[Public Papers of the Presidents of the United States: George H. W. Bush (1992-1993, Book II)]
[October 1, 1992]
[Pages 1732-1733]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks at the Ethanol Waiver Announcement Ceremony
October 1, 1992

    Thank you all very much, and welcome to the Rose Garden. Please be 
seated. Let me just thank Senator Dole and Congressman Michel, two of 
our leaders of the Congress, for being here; Governor Edgar, the 
Governor of Illinois, with me; Tim Trotter from the Corn Growers, from 
the National Corn Growers; and Bill Reilly over here. Bill, come up here 
now. We need you up here to show a little hands across the border here. 
[Laughter] Ann Veneman is here from the Ag Department, the Deputy 
Secretary; Linda Stuntz, the Deputy Secretary of Energy, is with us, 
Linda; and other Members of Congress. Welcome, all. Governor Thompson 
wanted to be here, Tommy Thompson, but could not make it this afternoon.
    I've asked you all to come here today because we have a very 
positive announcement, one that will help America's farmers, one that 
will help clean our air, and one that will promote our energy security 
by increasing the use of domestically produced renewable fuels.
    I'm announcing today that the administration has decided to 
effectively grant a one-pound volatility waiver for ethanol, and to do 
so in a way that is fully consistent with the Clean Air Act and 
protective of the environment. This one-pound waiver will apply to all 
reformulated gasoline blended with ethanol sold in northern U.S. cities 
in up to 30 percent of the market of these cities. As you know, the 
Clean Air Act requires that the smoggiest of these cities reduce smog-
forming emissions by 15 percent in the summer months. And to make sure 
that this reduction is achieved, we will require that the volatility of 
gasoline sold in these cities be reduced to 7.8 pounds per square inch.
    Gasoline with this volatility level is being sold in southern cities 
under current regulations right now. So we have confidence that it can 
be achieved at little cost to the consumer. In fact, our estimate is 
that the effect on the price of gasoline would be only about three-
tenths of a penny.
    Our program also permits ethanol use to expand even further. The 
Governors of States in the northern tier will have the right to allow a 
waiver on a higher percentage of the market, and if they order further 
compensating emission reductions. The waiver we are announcing today 
will apply to all the cities in the north that are required to adopt 
reformulated gasoline by 1995 and to all northern cities in States that 
choose to opt into this program.
    When southern States choose to opt into the reformulated gas 
program, they will be able to choose between the regular reformulated 
gasoline program and one in which ethanol is granted a one-pound waiver 
for up to 20 percent of the market, with offsetting volatility 
reductions that would require that gasoline with 7.0 RVP be sold.
    Again, we expect gasoline of this kind to be sold in California in 
1996, so we know it is possible to proceed in this way. In addition, if 
ethanol blenders can secure volun-

[[Page 1733]]

tary agreements to get this lower volatility gasoline, they can receive 
a corresponding waiver under the regular reformulated gasoline program 
in the South.
    Today's waiver is just one part of our program to promote ethanol. 
We're also going to work for the enactment of an additional tax 
incentive for ETBE. We're going to expedite the development of the 
complex model that measures all types of emissions so that the full 
smog-reducing benefits of ethanol can be measured. For the coming 
winter, we're going to make sure that all 39 cities that need help in 
reducing carbon monoxide participated in the oxygenated fuel program.
    The bottom line is this: Clean-building ethanol can help reduce 
pollution. It is domestically produced. It is renewable. This waiver 
will allow ethanol to participate in both the summer and winter programs 
required under the Clean Air Act. It will do so in a way that protects 
all of the environment, all of the environmental benefits that we worked 
so hard for when that law was enacted.
    I know that this question of how to allow ethanol to play a role in 
our reformulated gasoline program has been extraordinarily complex and a 
very difficult one. But I am pleased that this creative solution allows 
us to proceed in a way that is good for farmers, good for rural America, 
good for the environment in our cities, and good for American consumers 
and motorists.
    So I congratulate all those who have worked hard to achieve this 
result. Thank you all very much for coming. Thank you very much. That 
concludes our little ceremony.
    Well, I'm very pleased. I was just asking Bill if he feels very 
comfortable with it, and he does. And God knows, he's got good 
environmental credentials, the best.
    Well, thank you all very much for coming down. Concludes a happy 
event. Thank you.

                    Note: The President spoke at 2:35 p.m. in the Rose 
                        Garden at the White House. In his remarks, he 
                        referred to William K. Reilly, Environmental 
                        Protection Agency Administrator.