[Congressional Record (Bound Edition), Volume 148 (2002), Part 3]
[Senate]
[Pages 3927-3928]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       ENERGY POLICY ACT OF 2002

  Mr. JEFFORDS. Mr. President, the Daschle-Bingaman substitute 
amendment, also known as the Energy Policy Act of 2002, includes 
portions of a bill that was reported favorably last year from the 
Committee on Environment and Public Works.
  That bill, the Federal Reformulated Fuels Act, S. 950, was approved 
with the committee's understanding that further action by the full 
Senate would be necessary to solve the delicate problem of eliminating 
MTBE from the fuel supply to protect water resources, while maintaining 
air quality and stimulating renewable fuel use.
  The substitute amendment before the Senate now does a good job of 
resolving that problem and balancing many political and environmental 
concerns. This language does not represent the perfect solution for my 
State or the Northeast. However, without it, MTBE contamination of 
water resources will continue unabated. With it, at least we can be 
assured of greater protection of air and water quality.
  If States proceed to ban MTBE without clear Federal authority 
provided in this amendment, air quality could suffer as RFG areas would 
be forced to use ethanol in a very inflexible way due to the existing 
oxygen content requirement in the Clean Air Act. In that situation, and 
without the anti-backsliding provisions in the substitute amendment 
before us, there might be significant increases in vehicle emissions of 
both volatile organic compounds, which contribute to smog, and toxic 
air pollutants, and large and sudden increases in gasoline prices could 
also occur.
  I would have preferred a bill that, in addition to eliminating the 
oxygen content requirement, simply eliminated the existing one-pound 
waiver of Reid vapor pressure requirements for ethanol blends and 
allowed all Governors to opt-in easily to the RFG program for their 
whole States. But, at least this language expedites Governors' access 
to that RVP waiver's elimination and provides accelerated opt-in 
authority to the entire States in the ozone transport region, where the 
ozone problems are quite serious. My preferred construction would have 
gone even further toward providing ever greater air quality benefits 
and a clearer set of ``national'' fuels.
  The provision on liability limitations for renewable fuels is also 
problematic in that it is not clear to many of us why such a limitation 
is necessary. One would assume that Congress has required a renewable 
fuel content in motor vehicle fuel knowing what renewable fuels will be 
used to meet this requirement. Indeed, we assume that these renewable 
fuels will be ethanol and biodiesel. If these renewable fuels are as 
beneficial to the public health as we have been lead to believe, then 
there should be no need for such a liability limitation.
  Under the provision, it is clear that no liability limitation applies 
to MTBE. It is clear that no liability limitation applies to any cases 
filed prior to the date of enactment of the bill. It is clear that the 
limitation applies only to a defective product claim and no other type 
of claim. It is clear that this limitation applies only to a renewable 
fuel, and if such fuel is blended with substances that do not meet the 
definition of a renewable fuel, the limitation does not extend to those 
substances.
  The limitation is not intended to limit any legal requirements that 
apply to the use, distribution, transport or storage of these renewable 
fuels, and as such, this provision does not amend or modify any such 
requirements. Nor should this provision be read to curtail the duty of 
the producers, transporters and distributors of these fuels to act 
responsibly with regard to their products, including providing all 
warnings of dangers to human health or the environment associated with 
their products and taking all precautions to avoid any such harm which 
may include eliminating the use of the product altogether.
  The substitute amendment provides protection against increases in 
toxic air pollutant emissions by maintaining the overcompliance that 
refiners have achieved since the inception of the RFG program. This is 
particularly vital to the Northeast, as vehicles are a 
disproportionately large source of these emissions inventory. The 
language includes an important statutory deadline for further EPA 
rulemaking to impose any additional and necessary toxics reductions to 
protect public health. As my colleagues may know, several studies have 
implicated vehicle toxics emissions as a contributor to increased 
cancer and developmental risks in congested urban areas.
  Perhaps as important, the amendment requires the EPA to do a much 
better job of ensuring that fuels and fuel additives don't harm water 
quality, as well as air quality. Manufacturers will need to regularly 
supply information to the Agency on the public health and environmental 
impacts of the use of fuels and fuel additives. The Administrator will 
be held responsible for assuring that that data is up to date and 
adequate for determining whether those substances' use is a cause for 
concern.
  As my colleagues know, I have been a strong proponent of encouraging 
the use of alternative and renewable fuels for decades. That is why I 
have supported S. 760, a bill to provide incentives for those fuels and 
vehicles, and many many other efforts to motivate reductions in our 
dependency on petroleum. We are making a small dent in that dependency 
with this language. The total motor gasoline consumption in 2012 is 
expected to exceed 180 billion gallons annually. The substitute's 
provisions require that about 2.8 percent of gasoline consumption in 
that year to be fuel made from renewable sources. This is good for 
energy security and the environment.
  Work has been underway in Congress to try to solve this problem since 
MTBE contamination was first found. Senators Boxer, Feinstein and Bob 
Smith, in particular, have been instrumental in addressing the matter. 
Before S. 950, the Committee on Environment and Public Works reported a 
bill, S. 2962, in the 106th Congress which had an effect similar to 
what is contained in this substitute amendment. Many of the most 
important concepts in those bills are now embodied in the amendment. It 
is past time that Congress acted on this matter. Further delay will 
simply lead to more water resource contamination.
  I ask unanimous consent that a brief and informal section-by-section 
summary of the renewable fuels and MTBE provisions be included in the 
Record

[[Page 3928]]

following my statement. This may assist Senators and their staff in 
understanding what we are attempting to do with this substitute. I urge 
them to help us solve this problem.
  There being no objection, the following material was ordered to be 
printed in the Record.

                       Section-by-Section Summary

       Section 819. Renewable Content of Motor Vehicle Fuel. 
     Amends the Clean Air Act to require that gasoline sold or 
     dispensed to consumers in the United States contain a certain 
     volume of renewable fuel starting in the year 2004. The 
     volume starts at 2.3 billion gallons in the first year and 
     increases to 5.0 billion gallons in 2012. The volume 
     requirement continues thereafter at the same percentage that 
     the 5.0 billion gallons represents in relation to the total 
     gasoline pool in 2012. Existing Clean Air Act compliance 
     requirements for section 211 apply to this new requirement.
       Renewable fuel is defined as motor vehicle fuel made from 
     grain or other biomass sources, methane from landfills, 
     sewage, etc. and that replaces or reduces fossil fuel. This 
     includes ethanol and biodiesel.
       EPA must promulgate regulations translating the total 
     national volume requirement into percentages that are 
     applicable to individual refiners, blenders and importers. 
     They may achieve compliance with the applicable percentage by 
     buying credits from others in the industry that have used 
     more renewable fuel than required.
       Credits are valid for up to three consecutive years, 
     depending on regulations promulgated. Compliance with the 
     applicable percentage of renewable fuel may be deferred for 
     one year, if the refiner, blender or importer makes up the 
     deficit in the following year and complies with the following 
     year's requirement. Ethanol made from non-corn sources, such 
     as dedicated energy crops, animal waste, municipal solid 
     waste, and wood and wood residues, generates 1.5 credits for 
     every gallon sold or introduced into commerce.
       Using EIA information, EPA will ensure that no less than 35 
     percent of the applicable renewable fuel use shall take place 
     in every season. In 2004, ethanol consumed in California will 
     not be included in calculating that year's seasonal 
     variation.
       EPA, in consultation with DOE and USDA, may waive the 
     renewable fuel requirement in whole or in part on petition by 
     one or more States by reducing the national quantity required 
     for one year at a time, if one of two conditions are met. 
     One, implementation would severely harm the economy or 
     environment of a State, a region or the country. Two, there 
     is an inadequate domestic supply or distribution capacity to 
     meet the requirement. DOE must do an initial study within 180 
     days to review the consumer impacts of the requirement in 
     2004 and make recommendations regarding a waiver.
       Small refineries are not covered by the renewable fuel 
     content requirement until 2008. Before 2007, DOE must study 
     the economic hardship on small refineries of compliance with 
     that requirement. If DOE finds disproportionate impact on a 
     small refinery, EPA will provide an extension on compliance 
     for up to 2 years. Small refiners may opt in to the renewable 
     fuel program at any time before compliance is required.
       Exclusions from Ethanol Waiver. A Governor may require that 
     gasoline to be blended with ethanol must achieve a lower Reid 
     vapor pressure than the Clean Air Act currently provides, 
     upon a showing to EPA that there will otherwise be an 
     increase in emissions that will contribute to air pollution 
     in that State. EPA is required to act on a Governor's 
     petition within 90 days, and promulgate regulations that will 
     take effect the later of one year or the next high ozone 
     season. If approving the Governor's petition would result in 
     insufficient supplies of gasoline, EPA will extend the 
     effective date of the regulations for not more than 1 year 
     and may renew the extension two more times.
       Renewable Fuels Safe Harbor. This section provides that 
     renewable fuels required to be used and as defined by this 
     act will not be deemed defective in design or manufacture, in 
     terms of a manufacturer's liability for introducing it into 
     commerce after enactment, so long as the renewable fuel does 
     not violate EPA controls or prohibitions and the manufacturer 
     is in compliance with EPA requests for information on the 
     renewable fuels' public health and environmental effects, the 
     techniques for detecting the additive in fuel, and the 
     resulting effects on emissions from vehicles, vehicles' 
     performance, and any emissions related effect on public 
     wealth and welfare.
       Section 832. The Leaking Underground Storage Tank, LUST, 
     program is modified to allow EPA and the States to use LUST 
     monies to carry out corrective actions to remediate MTBE and 
     other ether contamination that poses a threat to human 
     health, welfare, or the environment. Contamination by or from 
     an underground tank leak is not required for use of the 
     funds.
       Bedrock/Soil Remediation. Funds are authorized to study 
     remediation of aquifers of various sorts that have been 
     contaminated by MTBE.
       Total LUST funds authorized to be appropriated for this 
     section are $402.35 million.
       Section 833. Authority for Water Quality Protection From 
     Fuels. The Clean Air Act is amended to allow EPA to regulate 
     fuels and fuel additives to prevent degradation of water 
     quality.
       MTBE use is discontinued not later than 4 years after 
     enactment, except in any State that chooses to continue using 
     it. EPA will promulgate the appropriate implementing 
     regulations and may allow trace quantities of MTBE in motor 
     vehicle fuel to exist nationally after 4 years. This Federal 
     phase out is not intended to affect any existing State 
     efforts to ban MTBE.
       Existing domestic manufacturers of MTBE supplying today's 
     nonattainment areas are eligible for transition assistance 
     for conversion of their facilities to produce MTBE 
     substitutes. There are $750 million total authorized for 
     2003-05 for such assistance.
       Section 834. Elimination of the Oxygen Content Requirement 
     for Reformulated Gasoline. The 2 percent oxygen content 
     requirement for RFG under section 211 of the Clean Air Act is 
     eliminated 270 days after enacted, except that it is 
     eliminated upon enactment for California.
       To ensure that elimination of the oxygen requirement and 
     the phase out of MTBE do not increase toxic air pollutant 
     emissions, within 270 days EPA must promulgate regulations to 
     ensure that each refinery or importer of RFG maintains its 
     toxics emissions reduction performance achieved in 1999-2000. 
     If that performance is not achieved in any region, PADD, of 
     the country, EPA must modify the regulations for all RFG to 
     assure performance.
       EPA will promulgate revisions to the RFG regulations to 
     require that the more stringent VOC performance requirements 
     of Southern region RFG apply to all RFG.
       Section 835. Public Health and Environmental Impacts of 
     Fuels and Fuel Additives. EPA is required to regularly 
     collect information from manufacturers on the public health 
     and environmental effects, including water quality, of fuels 
     and fuel additives. EPA must also study a variety of 
     potential MTBE substitutes.
       Section 836. Analyses of Motor Vehicle Fuel Changes. Within 
     5 years, EPA will conduct and submit to Congress a broad 
     analysis of the changes in emissions of air pollutants and 
     air quality due to the changes in the use of motor vehicle 
     fuel that occurred as a result of this act.
       Section 837. Additional Opt-in Areas Under Reformulated 
     Gasoline Program. Any Governor of a State in the ozone 
     transport region, 13 north/eastern States, may opt the whole 
     State in to the reformulated gasoline program so long as 
     there is a sufficient capacity to supply RFG. EPA shall 
     implement this change not later than 2 years after the 
     Governor's request, but opt in States must stay in the 
     program for at least 4 years.
       Section 838. Federal Enforcement of State Fuels 
     Requirements. States may have the Federal Government enforce 
     a State's controls on fuels or fuel additives if the controls 
     are part of an approved SIP and otherwise meet the 
     requirements of section 211(c)(4)(c).
       Section 839. Fuel System Requirements Harmonization Study. 
     EPA and DOE will conduct a study of motor vehicle fuel 
     requirements and report to Congress by June 1, 2006, with 
     recommendations for improving air quality, reducing costs to 
     consumers and producers, and to increase supply liquidity.

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