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 <subject>Energy consumption</subject>
 <subject>Energy industry</subject>
 <subject>Fuel prices</subject>
 <subject>Pollution control</subject>
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 <title>U.S. Ethanol Market: MTBE Ban in California</title>
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<abstract>The 1990 Amendments to the Clean Air Act (CAA) requires that an
additive (oxygenate) be added to the gasoline used in areas with 
excessive carbon monoxide or ozone pollution. The CAA		 
specifically requires those areas with &quot;severe&quot; ozone pollution  
to use reformulated gasoline, which contains at least two percent
oxygen by weight. In California, as in other areas of the	 
country, oil refining companies predominantly use the oxygenate  
methyl tertiary butyl ether (MTBE) to meet the CAA requirement.  
Because MTBE has been detected in ground water, the governor of  
California issued an executive order in March 1999 to ban MTBE in
the state&apos;s gasoline by the end of 2002. If California decides to
use ethanol to replace MTBE, ethanol production capacity from	 
2003 through 2005 could likely satisfy U.S. consumption. However,
if other states also banned MRBE and moved to ethanol,		 
consumption could increase and affect the industry&apos;s ability to  
meet demand. Moreover, production capacity projections may be	 
overstated because they include not only existing plants and	 
plants under construction, but also new plants being planned,	 
which may not materialize. Although prices have been relatively  
stable to this point, ethanol price spikes could occur in	 
California if supplies were disrupted by either production or	 
distribution problems.</abstract>
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<note>Correspondence</note>
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 <topic>Alternative energy sources</topic>
 <topic>Energy consumption</topic>
 <topic>Energy industry</topic>
 <topic>Fuel prices</topic>
 <topic>Pollution control</topic>
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