatened with bans, the demand for boats 
will decline. This will have a great impact on communities in States 
like Rhode Island, Florida, Michigan, Illinois, Wisconsin and North 
Carolina that have large boat building plants and related businesses. 
Reduced outboard and personal watercraft sales will result in increased 
prices, which will in turn, result in consumers having less money to 
spend on marine accessory products. Employment will likely be affected 
for those manufacturers who produce, distribute and sell accessory 
marine products.
    The boating industry is extremely affected by price points. To 
illustrate how sensitive to the marine industry is to economic changes, 
in the early 1990's, the imposition of the 10 percent ``luxury tax'' on 
boats costing over $100,000 resulted in a loss of over 25,000 U.S. 
jobs, thousands of boat dealerships and ancillary small supporting 
businesses, and millions of dollars for both the marine industry and 
the local economies that rely on the tax revenue that the marine 
industry provides.
Conclusion
    Congress was well meaning when it developed California's RFG 
program with the 2-percent oxygenate mandate. Indeed, California has 
experienced a dramatic improvement in its air quality as a result of 
this Federal concern. However, sometimes technology development 
outpaces the law, and it seems time for the Federal Government to 
recognize that California's regulatory agencies are fully capable of 
protecting the environment.
    By approving this bill, the subcommittee will take an important 
step forward in restoring the public confidence that has been shaken by 
the potential effects of the mandated product. Furthermore, industries 
like the marine industry, whose end-users rely on the available fuel 
supply are caught in the cross fire, despite the millions of dollars 
invested to implement new, cleaner technologies.
    That is not to imply that the Federal Government should ignore 
environmental problems. Congress should continue to set the standards 
necessary to ensure clean air and water for all citizens and to hold 
the States to these standards. However, Congress should not mandate the 
course of how to meet these standards. This is California's 
responsibility and should be their choice.
                               __________
            Statement of Californians United to Save Boating
   frequently asked questions--recreational boating and water quality
    1. What is a ``new technology marine engine'. and how is it 
different from existing marine engine technologies''
      The term ``new technology'' was coined by the U.S. 
Environmental Protection Agency (EPA) and refers to the new direct-
injection two-stroke technology, four-stroke technology, or other 
technology used to reduce emissions.
      Direct-injection two-strokes, like OMC's FICHT outboards 
and Mercury Slarine's OptiMax outboards, have greatly reduced 
hydrocarbon emissions as well as greatly improved fuel efficiency and 
operating characteristics.
      Four-stroke engines are another low-emission high-fuel 
efficiency alternative.

    2. How clean are direct-injection two-stroke and four-stroke 
technologies and how does their fuel efficiency compare?
      Both two-stroke and four-stroke engines achieve greater 
than 80 percent reductions in hydrocarbon emissions as compared with 
conventional two-stroke engines.
      The fuel efficient of direct-injection he two-stroke and 
four-stroke technologies on average is 30 percent better than 
conventional marine engine technologies.

    3. I've heard that four-stroke engines have lower hydrocarbon 
emissions than direct-injection two-stroke engines. Is this true and if 
so, why?
      Emission testing of similar powered engines (where both 
direct injection two-stroke and four-stroke technology are used) has 
shown that the direct-injection two-stroke engines have slightly higher 
hydrocarbon emissions. However. manufacturers believe that because 
direct-injection two-strokes are a brand of new technology, they are 
expected to greatly improve as future development is encouraged.
      Four-stroke engine technology has been in production for 
decades.

    4. Do direct-injection two-stroke engines use oil and does it get 
into the water? Do four-stroke engines?
      Direct-injection two-stroke engines are equipped with oil 
injection systems that precisely meter just enough oil to ensure 
reliable operation.
      Most of the oil is burned during the combustion process 
and only a small amount of oil is present in the exhaust.
      Four-stroke engines have lubrication sumps that contain 
oil and must be changed periodically like a car engine.

    5. How much unburned fuel is actually getting into the water from 
existing technology two-stroke outboards and personal watercraft 
(PWC's)?
      California water district studies continue to show that 
the amount is very small. Recent data from East Bay Municipal Utility 
District (EBB) and Metropolitan Water District (MWD) indicates that 
benzene, ethyl benzene, toluene and xylene. (gasoline compounds of 
concern) are nearly undetectable. Some of the gasoline additive MTBE 
has shown up in areas of high boating, prompting some water districts 
to consider varying management practices on their reservoirs. The 
results continue to show that recreational boating does not constitute 
a threat to California's drinking water supplies.

    6. What engines are currently powered by the different 
technologies? What does the future hold?
      Direct-injection two-stroke engines have been introduced 
first in the high horsepower range and are expected to move down the 
power range to below 20 horsepower.
      Four-stroke engines have been introduced in the low 
horsepower range and currently are somewhat limited in their ability to 
move up through the highest horsepower ranges due to their size and 
weight.

    7. Can a customer upgrade an existing technology two-stroke engine 
to a new technology two-stroke engine?
      No. The new technology systems are extensive and designed 
as complete systems. They cannot be treated as simple bolt-one.

    8. Do the new technology engines exhaust any unburned fuel into the 
water?
      New technology two-and four-stroke engines trap all 
incoming fuel in the combustion chamber and expose it to the combustion 
process.
      This ensures that the fuel is efficiently burned in the 
combustion process.
      Due to the fact that no combustion system can be 100 
percent efficient, very small amounts of hydrocarbons are exhausted 
from the new technology two-stroke and four-stroke engines.

    9. How many gallons of unburned fuel are exhausted per day during 
the operation of an existing technology two-stroke engine?
      A 50 horsepower engine operated for 4 hours during a full 
day of fishing will consume roughly eight gallons of gasoline. As a 
result, several ounces of fuel will be initially transferred to the 
water. This small amount immediately will begin to vaporize and 
biodegrade. It will be difficult to detect any presence of gasoline 
within a very short period.

    10. How do personal watercraft emissions compare to outboard 
emissions?
      There are two things we need to look at to answer this 
question. First, we need to recognize that personal watercraft engines 
are physically smaller than outboard engines of the same horsepower. 
This requires the engine to operate at higher speeds resulting in 
higher emissions. The second reason for higher emissions from personal 
watercraft is that they generally are operated closer to full throttle, 
resulting in a greater amount of exhaust emissions.

    11. How can water reservoir managers distinguish between existing 
and new technology engines?
      Four-stroke engines and direct-injection two-stroke 
engines are both new technologies and generally are identified by their 
motor cover decals.
      The National Marine Manufacturers Association (NMMA) also 
is investigating ways to provide more obvious identification of the 
existing and new technologies.

    12. Why do we need both two-stroke and four-stroke technologies?
      A variety of boat designs use outboards. The performance 
characteristics of these new technology engines are different and one 
is better suited to a given application, addressing the consumers needs 
for weight, portability, acceleration and quiet operation.

    13. Is it accurate to say that using an existing technology two-
stroke engine is the same as pouring raw gas in the water?''
      Absolutely not. Although the exhaust of a conventional 
two-stroke outboard or personal watercraft contains some unburned fuel, 
it is at a temperature of several hundred degrees and is expelled in a 
narrow trail of exhaust behind the boat as it travels through the 
water. As this ``tail'' of exhaust leaves the hub of the propeller, it 
quickly rises to the surface where it is released into the atmosphere. 
Furthermore, at idle and off idle conditions, outboard motors are 
designed to emit exhaust through their ``exhaust relief system'' above 
the water. Under these operating conditions, they discharge little or 
no exhaust into the water.
      Several studies, conducted for the U.S. EPA in the 
1970's, attempted to quantify the amount of hydrocarbons deposited into 
the water by conventional two-stroke outboard motors. Because of 
experimental difficulties associated with these types of tests, the 
results of these studies vary. They all indicate, however, that only a 
fraction of the gasoline used by the engine (somewhat between one-to-
ten percent) is deposited in the water, and that small amount of 
gasoline immediately begins to volatilize from the water into the air.
      The scientific data clearly indicates that although 10-25 
percent of the fuel consumed by an outboard bypasses the combustion 
process and exits the exhaust, only a fraction goes into the water. 
Trying to characterize unburned gasoline discharges from the operation 
of an outboard or personal watercraft as dumping liquid gasoline into 
the water is not only unfair and misleading, but scientifically 
incorrect.

    14. Some people compare existing technology two-stroke marine 
engine hydrocarbon emissions with the oil spilled from the Exxon 
Valdez. Is this true?
      No. Unfortunately, this ``junk science'' promoted by a 
few extreme environmentalists has misled the public. If the concept 
behind this exaggeration were credible, then California water district 
analysis would be showing high levels of benzene, ethyl benzene, 
toluene and xylene (BETX) compounds and other components of gasoline.
      The fact is that the material discharged from the tragic 
Exxon Valdez disaster was a concentrated spill of liquid non-volatile 
heavy crude oil into a relatively small area of water. This spill was 
incapable of significant volatilization, and was so concentrated that 
it overwhelmed nature's ability to biodegrade it. This is totally 
different than the relatively small amount of hot exhaust and gasoline 
vapors that quickly pass through the water and are released into the 
atmosphere behind conventional outboard motors.
                               __________
             Statement of the Oxygenated Fuels Association
    This is a statement for the record submitted by the Oxygenated 
Fuels Association (OFA) to the Committee on Environment & Public Works 
of the U.S. Senate with respect to the September 16, 1998 hearing 
concerning reformulated gasoline (RFG), methyl tertiary butyl ether 
(MTBE), and S. 1576. OFA appreciates this opportunity to present its 
views on these issues of vital interest to the oxygenated fuels 
industry.
    OFA is a national and international trade association established 
in 1983 to advance knowledge about the use of oxygenated fuel 
components of gasoline. These additives not only improve the combustion 
performance of motor vehicle fuels, thereby significantly reducing 
automotive emissions and air pollution, but also replace or dilute many 
of the toxic compounds historically associated with gasoline emissions.
The Attributes and Environmental Benefits of MTBE
    OFA member companies produce and market significant quantities of 
the oxygenated fuel components used in reformulated gasoline (RFG), 
wintertime oxyfuels, and California's cleaner-burning gasoline (CBG). 
MTBE, the oxygenate of choice, both in California and nationwide, is 
the prime pollution fighting component in cleaner-burning CBG and RFG.
    The refining industry has been using oxygenates in gasoline for 
nearly 30 years. Oxygenates serve as both a high octane replacement for 
toxic lead and aromatic compounds in premium gasoline, as well as a 
non-petroleum energy alternative for expanding supplies of 
transportation fuels. Oxygenates, such as MTBE, have been used as 
octane enhancers in the U.S. since 1979. The environmental benefits of 
oxygenates were first recognized in state-developed ``clean fuel'' 
programs as early as 1987, and then nationally acknowledged for their 
clean burning benefits in the Clean Air Act Amendments of 1990. As 
such, oxygenates are not new or unfamiliar gasoline compounds in the 
marketplace.
    RFG is sold year-round in about 32 percent of the U.S. gasoline 
market throughout 17 States with the worst air pollution problems. The 
U.S. Environmental Protection Agency (EPA) estimates that since its 
introduction in January 1995, RFG has eliminated approximately 300 
million tons of pollution from the nation's atmosphere. In California, 
reductions in vehicle emissions of volatile organic compounds, nitrogen 
oxide, sulfur dioxide, and carbon monoxide due to cleaner-burning 
gasoline are equivalent to the removal of 3.5 million vehicles from the 
State's roads. In addition, California residents' exposure to highly 
toxic benzene from vehicle emissions has been reduced by 40 to 50 
percent by the use of CBG with oxygenates.
    California's cleaner-burning gasoline is the world's cleanest 
gasoline. The citizens of California now enjoy the best air quality in 
decades because of cleaner-burning gasoline. In an October 1997 report 
entitled Cleaner-Burning Gasoline: An Assessment of Its Impact on Ozone 
Air Quality in California, the California Air Resources Board (CARB) 
examined the improvements in ozone air quality in three major areas of 
the State--the South Coast Air Basin, the Sacramento Metropolitan Area, 
and the San Francisco Bay Area. After factoring in control strategies 
for emissions from sources other than vehicles and for meteorology, 
CARB found that cleaner-burning gasoline, with MTBE as its principal 
pollution fighting additive, is directly responsible for an 11 percent 
improvement in air quality in the South Coast Air Basin and a 12 
percent improvement in the Sacramento Area. In addition, CARB credits 
the State's clean gasoline program for reducing the public's exposure 
to cancer risk by 40 percent.
    MTBE was first commercially used in Europe in 1973. It has been 
used in the United States since 1979 and in California since 1986. It 
is widely used as an octane enhancer and cleaner-burning octane 
alternative to lead and aromatics and is now the principal pollution-
fighting ingredient in CBG and RFG. Because of its effectiveness in 
improving air quality, refinery operating requirements, state-of-the-
art blending practices, ease of supply and distribution and basic 
marketplace economics, MTBE is the oxygenate of choice for most areas 
requiring RFG, comprising approximately 80 percent of the nationwide 
market for oxygenates. In California, MTBE is used in over 90 percent 
of CBG.
    MTBE has been extensively studied for its impact on vehicle 
performance and air quality benefits. These studies have concluded that 
MTBE is effective and safe for use in gasoline. MTBE not only helps 
reduce toxic and ozone related emissions from reformulated gasolines, 
but has contributed to lower emissions of many criteria pollutants such 
as carbon monoxide, nitrogen oxide, sulfur dioxide, fine particulate, 
and lead.
Health Effects and Benefits of MTBE
    MTBE has also been studied extensively for its health effects. The 
Office of Science and Technology Policy (OSTP), in its Interagency 
Assessment of Oxygenated Fuels Report, concluded that chronic, non-
cancer health effects would not likely occur from environmental or 
occupational exposures to MTBE. In a review of the OSTP report the 
National Academy of Sciences concluded that MTBE would ``not to pose a 
substantial human health risk.'' Likewise, the Health Effects Institute 
has determined that ``adding oxygenates is unlikely to substantially 
increase the health risks associated with fuel used in motor vehicles; 
hence, the potential health risks of oxygenates are not sufficient to 
warrant an immediate reduction in oxygenate use at this time.''
    The European Centre for Ecotoxicology and Toxicology of Chemicals 
has concluded that ``MTBE is not carcinogenic according to the criteria 
set forth in the European Union's Directive on Dangerous Substances'' 
and that ``the risk characterization for MTBE does not indicate concern 
for human health with regard to current occupational and consumer 
exposures.''
    The recent comparative health risk analysis conducted by the 
Northeast States for Coordinated Air Use Management (NESCAUM) concluded 
that Phase I Federal RFG (which contains MTBE) ``. . . served to reduce 
the cancer risk associated with gasoline vapors and automobile exhaust 
compared to conventional gasoline by 12 percent.'' Additionally, the 
same study indicated that Phase II Federal RFG ``. . . is expected to 
further reduce the public cancer risk . . . as compared to conventional 
gasoline by 20 percent.''
    The fact is, MTBE is one of the most studied compounds ever to be 
introduced into modern commerce. No fewer than 80 health studies have 
been completed to date, which collectively demonstrate that MTBE is not 
harmful when used for its intended purposes as an anti-pollution 
additive in gasoline.
    The use of cleaner-burning gasoline that contains oxygenates like 
MTBE under the Federal RFG and the California CBG programs has achieved 
significant reductions in vehicle emissions that led to improved air 
quality and public health protection. These programs have lead to at 
least an 11 percent decrease in ozone exceedences in RFG areas, 15 
percent decrease in summer VOC evaporative emissions, 7 percent 
decrease in total VOC emissions, 3 percent reduction in NOx levels, 25 
percent reduction in air tonics such as benzene (at least 50 percent in 
California), 10 percent decrease in carbon monoxide (for wintertime 
oxyfuels areas), and 11 percent reduction of sulfur dioxide and 9 
percent decrease in precursors of secondary particulate matter from 
vehicle emissions. These achievements have clearly met, or exceeded, 
the objectives of Congress in enacting the RFG with oxygenates program.
The Presence of MTBE in Drinking Water
    A great deal of concern has been expressed over recent discoveries 
of MTBE and other gasoline components which have been detected in 
drinking water sources--both groundwater aquifers and surface water 
bodies. The members of OFA share this concern and believe that neither 
MTBE, nor the many other chemical components of gasoline, should be 
present in the groundwater or surface water.
    To properly address the problem of MTBE in drinking water, it is 
important to understand two fundamental things. First, when MTBE is 
detected in a water supply, it is most likely the result of gasoline 
releases. MTBE is not alone. The presence of MTBE is a signal that 
other more toxic gasoline components, such as the known human 
carcinogen benzene, have also been released into the water. Second, use 
of MTBE in gasoline is not the cause of the problem of MTBE and other 
gasoline components in water supplies.
    Releases and leaks from underground storage tanks and pipelines are 
the main causes of MTBE and other gasoline components entering 
groundwater sources. Discharges of unburned fuel are the primary cause 
of MTBE and other gasoline components in surface water bodies. To 
ensure that MTBE and other gasoline components do not contaminate 
drinking water supplies, we must ensure that these releases, leaks and 
discharges do not occur and, should such events occur, clean-up and 
restoration should be promptly and effectively carried out.
    Proposals to phaseout or ban MTBE will not solve the problem of 
water contaminated by gasoline. Reducing the level of or eliminating 
MTBE will not reduce the number of releases or leaks from underground 
storage tanks and pipelines, nor will it reduce the amount of unburned 
fuel that is discharged by marine engines into surface water bodies.
    Statements have been made suggesting that the ``corrosive'' nature 
of MTBE is the main cause for the failure of underground storage tanks 
and thus responsible for the leakage of gasoline into certain ground 
water resources. A number of studies have concluded that these 
statements are without merit. A study prepared by James M. Davidson of 
Alpine Environmental, Inc. entitled MTBE Compatibility with Underground 
Storage Tank Systems concluded that MTBE is compatible with underground 
storage tanks and piping made from fiberglass; that the industry 
standard seals used on tanks and pipelines were compatible with the 
maximum MTBE concentrations allowed by law in gasoline (i.e. 15 volume 
percent MTBE); and that there was no scientific basis to support claims 
that MTBE was incompatible with glues used in fiberglass underground 
storage tank systems or vapor recovery systems.
    The response to the problem of MTBE and gasoline in water supplies 
must be directed at the source of the problem--it must be directed at 
replacing old leaking underground tanks, upgrading underground tank and 
pipeline systems, improving leak monitoring and detection programs, and 
responding rapidly to releases that do occur. The State of California 
has taken a number of steps to fund efforts in this direction and OFA 
strongly supports these steps.
The Feinstein Legislation--S. 1576
    OFA is opposed to S. 1576. OFA members believe that the main 
outcome of this legislation would be to allow the major oil companies 
to circumvent the Federal clean fuel specification for using oxygenates 
under the guise of more flexibility. Removing oxygenates will not 
result in cleaner air and could potentially lead to dirtier air. 
Repealing the oxygenate standard will also undermine many of the social 
and economic benefits of the RFG and CBG program. Most of all, 
enactment of this legislation will set a negative precedent by 
undermining the Clean Air Act (CAA) for the economic benefit of a 
single interest group.
    One of the arguments made in support of S. 1576 is that the 
overlapping requirements of the Federal RFG program and CARB's CBG 
program limit the refiners' flexibility to make cleaner-burning fuels. 
In addition, it is claimed that this inflexibility leads to higher 
costs for the refiners and ultimately the public. EPA has addressed 
many of the refining industry requests for additional flexibility over 
the last 2 years by applying a liberal interpretation of sections of 
the regulations pertaining to both modeling and in-use compliance. In 
fact, EPA is preparing to codify many of these changes which provide 
additional flexibility to all refiners in the overlapping areas.
    OFA members also are opposed to S. 1576 because of the economic 
impact it would have. The oxygenate industry has invested billions of 
dollars in capital expenditures to meet the requirements of the CAA for 
California. To arbitrarily change those requirements at this point, 
before much of that investment is recaptured is simply unfair and 
unwarranted, particularly when this legislation will benefit a few 
large petroleum companies at the expense of all other market 
participants. Smaller refiners may be disadvantaged by the passage of 
S. 1576, since unfavorable economies of scale significantly raise the 
cost of clean fuel alternatives to small refiners preventing them from 
taking advantage of the other non-oxygenated alternatives that are 
generally available to the large oil companies.
    The major assumption underlying S. 1576 is equivalency--that CARB's 
predictive model and CBG regulations will provide the same or greater 
emission reductions and overall environmental benefits as a fuel, which 
meets the RFG oxygen specifications of the CAA. One supporter of this 
legislation, CARE, stated that ``The Federal oxygen rule prevents 
(those refiners) from selling the Northern California gasoline with 
reduced or no oxygenates in Southern California, even though the 
Northern California gasoline provides twice the clean air benefits 
required by the Federal Government.'' This statement leaves the 
impression that Northern California gasoline is cleaner than Southern 
California gasoline. This is not true. Southern California gasoline 
with oxygenates is cleaner than Northern California gasoline and is 
more than twice as clean as Federal RFG.
    The real issue is the backsliding of air quality. It is imperative 
that non-attainment areas in Southern California not lose the air 
quality benefits they have achieved with oxygenated CBG. Yes, these 
benefits are greater than the Federal standard but why would the State 
go back to just meeting the standard when they now have in place 
gasoline that is much cleaner than the standard.
    CARB's own data demonstrates that Southern California gasoline--CBG 
plus oxygenates--is significantly more effective in reducing emissions 
than CBG alone. Blending oxygenates into gasoline displaces less 
environmentally beneficial components such as aromatics which in turn 
results in additional health benefits and a cleaner-burning gasoline.
    Unfortunately, CARB's predictive model and CBG regulations are 
unlikely to ensure such a result. The model and regulations are so 
narrowly focused on tailpipe emissions of volatile organic compounds, 
nitrogen oxides and toxics coming from highway vehicles that they 
ignore the many other emission reduction benefits from the use of 
oxygenates. Removing the oxygen requirement will allow refiners to 
replace cleaner-burning oxygenates with less environmentally beneficial 
components such as aromatics and still satisfy the CBG regulations and 
the predictive model. However, the higher boiling temperatures and 
higher carbon content of such fuel components are more difficult to 
vaporize and bum under some engine conditions. In this case, replacing 
oxygenates in CBG will lead to higher emissions of carbon monoxide and 
fine particulate in the form of secondary aerosols. It will also 
contribute to greater emission deterioration over a vehicle's useful 
life by allowing increased deposit buildup in the combustion chamber of 
the engine. In addition, replacing the oxygenates with the higher 
carbon components will contribute to higher carbon dioxide emissions.
    Another problem with CARB's predictive model is that it does not 
apply to emissions from non-highway or non-automotive engines such as 
farm equipment, lawn mowers, and leaf blowers. These non-automotive 
engines represent over 10 percent of the volatile organic compound 
emissions in the State of California. Due to the lack of sophisticated 
controls and catalyst systems in these smaller, simple carbureted 
engines, oxygen in the fuel used by these engines provides a 
substantial combustion benefit that is not duplicated by any other fuel 
properties in CBG. Therefore, emissions from these non-highway mobile 
sources will only increase under the provisions of this legislation.
    The way in which one defines ``equivalency'' is of paramount 
importance in evaluating the merits of S. 1576. OFA believes that 
equivalency should be defined as no ``back-sliding'' from air quality 
conditions that currently are being achieved in the RFG areas of 
California. The fact is, the use of CBG plus oxygenates is providing 
emission reductions significantly in excess of the requirements of the 
CAA, the CARB predictive model and the CBG regulations. We should not 
sacrifice these enhanced emission reductions by defining equivalency 
according to what meets the CARB predictive model and the CBG 
regulations.
    Finally, this committee must be sensitive to the effect this 
enactment of S. 1576 will have on the fabric of the CAA and its 
programs. Proponents argue that the bill is limited only to California 
and therefore it will have no effect on the CAA or the national RFG 
program. The fallacy of this argument was vividly demonstrated at the 
committee's hearing when Commissioner Sullivan of Maine stated that 
Maine also would like to take advantage of the flexibility provided by 
S. 1576. It is interesting to note that Maine voluntarily subjected 
itself to the oxygenate requirements of the RFG program when the 
Governor choose to opt-in to RFG. Under the CAA, Maine already has the 
flexibility to opt-out of the RFG program if they can meet the 
requirements of their ozone plan without RFG. Commissioner Sullivan's 
statement is most likely an indication of how other States will react 
to enactment of S. 1576.
The Future of MTBE
    The actions that the Committee on Environment and Public Works 
might take with respect to the Clean Air Act, the RFG program, and MTBE 
will be critical to the role that MTBE and other oxygenates play in our 
nation's efforts to improve and maintain air quality in the future. In 
determining its actions, this committee should be guided by the 
following facts:

    1. CBG plus oxygenates and RFG are responsible for massive 
reductions in harmful air pollution from mobile sources in California 
and the nation.
    2. Maintaining and improving air quality will be nearly impossible 
without CBG and RFG oxygenated with MTBE.
    3. MTBE is necessary to meet the demand for CBG plus oxygenates and 
RFG. In California alone, motorists use 35-37 million gallons of 
gasoline per day, or about 13 billion gallons per year. The existing 
refinery configurations and available supply of other oxygenates are 
not adequate to replace MTBE and still meet this huge demand at a 
reasonable cost. The changes needed to meet air quality standards with 
MTBE would require additional massive investments to retool refineries, 
build oxygenate capacity, and in some cases add transportation and 
distribution facilities.
    4. MTBE has been detected in a limited number of water supplies and 
action must be taken to respond to this problem and to prevent it, 
including full enforcement with current law and regulations.
    5. When MTBE is detected in a water supply, it is not alone. The 
presence of MTBE is clear indication that other, more toxic compounds 
are also being released into the environment. The cause of such release 
are leaking underground storage tanks and pipelines and marine engines 
that are specifically designed to discharge unburned fuel. Ignoring 
this fact and simply banning MTBE or repealing the oxygenate mandate of 
the RFG program will not solve the water contamination problem.

    The task for this committee, the EPA, the States, the oxygenated 
fuels industry, and all other stakeholders is to find a solution that 
addresses the legitimate problems associated with MTBE without losing 
any of the substantial benefits derived from MTBE. The State of 
California Legislature has taken steps in this direction by recently 
enacting several pieces of legislation which provide for extensive 
study and evaluation of MTBE and other oxygenates, direct the 
establishment of drinking water standards, require identification and 
monitoring of potential sources of water contamination, provide 
additional funding for and expedite the remediation of gasoline spills 
and leaks, and prohibit the delivery of any petroleum products to tanks 
not in compliance with the new standards. At the same time, California 
has refused to enact legislation, which would provide a ``quick fix'' 
by banning MTBE but would not solve the problems.
    OFA trusts this committee will likewise render similar judgment. 
OFA's members are absolutely convinced that sound science, facts, and 
demonstrated results do and will continue to prove the efficacy of MTBE 
as a safe, effective pollution fighter and are prepared to work with 
this committee to solve any problems associated with the use of MTBE.
    Thank you for the opportunity to present this statement.
                        Oxygenated Fuels Association, Inc.,
                                  Arlington, VA, September 9, 1998.

    Honorable Barbara Boxer,
    U.S. Senate,
    Hart Senate Office Building,
    Washington, DC 20510.

    Dear Senator Boxer: I read with great interest your recent press 
release and corresponding letter to U.S. Environmental Protection 
Agency Administrator Carol Browner regarding the need to clean-up fuel 
contaminated water in California. On behalf of the Oxygenated Fuels 
Association (OFA) and its member companies, I applaud your initiative. 
OFA shares your view that leaking storage tanks are the root of the 
fuel contaminated ground water problem and would like the opportunity 
to meet with you to discuss ways that we can work together to help 
protect California's air and water quality.
    The OFA is firm in its resolve to keep motor fuel out of water. 
Gasoline, with its hundreds of compounds of which MTBE is but one, 
simply does not belong there. By ensuring that leaking storage tanks 
are quickly replaced, gasoline leaks can largely be eliminated. Under 
current law, all leaking storage tanks must be replaced by late 
December of this year. The OFA believes this action will go a long way 
toward preventing fuel from entering groundwater supplies.
    We respectively disagree with your call to phaseout MTBE, an 
additive that is the single most effective tool in our efforts to 
reduce air pollution. MTBE has been instrumental in improving the 
health of Californians by providing significant air quality benefits 
throughout the State. In fact, California's cleaner burning fuel 
program is one of America's best environmental success stories, having 
contributed to the State's best air quality in 50 years.
    The OFA is committed to being in the vanguard of finding a solution 
for the fuel-contamination problems, including full compliance with 
tank replacement and upgrading requirements. OFA also supported recent 
California legislation to establish a fund to help water agencies 
respond to fuel contaminated water problems.
    The OFA firmly believes that clean air and water are not mutually 
exclusive. We are striving to ensure that Californians have both. Given 
your concern about California's air quality, I hope that we can work 
together to achieve this goal.
    I look forward to discussing this issue with you in greater depth.
            Sincerely,
                    Terry Wigglesworth, Executive Director.
                                 ______
                                 
            A Message from the Oxygenated Fuels Association
    MTBE, methyl tertiary butyl ether, is one of the fastest growing 
chemicals in the United States. Around the world there are now scores 
of plants manufacturing this gasoline component commonly referred to as 
an ``oxygenate.' They have been used commercially in gasoline for over 
25 years.
    The recent growth of MTBE and other oxygenates is explained simply 
by the fact that they provide great benefits in reducing air pollution 
and toxic emissions associated with conventional gasoline. Today, over 
100 million Americans are reaping the benefits of cleaner-burning 
gasoline with oxygenates like MTBE. The first big surge of growth for 
oxygenates came in the 1970's when harmful lead was required to be 
removed from gasoline. Then, Federal and State laws, such as the Clean 
Air Act Amendments of 1990 and California's cleaner burning gasoline 
program, mandated improvements through a new breed of ``reformulated'' 
and ``oxygenated'' gasoline to reduce harmful components.
    Lately MTBE has been in the news. It has been a subject of much 
discussion in some newspapers, on radio talk shows and television news 
programs. Currently, there are legislative proposals regarding MTBE 
being considered in California and MTBE has appeared on the agendas of 
local water authorities and utility district boards.
    The Oxygenated Fuels Association's role is to help provide answers 
to those questions. Since the early 1980's, this international trade 
association has led the way in sponsoring and disseminating scientific 
students and gathering, developing and analyzing information on 
oxygenates. We have included a variety of fact sheets, questions and 
answers, press releases, and other information on MTBE in this packet. 
We hope this information proves useful to you.
MTBE History and Background
    Methyl tertiary-butyl ether (MTBE) is an oxygenate derived from 
natural gas and is used in gasoline to reduce vehicle exhaust emissions 
while maintaining high performance.
History
    1940's: MTBE first designed as a fuel additive.
    1970's: Manufactured and used commercially in Europe.
    1979: Use in the U.S. as a replacement for lead to enhance octane.
    1989: Introduced in Southern California in the first cleaner 
burning gasoline.
    1990: Clean Air Act Amendments require the use of oxygenates to 
lower automotive air pollution in nine major metropolitan areas with 
the worst air quality, including southern California.
    1992: Cleaner burning gasoline, containing 11 percent MTBE by 
volume or other oxygenates, used to satisfy Federal winter-month 
requirements to reduce carbon monoxide (CO) pollution in San Diego, Los 
Angeles Basin, Sacramento, and Bay Area.
    1995: Federal reformulated gasoline program implemented, including 
seven California areas: L.A. County, Orange, Riverside, Sacramento, San 
Bernardino, Ventura, and San Diego.
    1996: California's year-round cleaner burning gasoline program 
began statewide.
      Californians use 35 to 37 million gallons of gasoline per 
day, or about 13 billion gallons per year. MTBE is used in about 90 
percent of gasoline sold in the State. Cleaner burning gasoline 
contains 11 percent MTBE (by volume). Over 30 percent of gasoline sold 
nationwide is cleaner burning reformulated gasoline.
      California Air Resource Board's 1996 Phase 2 reformulated 
gasoline program is oxygenate ``neutral'' i.e. it does not mandate what 
specific oxygenate should be used in cleaner burning gasoline. MTBE is 
the product of choice because of economics, availability, performance 
and quality.
      There is currently no feasible substitute for MTBE in 
California gasoline. Ethanol, for example, is not available in 
sufficient quantity to meet California's requirements. It also cannot 
be transported by pipeline and instead has to be trucked, railed, 
barged and/or transshipped into California at considerable additional 
expense. It must be blended into the gasoline at the terminals, which 
are not equipped to handle a large amount of ethanol blending. Because 
of its volatilibility, ethanol cannot be used year around without 
violating Federal and State pollution standards.
Health and Environmental Effects of Motor Vehicle Emissions
      Air pollution costs Americans $150 billion dollars each 
year in lost productivity, increased medical bills, and premature 
deaths. Motor vehicle emissions account for roughly half of the ozone, 
75--90 percent of carbon monoxide, and about half of the airborne toxic 
cancer risk, according to the American Lung Association. The EPA 
estimates that nearly five million tons of ozone-forming emissions will 
be prevented in the first phase of the reformulated gasoline program 
(1995-1999).
    Motor vehicle emissions from gasoline, without oxygenates, contain 
higher concentrations of the following pollutants:
      Benzene: the toxic effects include bone marrow injury and 
hematopoletic toxicity, including leuopenia, lymphocytopena, aplastic 
anaemia and leukemia.
      Carbon monoxide: interferes with the body's ability to 
absorb oxygen, which impairs perception and thinking, slows reflexes, 
causes drowsiness and can cause unconsciousness and death; if inhaled 
by pregnant women may threaten growth and mental development of the 
fetus.
      Carbon dioxide: as the major component of greenhouse gas 
emissions, may attribute to global warming.
      Nitrogen oxides: which contribute to ground level ozone 
or ``smog'' can increase susceptibility to viral infections such as 
influenza, bronchitis, and pneumonia.
      Sulfur dioxide: potent respiratory irritant; can impair 
lung function by constricting airways and damaging lung tissue; can 
aggravate asthma and emphysema.
      Volatile organic compounds: depending on the compound, 
the effects include eye irritation, respiratory irritation and cancer. 
The most abundant are hydrocarbons. Condensation of VOCs and sulfur 
dioxide creates Articulates, including smoke, soot and dust. VOCs are 
the precursors to the formation of ground level ozone.
      Ground level ozone (i.e., urban smog): an oxidizing agent 
that attacks cells and breaks down body tissues, even at low 
concentrations; irritates mucous membranes of the respiratory system; 
causing coughing, choking, damaged lung tissue and impaired lung 
function; reduces resistance to colds and pneumonia; can aggravate 
chronic heart disease, asthma, bronchitis and emphysema.
      Toxic emissions: a broad category encompassing many 
different compounds, including toxic hydrocarbons such as benzene, 
toluene, and 1,3-butadiene, are suspected or known to cause cancer, 
reproductive problems, birth defects and other health effects.
The Benefits of Cleaner Burning Gasoline with MTBE
    Cleaner burning gasoline with MTBE has been extremely successful in 
fighting smog both in California and across the nation. Nine urban 
areas in California, using cleaner burning gasoline, are now meeting 
the U.S. EPA's national carbon monoxide standard of nine parts per 
million (ppm). Those include: Bakersfield, Chico, Fresno, Lake Tahoe N. 
Shore, Lake Tahoe S. Shore, Sacramento, San Diego, San Francisco, and 
Stockton.
      Smog, which is ground level ozone pollution, remains a 
serious local and regional air quality concern. Right now, 127 million 
Americans live in areas with poor air quality. California has some of 
the most polluted cities in the Nation and 50 percent of this air 
pollution comes from motor vehicles. A proven way to reduce ozone 
pollution is by using cleaner burning gasoline.
      In California, cleaner burning gasoline with MTBE is 
responsible for reducing benzene levels by 50 percent, smog forming 
emissions by 15 percent, and other air toxins by about 40 percent.
      Cleaner burning gasoline with MTBE reduces lung-damaging 
ozone and ozone precursors by 3 million pounds per day, including 
carbon monoxide by about 9.6 million pounds. This is equivalent to 
removing 3.5 million cars from the road.
      California's first stage smog alerts in 1996, the first 
year of the cleaner burning gasoline program, were down 50 percent 
compared to 1995, and 70 percent compared to 1994. The greater Los 
Angeles area enjoyed its best air quality year on record in 1996, with 
seven stage-one smog alerts compared to 14 stage-one smog alerts in 
1995 and 23 in 1994. In 1970, the region experienced 148 stage-one smog 
alerts.
      According to the American Lung Association, air pollution 
costs Americans $ 150 billion dollars each year in lost productivity, 
increased medical bills, and premature deaths. Cleaner burning gasoline 
with MTBE helps to increase pulmonary comfort and reduces medical costs 
for thousands of Californians, both young and old, affected by 
respiratory problems.
      Nationwide, carbon monoxide concentrations have decreased 
by 37 percent over the last 25 years, despite large increases in the 
number of vehicles on the road and the number of miles they travel. In 
1995 alone, the U.S. EPA trends report noted that average carbon 
monoxide concentrations had decreased by 10 percent. Carbon monoxide 
(CO) concentrations are a good barometer of the success of the nation's 
clean fuels program because CO pollution is primarily cause by the 
transportation sector.
      Studies estimate that the drop in carbon monoxide 
exposure following the introduction of MTBE can be expected to prevent 
or delay between 1,440 and 12,600 heart attacks each year nationally 
between 480 and 4,200 of which would have been fatal.
MTBE and Acute Health Effects
    Over 80 scientific health studies on MTBE have been conducted to 
date, making it one of the most thoroughly studied chemicals in modern 
commerce. None of the studies have identified any health-related risks 
to humans from the intended use in cleaner burning gasoline.
      The White House Office of Science and Technology Policy, 
the Health Effects Institute and the National Research Council 
completed an extensive review of oxygenated fuel additives. The report 
concluded that there was little evidence of acute MTBE related health 
effects: ``Adding oxygenates is unlikely to substantially increase the 
health risks associated with fuel used in motor vehicles . . .''
      When MTBE-oxygenated fuels were introduced in 1992 in 
Alaska, acute health complaints were reported. Preliminary studies by 
public health officials suggested an association between acute health 
symptoms and exposure to oxygenated gasoline with MTBE. However, more 
definitive and rigorous studies by the Centers for Disease Control and 
Prevention, U.S. EPA, Yale University, Rutgers University, John Hopkins 
and others disproved that association.
      Due to its low odor threshold, MTBE in gasoline is 
readily detected by some individuals and, thus, may be perceived as 
being a symptom-causing agent because it is easily identified.
      In three controlled chamber studies, performed at the 
EPA, Yale and the Swedish National Institute of Occupational Health, 
the effects of 1 hour exposures to MTBE were compared to those of clean 
air and in one case ozone-forming volatile organic compounds. All three 
studies found no symptoms related to MTBE.
      MTBE poses a ``low order'' of acute toxicity in 
experimental animals exposed via oral, dermal and inhalation routes. 
There have been studies that have reported a sensitization to MTBE in 
humans exposed by skin contact to the MTBE or to gasoline containing 
MTBE.
      The Department of Human Service in the State of Maine 
released a descriptive study of asthma hospitalization among residents 
in counties using reformulated gasoline in July 1996. The study pointed 
out that asthma hospitalization rates were higher in non-reformulated 
gasoline areas than in the areas that use reformulated gasoline with 
MTBE.
      The University of Medicine and Dentistry of New Jersey 
studied State-employed gas station workers: 115 workers in northern New 
Jersey, where reformulated gasoline containing MTBE was used, were 
compared to 122 workers in southern New Jersey, where reformulated 
gasoline was not used. No differences were found in the frequency or 
number of complaints.
MTBE and Chronic Effects
    There is no scientific evidence that MTBE causes cancer or chronic 
health effects in humans.
      The White House Office of Science and Technology Policy 
(OSTP), the Health Effects Institute and the National Research Council 
state that chronic non-cancer health effects (necrologic, 
developmental, or reproductive) would likely not occur during 
environmental or occupational exposures to MTBE.
      Using the low risk numbers that both the biological and 
statistical analyses indicate regarding cancer, it is clear that the 
benefits of using MTBE far outweigh any risks of not using MTBE. In 
fact, the California EPA has determined that cleaner burning gasoline, 
containing MTBE, has reduced cancer risks from vehicle emissions by 
about 40 percent, and lowered exposure to benzene in the air, a know 
carcinogen, by about 50 percent.
      Cancer involves damage to genes or gene formation. MTBE 
has been tested extensively in vitro and in viva for its gene toxicity 
potential. The results of these tests demonstrate that MTBE does not 
directly alter the genetic material of the cell.
      MTBE research shows that kidney tumors seen in rats 
exposed to massive doses of MTBE are clearly related to the binding of 
MTBE to a unique protein present in male rats. Humans don't make this 
protein, and, therefore, would not be at risk of developing kidney 
tumors from such exposures.
      Effects of MTBE vapor on reproduction and development 
have been evaluated in well-conducted inhalation studies with rats, 
mice, and rabbits. MTBE does not present a hazard to reproduction or 
development because no adverse effects on the embryo/fetus are noted 
except at levels that also cause considerable maternal toxicity.
MTBE in Groundwater and Surface Water
    The failure to properly contain and distribute gasoline in 
underground storage tanks, gasoline pipelines, or powered watercraft 
gasoline tanks can cause MTBE and other gasoline constituents to reach 
groundwater and surface water.
      Leaking underground storage tanks at gasoline stations 
are the largest source of groundwater contamination by gasoline and its 
constituents. California has a program to upgrade or replace all of its 
leaky underground storage tanks by the end of 1998. The Oxygenated 
Fuels Association emphatically supports California's underground 
storage tank program.
      Gasoline leaks are also a source of other gasoline 
components such as benzene, toluene, and xylene. The US EPA and State 
environmental agencies have recognized gasoline leaks as a major source 
of groundwater pollution. It has enacted regulations and monitoring 
procedures to minimize their occurrence in the future.
      The presence of gasoline constituents in groundwater does 
not necessarily mean that the substances are in the water you drink. 
Groundwater refers to the water contained in underground aquifers. 
These aquifers may or may not be a source of drinking water for your 
area.
      Generally, MTBE travels more quickly in water than 
aromatics and will, therefore, be found on the leading edge of a 
spreading gasoline leak. If a high level of MTBE is detected in 
groundwater, it shows that there is a gasoline tank leak in the area, 
and groundwater contaminated with benzene and other aromatics is 
probably not far behind.
      According to the US EPA, two-stroke engines found on 75 
percent of all powered watercrafts in the US, discharge 25 to 30 
percent of their unburned gasoline and all of its constituents directly 
into the water.
      Accumulation of MTBE in surface water is highly unlikely. 
Studies show that MTBE will volatilize to the atmosphere following the 
cessation of boating and the release of MTBE to the water body.
      MTBE concentrations in standing water bodies will 
generally diminish quickly under common lake and environmental 
conditions. The rate of MTBE removal is faster than many other 
oxygenates and is similar to certain other gasoline components, namely 
benzene. Under most realistic lake and reservoir conditions, and 
assuming that reformulated gasoline releases have ended, MTBE is not 
likely to accumulate, and thus will not pose a significant threat to 
water quality in surface waters.
      There are no natural processes that could concentrate 
MTBE beyond its original level in groundwater and surface water. MTBE's 
concentration will always decrease by biodegradation, dilution, 
evaporation or natural processes.
MTBE and Drinking Water
    The California Department of Health Services drinking water supply 
survey shows out of the 2,638 water sources tested for the presence of 
MTBE, only 1.3 percent of samples detected MTBE; however, only 0.2 
percent of the samples contained MTBE concentrations greater than 35 
parts per billion, which is the current State action level. Three of 
the samples were from the City of Santa Monica and one was an abandoned 
well.
      A State survey shows that only one major public water 
system, the City of Santa Monica, has been directly and adversely 
impacted by MTBE release to the groundwater. One of the well sites is 
250 feet from a gas station where underground storage tanks have been 
leaking for a number of years. The other site is near two gasoline 
pipelines, nearly 50 potential gasoline leak sites, and two active 
earthquake faults. The city has reached a settlement with the parties 
responsible for the problem: leaking underground storage tanks. 
Presently, the site is being remediated of all gasoline contamination.
      MTBE has a distinct taste and odor, the latter detectable 
to most people at concentrations around 45 ppb. Because of its strong 
taste and smell, the public is unlikely to ingest it at any levels that 
may pose a health risk. US EPA has released a drinking water advisory 
recommending that MTBE does not exceed a range of 20 to 40 parts per 
billion based on most sensitive human odor or taste perceptions. The 
EPA advisory determined that this range is about 20,000 to 100,000 or 
more times lower than the exposure level at which health effects were 
observed in animal testing.
      Standard water treatment technologies currently in common 
use such as aeration, ozone oxidation, and carbon absorption, can 
remove MTBE.
      While the presence of gasoline and its constituents 
represents a continuing threat to water quality due to leaking 
underground fuel tanks, spills, and leaks from pipelines, the impacts 
on water quality are expected to be far less than has been suggested. 
MTBE is less dense than water and will not sink vertically through an 
aquifer.
Underground Storage Tanks and Site Remediation
    In California, even though MTBE use has increased in recent years 
(especially since June 1996 when cleaner burning gasoline was 
implemented year-round across the State), there has been a steady 
decline in the numbers of new underground storage tank releases 
reported.
      The key to reducing gasoline chemicals, including MTBE in 
drinking water sources is underground gasoline storage tank leak 
prevention and early detection. California has an aggressive 
underground storage tank replacement program. State and Federal 
statutes require that all underground storage tanks installed before 
1984 be removed, replaced or upgraded to meet current standards by 
December 22, 1998. The Oxygenated Fuels Association emphatically 
supports all State and Federal programs to replace deteriorating or 
leaking underground storage tanks.
      Conditions under which ground water contamination occur, 
due to leaking underground storage tanks, are site specific. 
Conventional clean-up methods already used for gasoline contamination 
can be effectively employed should MTBE be present.
      MTBE or MTBE fuel blends have little or no effect on 
fiberglass laminates and can be safely stored in fiberglass reinforced 
plastic underground storage tanks. Fiberglass reinforced plastic 
underground storage tanks for petroleum products are warranted to not 
leak for a period of 30 years when used with fuel blends with up to 20 
percent MTBE.
      Several tests found MTBE-blended gasoline did not impact 
steel tanks, steel piping or other metal components in gasoline 
distribution systems. Of the common gasoline additives, MTBE was found 
to be the least corrosive to steel and other metals.
      There are no scientific studies to support claims, by 
some, that MTBE causes underground storage tanks to leak due to the 
incompatibility with glues used in fiberglass underground storage tank 
systems, or due to incompatibly with vapor recovery systems.
                                 ______
                                 
                      MTBE: Questions and Answers
              supplied by the oxygenated fuels association
    Q: What is MTBE and why is it used in gasoline?
    A: MTBE (methyl tertiary-butyl ether) is a high octane blending 
component derived from natural gas to add oxygen to gasoline which 
makes the fuel burn cleaner. Oxygen content is part of Federal and 
California government requirements for less polluting cleaner burning 
gasolines. Specifically, MTBE reduces vehicle exhaust emissions while 
maintaining high performance.

    Q: How long has MTBE been in gasoline?
    A: It has been used in gasoline for over 25 years. It was first 
used as a replacement for toxic lead compounds in gasoline. In the 
1980's, MTBE was used to make premium gasolines. Because of its success 
in cleaning the air in places like Colorado and other States, Congress 
required the use of oxygenates like MTBE in the clean fuel program 
established in the 1990 Clean Air Act. MTBE has been used in winter 
gasoline in California for the past 6 years.

    Q: How effective is MTBE blended gasoline in cleaning up the air?
    A: MTBE has had a very significant impact in improving air quality. 
Adding MTBE to gasoline makes the gasoline burn more cleanly, which 
reduces tailpipe emissions such as carbon monoxide, toxins, and smog 
forming pollutants. According to the California Air Resources Board, 
cleaner burning gasoline reduces lung damaging ozone and ozone 
precursors by 3 million pounds per day, including carbon monoxide by 
about 2.6 million pounds. This is equivalent to removing 3.5 million 
cars from the road. In fact, nine urban areas in California are now 
meeting the U.S. EPA's carbon monoxide standards.

    Q: What benefits does MTBE have over oxygenates?
    A: Compared to the other oxygenates, MTBE is convenient for 
refiners to use, more cost effective, and more widely available.

    Q: Can California use cleaner burning gasoline without oxygenates, 
such as MTBE?
    A: While it has been done in a lab, it's not practical to make 
cleaner burning gasoline without oxygenates. Without them, refiners 
would have to invest billions of dollars in new infrastructure, making 
gasoline much more expensive.

    Q: Has MTBE been subject to scientific analysis?
    A: MTBE is one of the most studied components of gasoline. Over 80 
scientific health studies on MTBE have been conducted to date, none 
which have identified any health related risks to humans from the 
intended use in cleaner burning gasoline. In a comprehensive review of 
MTBE health studies, the National Academy of Sciences (NAS) concluded: 
``Based on the available analyses, it does not appear that MTBE 
exposures resulting from the use of oxygenated fuels, are likely to 
pose a substantial human health risk.''

    Q: Is MTBE a carcinogen?
    A: There is no evidence that MTBE causes cancer or chronic health 
effects in humans. In fact, according to the California Air Resources 
Board, there is a 40 percent decrease in the cancer risk from exposure 
to benzene and other taxies from using cleaner burning gasoline 
containing MTBE.

    Q: What about these studies that show MTBE causes tumors in rats 
and mice?
    A: While very high doses of MTBE induced tumors in some laboratory 
rats and mice, there has been no identified link to cancer in humans. 
The US EPA and health experts are confident that MTBE poses no adverse 
health effects from the intended use in cleaner burning gasoline.

    Q: Is MTBE getting into groundwater?
    A: There have been incidents of MTBE and other gasoline components 
getting into groundwater. Generally, this occurs when there are leaks 
from underground storage tanks. The standard practice in the industry 
is to fix the leak and clean up the contaminated soil and groundwater. 
California has an aggressive underground storage tanks replacement 
program. State and Federal statues require that all underground storage 
tanks installed before 1984 be removed, replaced, or upgraded to meet 
current standards by December 22, 1998.

    Q: Is there drinking water contamination from MTBE?
    A: According to the most recent data supplied by the State 
Department of Health Services, only 1.3 percent of the 2,638 water 
sources tested had detected MTBE; however, only 0.2 percent of the 
samples contained MTBE concentrations greater than 35 parts per 
billion, which is the current State action level. Three of the samples 
were from the City of Santa Monica and one was an abandoned well.

    Q: What is a safe drinking water level for MTBE?
    A: No one should be drinking water that contains MTBE or any other 
gasoline component. However, EPA is-last advisory recommends that MTBE 
does not exceed a range of 20 to 40 parts per billion based on the most 
sensitive human taste or odor perceptions. This is the equivalent to 2 
or 3 tablespoons in 150,000 gallons of water (equal to about 6 in 
ground swimming pools).

    Q: Can MTBE cause underground storage tanks to leak?
    A: There is no evidence to support that claim. Tank and service 
station equipment manufacturers are very familiar with gasoline blends 
containing MTBE. Fiberglass reinforced plastic underground storage 
tanks for petroleum products are warranted to not leak for a period of 
30 years when used with fuels blends with up-to 20 percent MTBE by 
volume Which is double the amount used in cleaner burning gasoline). In 
addition, several tests found MTBE-blended gasoline did not impact 
steel tanks or other metal components in gasoline distribution systems.

    Q: Can MTBE in water be remediated?
    A: Yes. The same cleanup techniques used to remove gasoline 
contamination from groundwater can be used with MTBE.

    Q: What about reports of surface water containing MTBE?
    A: MTBE and other gasoline constituents have been detected in 
several lakes in California. The primary source of MTBE in these lakes 
is released from marine engines used for recreational boating, 
particularly two stroke engines. Scientific studies show that MTBE, 
like other components in gasoline, will evaporate quickly from the 
surface water once the source of MTBE has ceased.
                                 ______
                                 
    [Oxygenated Fuels Association Press Release, February 23, 1998]
   Oxygenated Fuels Association Applauds East Bay Mud for New Marine 
Engine Purchase Plan; Urges Rapid Development of Environmentally Safer 
                       Marine Engines Nationwide
    Arlington, VA.--Charles T. Drevna, Director of Government and 
Regulatory Affairs for the Oxygenated Fuels Association (OFA), today 
applauded a decision by the East Bay Municipal Utility District (EBMUD) 
to spend $420,000 to replace two-stroke marine engines in the agency's 
municipal watercraft with the less polluting four-stroke variety.
    ``This is a responsible and effective action taken by a major water 
authority to protect the regional water quality by limiting the amount 
of gasoline and oil which would otherwise be discharged into the 
surface waters,'' Drevna said. ``We also applaud EBMUD for recognizing 
that the problem of power craft pollution of surface waters is a 
problem of engine design and inadequate fuel and oil containment, and 
not a problem of individual components of gasoline, such as the anti-
pollutant gasoline additive, MTBE.''
    Drevna contrasted EBMUD's action with a recent statement by the 
National Marine Manufacturers Association (NMMA) which attempted to 
place the blame for polluting two-stroke marine engines on MTBE. 
Instead of falsely accusing MTBE, the ozone-scrubbing anti-pollution 
ingredient in cleaner burning gasoline, Drevna urged manufacturers of 
two-stroke marine engines to rapidly develop and bring to market marine 
engine systems that are much mote environmentally friendly than many of 
today's models which discharge 25 to 30 percent of their raw fuel and 
oil directly into lakes, rivers and streams. Drevna noted, ``EBMUD's 
decision to select the less polluting four-stroke engines for its 
official watercraft sends an important signal to marine engine 
manufacturers that polluting two-stroke engines are no longer 
acceptable on California's water ways.''
    Drevna added, ``It is environmentally unacceptable for 
manufacturers to design, build and sell two-stroke marine engines, 
which are often used to power popular personal water craft such as jet 
skis, that discharge raw, unburned fuel and oil into surface waters as 
part and parcel of their operational cycle. It is equally unacceptable 
for the NMMA to try and confuse the issue by suggesting, as it did 
recently, that taking MTBE out of gasoline will eliminate the problem 
of inadequately designed, environmentally incompatible two-stroke 
engines,'' he added.
    ``The issue here is not MTBE, or any of the other hundreds of 
individual components in gasoline. The issue is the routine discharge 
of what amounts to thousands of gallons of raw fuel every year into 
America's recreational waters, fuel which includes such components as 
benzene, a known human carcinogen, and other toxic chemicals such as 
toluene, ethylbenzene and various xylene compounds, none of which 
belong in water,'' Drevna explained.
    Drevna noted that when MTBE is placed in gasoline to make it burn 
more cleanly, it replaces some of these toxic compounds in every 
gallon. ``Still, gasoline, whether it is oxygenated or not, belongs in 
secure fuel tanks and properly operating engines,'' Drevna said.
    Drevna explained that OFA's call for cleaner, more environmentally 
compatible marine engines is by no means an attempt to prevent or 
restrict the use of pleasure craft on U.S. lakes and other waterways. 
``Recreational users of water craft bought these engines in good faith 
and they should not be punished,'' he said.
    Drevna noted that the U.S. Environmental Protection Agency has 
called for a 9-year, phased-in improvement of two-stroke marine 
engines. He also noted that some manufacturers are also advocating an 
accelerated timeframe in California to design and develop less 
polluting engines a position OFA strongly supports.
    Without the accelerated improvement of these engines, estimates are 
that it will take to the year 2025 to replace approximately 75 percent 
of the marine engines with the newer, less polluting engines. But 
Drevna said the timetable was inadequate to protect America's surface 
waters.
    ``Today's call by OFA is for marine engine manufacturers to begin 
immediate phaseout of the current two-stroke engine technology, not 
only in California, but throughout the nation, and to bring to market 
more environmentally responsible engines as rapidly as possible,'' 
Drevna concluded.
                                 ______
                                 
      [Oxygenated Fuels Association Press Release, March 12, 1998]
               Sacramento Area Meets Federal CO Standard
      clean fuels group hails air quality in 10 california cities
    Arlington, VA.--Charles T. Drevna, Director of Government and 
Regulatory Affairs for the Oxygenated Fuels Association (OFA), today 
hailed Sacramento for meeting the Federal clean air health standard for 
carbon monoxide (CO). Noting that most CO pollution comes from cars and 
trucks, Drevna attributed most of the region's improved air quality to 
the use of cleaner-burning reformulated gasoline with anti-smog 
ingredients like MTBE (Methyl tertiary Butyl Ether) and improved 
automotive emissions technology.
    The Sacramento area is one of 10 urban regions throughout 
California using the more environmentally friendly oxygenated fuels 
which were notified by the U.S. EPA that they had come into compliance 
with the national nine parts per million (ppm) CO standard.
    ``Thanks to California's specially formulated `green' fuel, the 
citizens of Sacramento are able to enjoy cleaner, healthier air,'' 
Drevna said. He added, ``Sacramento's achievement is all the more 
impressive because, like all of California, the citizens of Sacramento 
are driving more cars, more miles than ever before.''
    In 1996, according to the latest available statistics from the U.S. 
Department of Transportation, drivers in the Sacramento area 
collectively drove a total of some 26.6 million miles each and every 
day during the year. ``Despite such impressive levels of vehicle use, 
which has almost surely increased since 1996, the residents of 
Sacramento have been able to meet this tough Federal anti-pollution 
standard,'' Drevna noted. ``It's simply a case of having your car, and 
being able to drive it too,'' Drevna said, adding, ``The icing on this 
particular cake is the clean fuel which allows for geometric increases 
in driving levels while providing for decreased levels of pollution.''
    Drevna said CO is produced when fuel is burned inefficiently, and 
can be a problem in colder weather when air is heavier and harder to 
mix with fuel. ``By adding an oxygenate like MTBE to gasoline, the fuel 
is able to combust more completely even in colder temperatures, thereby 
reducing tailpipe pollutants like CO,'' Drevna said. He said that CO 
pollution can be a special problem for young children, senior citizens, 
pregnant women and individuals suffering from asthma and related 
problems.
    In addition to Sacramento, the other nine urban areas in California 
now meeting the U.S. EPA's CO standard are: Bakersfield, Chico, Fresno, 
Lake Tahoe North Shore, Lake Tahoe South Shore, Modesto, San Diego, San 
Francisco and Stockton.
                                 ______
                                 
      [Oxygenated Fuels Association Press Release, April 15, 1998]
      Oxgenates Industry Responds To Tosco's Ethanol Pilot Program
    Arlington, VA.--``Tosco's announcement today that it will institute 
a 6-month pilot program substituting ethanol for MTBE at 50 ``76'' 
branded gasoline stations in three California counties is flawed in one 
major aspect--it needlessly and incorrectly denigrates MTBE, the 
preferred anti-pollution ingredient used in over 80 percent of 
California's cleaner burning gasoline.'' So said Charles T. Drevna, 
Director of Government and Regulatory Affairs for the Oxygenated Fuels 
Association (OFA) today in response to the Tosco announcement.
    ``Tosco, and every other oil refiner in California, has always had 
the freedom of choice to choose what ever oxygenate they feel can best 
meet the State's cleaner burning gasoline specifications,'' Drevna 
explained. He added that refiners around the country routinely 
determine which oxygenate best suits their individual refinery 
configurations based upon prevailing market forces and logistics. Such 
decisions are made without public fanfare, Drevna said, adding, 
``Unfortunately, Tosco's announcement seems to be designed more as an 
exercise in public relations rather than a serious attempt to test a 
true substitute oxygenate that can work for the entire State.''
    Drevna pointed out that there is not enough ethanol available to 
replace MTBE in California's 900,000 barrel-a-day demand for cleaner 
burning gasoline. ``To suggest that this pilot program, limited to 50 
stations in Marin, Sonoma and Contra Costa counties, can eventually 
translate into a State-wide program is not credible,'' Drevna said.
    In addition, Drevna noted that the water contamination problem 
mentioned by Tosco will not be solved by using ethanol as opposed to 
MTBE. '`Neither MTBE, nor ethanol, nor any of the hundreds of other 
components of gasoline, should be leaking into groundwater from old, 
corroding underground tanks,'' Drevna said. He added. ``We need to 
replace these tanks with modern systems that prevent leaks. That way, 
we can continue to have the clean air that oxygenated fuels provide, 
while ensuring that water quality is not degraded by gasoline leaks.''
                                 ______
                                 
      [Oxygenated Fuels Association Press Release, April 15, 1998]
   Oxgenates Industry Responds To Sierra Club Call For Water Quality 
                      Investigation in California
    Arlington, VA.--Charles T. Drevna, Director of Government and 
Regulatory Affairs for the Oxygenated Fuels Association (OFA), today 
strongly took issue with a Sierra Club press statement that appeared to 
single out MTBE for the State's water pollution problems. In addition, 
Drevna said that calling for an Auditor General's investigation of the 
State's water regulatory agencies for alleged failure to protect the 
State's drinking water supplies is unnecessary and counterproductive.
    ``While we applaud the Sierra Club and other environmental 
interests for the concerns regarding California's water quality, 
singling out MTBE as a primary pollutant is both irresponsible and 
incorrect,'' Drevna said. He added that leaking underground gasoline 
tanks are responsible for discharging raw gasoline into shallow 
underground aquifers, and that MTBE is one of hundreds of chemical 
constituents in gasoline, including the more dangerous benzene, 
toluene, xylene and ethyl benzene, that sometimes end up in ground 
water.
    But, Drevna noted, ``MTBE groundwater contamination in California 
is isolated and limited and, except in a couple of well-publicized 
cases, far below any levels which would impact human health or the 
environment.''
    Drevna also took exception to comments that MTBE was ``. . . very 
expensive and difficult to remove from water. The fact is MTBE can be 
safely and effectively removed from groundwater with existing 
technology. In fact, MTBE has been in use for many years, both as an 
octane enhancer to replace lead and as a pollution fighting ingredient, 
and conventional remediation technologies have proven to be 
technologically and economically feasible.''
    Drevna added, ``We believe that the regulatory agencies in 
California with responsibilities for ensuring water quality have done, 
and are continuing to do, a good job in protecting the State's drinking 
water supplies.''
    ``We agree that more money is needed to help ensure compliance with 
tough Federal and State rules which require better underground storage 
tank integrity, site monitoring and product handling. We also agree 
that smaller gasoline retailers are in danger of economic extinction if 
they do not get help to replace their leaking tanks.''
    ``But, the bottom line is clear,'' Drevna continued, ``cleaner 
burning gasoline with MTBE is cleaning up California's air. The State 
now enjoys the best air quality it has seen in 50 years. With the 
continued vigilance of the State's water agencies, and adequate 
funding, we also believe that California's water quality is also 
improving dramatically. Californians don't have to make a Hobson's 
choice between clean air or clean water. They can have both; they 
deserve to have both.''
                                 ______
                                 
      [Oxygenated Fuels Association Press Release, March 12, 1998]
  Study Finds MTBE Will Dissipate Relatively Quickly from California 
     Surface Waters Due to Common Lake and Environmental Conditions
    Arlington, VA.--A California consulting firm has recently published 
a technical report that shows that concentrations of MTBE in standing 
water bodies will usually diminish quickly under common lake and 
environmental conditions once the source of MTBE has ceased. The report 
states, ``The rate of MTBE removal is faster than many other oxygenates 
(e.g. ethanol and TEA) and is similar to certain other gasoline 
components, namely benzene.''
    ``As a result of the latest research, we now better understand that 
the disappearance of MTBE and other fuel constituents in surface waters 
is due to volatilization and not lake mixing,'' said John Kneiss, 
Director of Health and Product Stewardship for the Oxygenated Fuels 
Association (OFA). ``Furthermore, MTBE is not likely to accumulate, and 
thus will not pose a significant threat to water quality in 
California's surface waters,'' Kneiss added.
    MTBE and other gasoline constituents have been detected in several 
lakes in California. The primary source of MTBE in these lakes is 
releases from motorized recreational boating, particularly those 
equipped with two-stroke engines.
    The report prepared by Malcolm Pirnie, Inc., of Oakland, 
California, presents a scientific model that predicts the rate of 
disappearance of MTBE and other fuel components in most typical lake 
and reservoir conditions once the source of MTBE has been terminated.
    Charles T. Drevna, Director of Government and Regulatory Affairs 
for OFA, noted, ``Many of today's two-stroke engines discharge 25 to 30 
percent of their raw fuel and oil directly into lakes, rivers and 
streams. MTBE, or any of the other hundreds of individual components in 
gasoline, which include benzene, a known human carcinogen, and other 
toxic chemicals, belong in the marine engine, not in drinking water 
sources.''
    According to the Malcolm Pirnie study, the concentrations of MTBE 
in lakes and reservoirs in California will decrease rapidly following 
cessation of recreational boating. This model can be an effective tool 
in determining an appropriate recreational boating period. A 
termination date could be established at a point in time to permit 
sufficient volatilization of MTBE and other gasoline components, thus 
helping to ensure satisfactory water quality at the intake of a surface 
water treatment plant.
    MTBE, methyl tertiary butyl ether, is used as a component of 
cleaner burning gasoline. According to the California Air Resources 
Board, cleaner burning gasoline with MTBE reduces lung-damaging ozone 
and ozone precursors by 3 million pounds per day, including carbon 
monoxide by 2.6 million pounds. This is equivalent to removing 3.5 
million cars from the road.
    Engineers in the Oakland office of Malcolm Pirnie, a national 
environmental consulting firm, conducted the research which was 
commissioned and supported by OFA. Malcolm Pirnie, Inc. is a consulting 
firm devoted principally to solving environmental problems. It provides 
a comprehensive array of services to both industry and governmental 
agencies relating to drinking water, air and water pollution control, 
solid/hazardous waste management, and environmental management/
restoration.
                                 ______
                                 
      [Oxygenated Fuels Association Press Release, March 12, 1998]
 OFA Testifies Against Bilbray Bill in Congressional Testimony; Warns 
    State Exemption From Federal Clean Fuels Standards Will Degrade 
                     California's Air Quality Gains
    Arlington, VA.--The Oxygenated Fuels Association (OFA) told a 
congressional panel today that a bill exempting many of California's 
major metropolitan areas from having to comply with Federal cleaner 
burning gasoline regulations would turn back the clock on California's 
highly successful clean fuel's program and re-introduce dirtier 
gasoline and dirtier air to the State.
    Speaking on behalf of OFA, Marvin Schlanger, Executive Vice 
President and Chief Operating Officer of ARCO Chemical Company, told 
members of the Health and Environmental Subcommittee of the House 
Commerce Committee, ``we oppose this legislation.''
    Schlanger explained, ``The main outcome of this bill would be to 
allow the major oil companies to circumvent the Federal specification 
for using oxygenates under the guise of more flexibility.''
    Schlanger added, ``Though this bill argues for flexibility, it is 
not for flexibility to make cleaner fuels. It only provides the 
flexibility to make dirtier fuels and there are not enough safeguards 
in the California Air Resources Board (CARB) Cleaner Burning Gasoline 
(CBG) regulations to prevent this from happening.''
    The bill in question, H.R. 630, was introduced in the House by 
Representative Brian Bilbray (D-CA) on February 6, 1998. It would amend 
the 1990 Clean Air Act Amendments to allow California to drop the 
oxygen standard in cleaner burning fuel used in the State's Federal 
nonattainment areas of Greater Los Angeles, San Diego, San Francisco, 
Sacramento and surrounding vicinities.
    Schlanger said the bill would undermine the 1990 Clean Air Act and 
set a negative national precedent by encouraging additional States to 
opt out of the Federal clean fuels program. Schlanger noted that if the 
Bilbray bill passes, the only identifiable beneficiaries would be large 
gasoline refiners who will undoubtedly attempt to duplicate their 
California success by attacking the reformulated fuel programs in other 
States.
    Currently, 18 States plus the District of Columbia use cleaner 
burning gasoline either State-wide or in major metropolitan regions 
within the States. Approximately one-third of all gasoline used in the 
U.S. is reformulated gasoline with oxygenates, and about 80 percent of 
this clean gasoline pool uses MTBE as the oxygenate of choice.
    Schlanger added that oxygenates, like MTBE, are an integral 
component of cleaner burning gasoline. ``MTBE not only helps reduce 
tonics and ozone related emissions from reformulated gasolines, but in 
addition has contributed to lower emissions of many criteria pollutants 
such as carbon monoxide, nitrogen dioxide, sulfur oxides, fine 
particulates, lead, and also carbon dioxide, a greenhouse gas,'' 
Schlanger said. He noted that many of these environmental benefits 
could not be duplicated without using oxygenates like MTBE.
    Schlanger emphasized a series of major points to Members of the 
Subcommittee during his testimony, as follows:
      Oxygenates are not new or unfamiliar compounds in 
gasoline. Oxygenates have been widely used in the U.S. for nearly 30 
years, and MTBE has been used in gasoline for 20 years.
      MTBE in particular has been extensively studied for its 
impact on vehicle performance, health effects, and air quality 
benefits. These studies conclude that MTBE is effective and safe when 
used as intended in gasoline.
      None of the hundreds of constituent components in 
gasoline, including MTBE, belong in ground or surface waters. If they 
are detected, it is the result of leaking underground storage tanks or 
pipelines.
      Neither MTBE nor any other oxygenate causes underground 
storage tank leaks. Reducing the amount of oxygenates in California's 
gasoline will not reduce the number of future tank leaks, or solve any 
of the related liability issues. Use of more sophisticated leak 
monitoring and detection methods is a better solution for controlling 
liability and potential contamination of groundwater.
      Reducing the oxygenate content in California's gasoline 
will result in increased pollution from older vehicles, as well as 
increased emissions from non-automotive engines that power lawn mowers, 
leaf blowers, farm equipments and related machines. Such non-automotive 
engines contribute up to 10 percent of volatile organic compound (VOC) 
emissions nationwide.
    Finally, in concluding his testimony, Schlanger told the 
Subcommittee that the Bilbray bill provides no additional benefit to 
cleaning the nation's air, and should not be allowed to take up anymore 
of Congress' valuable time. ``We should not be amending the Clean Air 
Act for the economic benefit of a few companies,'' Schlanger said.
    He added, ``Cleaner burning gasoline with MTBE is cleaning up 
California's air. The State now enjoys the best air quality it has seen 
for 50 years. American's don't have to make a choice between clean air 
or clean water. We can have both we deserve both.''
                               __________
      American Lung Association--Natural Resources Defense 
                                                   Council,
                                                    April 29, 1998.

    Honorable Michael Bilirakis,
    Chairman, Subcommittee on Health and Environment,
    House Commerce Committee,
    U.S. House of Representatives,
    Washington, DC 20515.

    Dear Chairman Blirakis: On behalf of the public health and 
environmental organizations who have been most involved in the 
implementation of the reformulated gasoline program, we are writing to 
oppose passage of H.R. 630. We oppose this bill because any alleged 
benefits gained by its enactment are far outweighed by the risk of 
subjecting one of the most successful programs enacted in the Clean Air 
Act Amendments to potential amendments that could greatly reduce or 
eliminate its effectiveness. We do not see any significant detrimental 
environmental effects from the current version of the bill because it 
applies only in California which requires gasoline to be cleaner than 
Federal RFG. However, we believe that if Congress considers H.R. 630 or 
any other bill to amend the Clean Air Act, a number of environmentally 
damaging amendments may be offered and adopted.
    Preliminary data indicates that the use of reformulated gasoline is 
significantly lowering ambient levels of ozone and toxic air pollution. 
The California Air Resource Board estimates that its Cal Reform II was 
the principal program responsible for an 18-percent reduction of ozone 
in Los Angeles and a 10 percent reduction in San Francisco during 1997. 
Ambient levels of benzene, a known carcinogen, are 55 percent lower in 
Los Angeles. While not as dramatic, cities using Federal RFG arc 
reporting lower ambient ozone and toxics levels. These benefits should 
grow as Phase II Federal RFG (similar to Cal Defoe II) is used in these 
cities beaming in the year 2000.
    There is no present need for Congressional action to modify the RFG 
program. Congress will have an opportunity to review the HAG program 
along with all the other air pollution reduction programs when it next 
reauthorizes the Clean Air Act. Indeed, reauthorization may begin next 
year. Until then, we urge that Congress let the implementation of this 
program proceed without disruption in order to reduce air pollution and 
protect public health and the environment.
    We are concerned that reformulated gasoline constituents, including 
but not limited to MTBE, have been detected in water. Especially in 
shallow groundwater aquifers, there is evidence that MTBE and other 
gasoline constituents are leaching through soil and contaminating water 
supplies. The best evidence we have seen does not suggest that MTBE 
poses a unique or greater health risk distinct from that posed by other 
gasoline constituents. Nevertheless, gasoline is a dangerous substance. 
It is clear is that a more aggressive effort to reduce or eliminate the 
leakage of all gasoline and its constituents is needed, not only in 
California but nationwide.
    Much needed research on this and other potential health risks posed 
by human exposure to MTBE is befog pursued intensively in California 
and elsewhere Congress would greatly benefit from waiting for the 
results of this research before undertaking amendments to the 
reformulated gasoline provisions of the Clean Air Act.
    We ask that this letter be included the record accompanying the 
hearing held on H.R. 630 on April 22.
            Sincerely,
                      Fran Dills, Deputy Managing Director,
                                         American Lung Association.

                        Janet S. Hathaway, Senior Attorney,
                                 Natural Resources Defense Council.
                                 ______
                                 
          member companies of the oxygenated fuels association
    Arco Chemical Company

    Belvieu Environmental Fuels, Inc.

    CDTECH (Catalytic Distillation Technologies)

    Coastal Refining & Marketing

    ECOFUEL, S.P.A.

    Enron Clean Fuels Company

    Huntsman Corporation

    Methanex Incorporated

    Neste Oy

    Qatar Fuel Additives Company Limited

    Sabic Americas, Incorporated

    Texaco Refining & Marketing

    Texas Petrochemicals Corporation

    United Catalysts, Incorporated

    Valero Marketing and Supply Company
                                 ______
                                 
      [Oxygenated Fuels Association Press Release, July 22, 1998]
   Clean Fuels Group Conducts Comprehensive Odor Testing For MTBE in 
                             Drinking Water
    Arlington, VA.--The Oxygenated Fuels Association (OFA) today 
released the results of the most comprehensive ``chemical aesthetics'' 
test to date on the ozone fighting gasoline component, Methyl-tertiary 
Butyl Ether (MTBE) to help ensure California's drinking water quality 
and potability. MTBE is a major ingredient in California's cleaner 
burning gasoline, which has dramatically improved air quality 
throughout the State.
    The study probed the individual abilities of a wide range of 
consumers to detect MTBE in drinking water, using one of the most 
sensitive of human senses, the sense of smell. The intention of this 
study was to collect reproducible, reliable and useful data using an 
accepted protocol which was subjected to scrutiny by an independent 
Expert Advisory Panel. Continents on the protocol were solicited from 
California's Department of Health Services (DHS) and the Association of 
California Water Agencies (ACWA).
    ``With data collected from the largest number of subjects ever used 
for this kind of MTBE testing, the results showed that the average 
perception of test participants to deflect MTBE in drinking water was 
at concentrations of I 5 parts per billion (ppb),'' said John Kneiss, 
Director of Health Sciences and Product Stewardship for OFA. Kneiss 
said that, based on the test results, OPA supports setting a secondary 
(aesthetic) State standard for MTBE in drinking water at no lower than 
the 15 ppb level.
    ``Such a secondary standard fully equates with the sensory range of 
other aesthetic evaluations of MTBE in drinking water,'' Kneiss noted. 
He added that the 15 ppb level would ``shield more than 95 percent of 
the consuming population from threshold perceptions of MTBE in water 
and would be consistent with the standard settings rational used by the 
State of California and the U.S. Environmental Protection Agency for 
other constituents in water.''
    The study design for the comprehensive test was developed by 
Malcolm Pirnie, Inc., a California-based national environmental 
consulting firm. The test itself was recently conducted by National 
Food Laboratory, located in Dublin, California.
    Previous studies to evaluate the aesthetic properties of MTBE used 
a smaller number of ``professional'' panelists and had protocol 
limitations that impacted test results. This new study followed the 
established American Society for Testing and Materials (ASTM) protocol 
for evaluations by a substantially larger panel of non-professional 
test subjects (in this case, 57 consumers). In addition, to maximize 
panelist responses, odor-free bottled water from a commercial supplier 
was used for the testing procedure.
    Finally, the protocol, the testing procedures, and the 
interpretation of the study's results were subjected to review by an 
Expert Advisory Panel, consisting of Dr. Richard Berk of the University 
of California, Los Angeles (UCLA), Dr. Mel Suffet, also of UCLA, and 
Dr. Mike McGuire, of McGuire Environmental Consultants.
    The test procedures called for each consumer ``panelist'' to sniff 
three separate, odor-neutral plastic cups of water and to identify 
which one contained a concentration of MTBE. In this study, the sample 
that smelled ``different from the other two samples'' was declared the 
sample containing MTBE. If the consumer was unable to detect any 
difference in odor, they were asked to guess which cup contained the 
MTBE.
    In addition to standard statistical analysis, a more rigorous 
assessment of the test results, conducted by Dr. Bak, took into 
consideration the possibility of incorrectly Messing which cup 
contained MTBE, as well as any incorrect identification of a cup 
containing the bottled water as having MTBE in it. When the statistical 
analysis of such human errors were calculated, using the more rigorous 
methodologies, the analysis showed that the concentration at which 5 
percent or less of the population might detect the presence of MTBE in 
water would be no lower than 22 ppb.
    Based on the overall evaluation of the testing and statistical 
analysis, the expert panel concluded that the more conservative, direct 
results of the odor test data (i.e., the 15 ppb detection) should be 
used in setting a secondary standard that Filly maintains water quality 
for the consuming population.
    A copy of the MTBE odor study is available by calling Carolyn 
Anderson at OFN at 703-841-7100. Fax requests can be sent to 703-841-
7720 A comprehensive summary of the study can also be downloaded from 
OFA's web site at www.ofa.net.
                               __________
                     Statement of Tosco Corporation
    Mr. Chairman and members of the committee: This statement is 
submitted on behalf of Tosco Corporation in support of the bipartisan 
bills sponsored by Senator Feinstein (S. 1576) and Congressman Bilbray 
(H.R. 630). The bills will allow California cleaner burning gasoline 
(``CARB Gasoline'') to satisfy Federal reformulated gasoline (``RFG'') 
requirements in California, so long as CARB Gasoline provides emission 
reductions at least equivalent to Federal RFG. These bills provide a 
critically important opportunity to preserve the air quality benefits 
of the Federal and State RFG programs while safeguarding California's 
drinking water supplies.
    Tosco is one of the largest refiners and marketers of gasoline in 
California. We operate three refineries in California, which produce 
significant amounts of CARB Gasoline. We market CARB gasoline through 
our network of 1,600 retail outlets in the State which sell under our 
Union 76, Circle K and BP brands.
    Our company has taken the lead in calling for reduced use of MTBE 
in California. In October 1997, we directed a letter to the California 
Air Resources Board (CARB) expressing our concern about potential MTBE 
contamination of drinking water. Our letter urged adoption of the 
Feinstein-Bilbray legislation as ``a good first step'' which would 
provide the flexibility refiners need to begin shifting away from MTBE.
    As a refiner serving the California market, we find ourselves in a 
``catch 22'' situation where the Federal RFG requirements and the 
shared gasoline distribution system operate to effectively leave us no 
choice but to use MTBE to meet the clean fuel standards in California. 
Passage of the Feinstein-Bilbray legislation would eliminate the 
Federal year-round oxygenate mandate in California and enable us to 
meet California's stringent fuel standards with less oxygenate, no 
oxygenate, or with other oxygenates, such as ethanol.
    Tosco strongly believes that Congress has the opportunity, by 
enacting the Feinstein-Bilbray legislation, to facilitate an immediate 
reduction in MTBE use in California without any adverse effect on the 
air quality goals of the Federal RFG program. In this regard, we can 
assure this committee that, if the present bill becomes law, our 
company will immediately take appropriate steps to phaseout the use of 
MTBE in California.
    Health impacts aside, MTBE has a low odor and taste threshold which 
will make drinking water unacceptable to the consumer. And since 
oxygenates are not necessary to produce clean gasoline, we do not see 
the logic in continuing to mandate their use on a year-round basis. The 
mandate is especially anomalous in the face of the potential threat to 
drinking water supplies posed by MTBE.
    Passage of the Feinstein-Bilbray legislation will neither mandate 
nor ban the use of MTBE in California. By removing the current oxygen 
mandate, the legislation will simply allow California refiners to use 
lesser amounts of oxygenates or no oxygenates at all. Under 
California's performance-based standards, the air quality benefits of 
the Federal and State RFG programs will be maintained.
    In addition, we believe ethanol can play an important role in 
replacing MTBE in California. In April of this year, Tosco initiated a 
pilot program to substitute ethanol for MTBE in gasoline sold at about 
50 of our Union 76 retail outlets in Northern California. Although this 
represents a small portion of our California fuel sales, the pilot 
program has demonstrated that CARB gasoline can be produced using 
ethanol in place of MTBE. We have received very positive consumer 
response to this program and we hope to be able to extend the pilot 
program beyond its initial 6-month duration.
    Because gasoline blended with MTBE dominates California's shared 
pipeline distribution system, it is currently not feasible to produce 
and distribute commercial scale volumes of base gasoline suitable for 
blending with ethanol. To the extent that the refining industry's 
dependence on MTBE is reduced by enactment of Feinstein-Bilbray, a 
parallel distribution system could evolve for handling base gasoline 
for ethanol blending. This option could prove to be particularly 
feasible in CO nonattainment areas, primarily in Southern California, 
where oxygenated gasoline will continue to be required during the 
winter season.
    Finally, I want to assure the committee that Tosco stands ready to 
work with Congress, and with Federal and State regulators, on measures 
to protect both air quality and water quality. Tosco has made a 
substantial financial investment in equipment to produce CARB gasoline. 
We are proud of our role in helping to improve air quality in 
California, and we are confident that, with the passage of Feinstein-
Bilbray, we will be able to help reduce the risk of water contamination 
from MTBE in gasoline.

                                   - 
