[Congressional Record Volume 147, Number 45 (Friday, March 30, 2001)]
[Senate]
[Pages S3220-S3222]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DASCHLE (for himself and Mr. Lugar):
  S. 670. A bill to amend the Clean Air Act to eliminate methyl 
tertiary butyl ether from the United States fuel supply and to increase 
production and use of ethanol, and for other purposes; to the Committee 
on Environment and Public Works.
  Mr. DASCHLE. Mr. President, today I am joining with my good friend, 
the distinguished chairman of the Senate Agriculture, Nutrition, and 
Forestry Committee, Senator Richard Lugar, to introduce the ``Renewable 
Fuels Act of 2001.'' Over the years, Senator Lugar has been one of the 
nation's leading champions of American agriculture and energy 
independence, and I am pleased to work with him on this effort to 
encourage the use of ethanol in our nation's fuel supply in a way that 
improves air quality and strengthens the nation's energy security.
  The bill Senator Lugar and I are introducing today is a refinement of 
a proposal we introduced in the last Congress. Many of the provisions 
of that bill were included in legislation reported by the Senate 
Environment and Public Works Committee in September 2000. 
Unfortunately, time ran out on the 106th Congress before final action 
could be taken on that committee bill.
  The Renewable Fuels Act of 2001 allows states to address a serious 
groundwater contamination problem by phasing out MTBE and establishes a 
nationwide renewable fuels standard that encourages the environmentally 
sound use of ethanol. The effect of this measure will be to get MTBE 
out of groundwater, reduce emissions of greenhouse gases, diversify our 
domestic liquid fuels production base, and promote investment and job 
creation in rural communities. The bill will also result in substantial 
reductions in taxpayer outlays by enabling farmers to value-add their 
products into renewable liquid fuels and reduce oil imports that are 
exacerbating our trade deficit.
  The genesis of this legislation is found in the compelling need to 
resolve the problem of MTBE contamination of groundwater in states such 
as California. As we discovered in the 106th Congress, the solution to 
this problem, whose roots go back over a decade to the congressional 
debate on the merits of RFG with oxygenates, is extremely complex.
  A review of the Congressional Record debate shows that the Congress 
had several major objectives in enacting the RFG with oxygenates 
program, including: to improve the environment by reducing mobile 
source vehicle emissions (VOC ozone precursors; toxics; NOx; 
and CO2); to improve energy security by reducing oil 
imports; to stimulate the economy, especially in rural areas; and to 
provide regulatory relief to the automobile industry, small businesses/
stationary sources, and state and local authorities.
  While the detection of MTBE in drinking water supplies in some areas 
of the country has encouraged criticism of the RFG program, the record 
shows that most of the Congress' original goals for the RFG program 
have been met and, in many cases, even surpassed. The RFG program has, 
in fact, provided refiners with environmentally clean, high performance 
additives that have substantially extended gasoline supplies. Due to 
the increased demand for oxygenated fuels like ethanol, capital has 
been invested in farmer-owned cooperative ethanol plants throughout

[[Page S3221]]

the Midwest, and rural communities have benefited from quality jobs and 
expanded tax bases. Harmful emissions in our major cities, from 
California to the Northeast, have fallen dramatically. Our trade 
deficit has been substantially reduced, and taxpayers have saved 
hundreds of millions of dollars in farm program costs.

  In short, the RFG program has been one of the most successful 
private/public sector programs in recent memory.
  Some of our colleagues from areas that have experienced MTBE water 
contamination problems believe the entire RFG program should be 
dismantled. They argue that the RFG program has run its course and that 
states should be allowed to waive its oxygenate requirement.
  I do not accept this argument and will strongly resist any effort to 
grant state petitions to opt out of the 1990 RFG minimum oxygen 
standard requirements. That option is not supported by the science and 
would simply encourage multinational oil companies to import more crude 
oil and to use energy-intensive methods to refine it into toxic 
aromatics that combust into highly carcinogenic benzene.
  I am sympathetic, however, to concern about the existence of MTBE in 
groundwater, and Senator Lugar and I offer an alternative response to 
the states' struggle to deal with this issue. We believe the Renewable 
Fuels Act addresses this challenge swiftly and effectively without 
abandoning the documented benefits of the RFG program.
  Consider the agricultural, energy and environmental benefits of our 
approach. A September 6, 2000, United States Department of Agriculture 
analysis concluded that the Renewable Fuels Standard, RFS, provision in 
our bill would increase ethanol demand from baseline projections of 2.0 
billion gallons, to a minimum of 4.6 billion gallons, over the next 10 
years. This is a substantial increase when compared with sales last 
year, which reached approximately 1.5 billion gallons. USDA found that, 
under this renewable fuels standard, farm incomes would increase by an 
average of $1.3 billion per year each year from 2000 to 2010. That 
totals to more than $13 billion for hard hit rural communities. 
Taxpayer outlays would drop dramatically due to the improved, market-
based terms of trade in basic farm commodities. Some experts calculate 
that the nation's taxpayers would directly benefit from billions of 
dollars per year in farm program savings.
  At today's price for imported oil, our bill's RFS provision would 
save the country over $4 billion annually in current dollars. The 
``Renewable Fuels Act of 2001'' will triple the use of renewable fuels 
in the United States over the next 10 years. This tripling represents 
less than 4 percent of the nation's total motor fuels consumption, 
which is well less than the oil industry's projected demand growth over 
the next 10 years. However, while small in relationship to the market 
share of multinational oil companies, it would account for the lion's 
share of the stated goal of Senate Energy and Natural Resources 
Committee Chairman Frank Murkowski when he recently announced his 
Committee's goal to reduce the Nation's oil import dependence over that 
same period.
  As for the environment, the Renewable Fuels Act of 2001 provides 
states like California with a way to get MTBE out of groundwater 
without sacrificing ethanol's contribution to the reduction of 
emissions of the greenhouses gases linked to global climate change.
  Finally, as impressive as its record has been, I believe the RFG 
minimum oxygen standard program has more to offer the country. And I am 
pleased to report that President Bush agrees with that analysis.
  In a visit to Sioux Falls, SD, earlier this month, the President has 
some encouraging words to say about the role of renewable fuels like 
ethanol. He emphasized his commitment ``to value-added processing, to 
make sure that ethanol is an integral part of the gasoline mixes in the 
United States.''
  I applaud President Bush's vision for ethanol. We agree that it is 
time to make ethanol an integral part of this country's fuel mix, in a 
manner that is predictable, sustainable, cost effective, and 
environmentally responsible. The ``Renewable Fuels Act of 2001'' meets 
all of these criteria.
  What Senator Lugar and I are suggesting is a truly national program 
that addresses geographically diverse needs in a synergistic manner. 
This comprehensive approach has encountered skepticism from well 
meaning interests that are, understandably, focused on their own 
priorities: state officials who are intent on cleaning up their 
groundwater; elected officials who are philosophically troubled by the 
perception of federal mandates; and farm groups whose fear of the 
vagaries of the legislative process make them reluctant to lock arms 
with traditional foes.
  Senator Lugar and I present the Renewable Fuels Act of 2001 as a new 
paradigm for reconciling historically competitive interests in a manner 
that will promote a broad range of national benefits. It is my hope 
that our colleagues on both sides of the aisle, as well as 
representatives of state and local governments, the environmental 
community, the oil industry and farm groups, will take an open minded 
look at this approach.
  Mr. LUGAR. Mr. President, I am pleased to join Senator Daschle in 
reintroducing the Renewable Fuels Act of 2001. This bill is intended to 
form the basis for a solution to the MTBE problem that will be 
acceptable to all regions of the nation.
  In July 1999, an independent Blue Ribbon Panel on Oxygenates in 
Gasoline called for major reductions in the use of MTBE as an additive 
in gasoline. They did so because of growing evidence and public 
concerns regarding pollution of drinking water supplies by MTBE. These 
trends are particularly acute in areas of the country using 
Reformulated Gasoline.
  Because of concerns regarding water pollution, it is clear that the 
existing situation regarding MTBE is not tenable. MTBE is on its way 
out. The question is what kind of legislation is needed to facilitate 
its departure and whether that legislation will be based on 
consideration of all of the environmental and energy security issues 
involved.
  The Renewable Fuels Act of 2001 will be good for our economy and our 
environment. Most important of all, it will facilitate the development 
of renewable fuels, a development critical to ensuring U.S. national 
and economic security and stabilizing gas prices.
  The security of our whole economy revolves around our over-dependence 
on energy sources from the unstable nations of the Middle East. We must 
be able to address this challenge. Finding an environmentally sensitive 
way to promote the use of renewable fuels is an important part of this 
challenge. That is what I believe our bill will accomplish.
  The Renewable Fuels Act of 2001 will lead to at least four billion 
seven hundred million gallons of ethanol being produced in 2011 
compared to one billion, six hundred million gallons today. Under the 
Act, one gallon of cellulosic ethanol will count for one and one-half 
gallons of regular ethanol in determining whether a refiner has met the 
Renewable Fuels Standard in a particular year. This will greatly 
accelerate the development of renewable fuels made from cellulosic 
biomass. These fuels produce no net greenhouse gas emissions.
  The Renewable Fuels Act of 2001 will establish a nationwide Renewable 
Fuels Standard, RFS, that would increase the current use of renewable 
fuels from 0.6 percent of all motor fuel sold in the United States in 
2000 to 1.5 percent by 2011. Refiners who produced renewable fuels 
beyond the standard could sell credits to other refiners who chose to 
under comply with the RFS.
  This bill would require the EPA Administrator to end the use of MTBE 
within four years in order to protect the public health and the 
environment. And it would establish strict ``anti backsliding 
provisions'' to capture all of the air quality benefits of MTBE and 
ethanol as MTBE is phased down and then phased out.
  Unlike last year's bill, this bill retains the Minimum Oxygen 
Standard in the Clean Air Act Amendments. However, the Clean Air Act is 
amended to ensure that, after MTBE is removed from gasoline, there will 
be no backsliding in clean air provisions related to ground level ozone 
and toxic air pollution and also that there will be strict limitations 
on the aromatic content of reformulated gasoline and of all gasoline in 
order to further safeguard clean air.

[[Page S3222]]

  I hope that my colleagues will examine this bill as well as other 
legislative approaches that would spur the development of renewable 
fuels such as ethanol, whether derived from corn or other agricultural 
or plant materials, while maintaining strict clean air requirements.

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