|Congressional Research Service Reports
Redistributed as a Service of the NLE*
MTBE in Gasoline: Clean Air and Drinking Water Issues
James E. McCarthy and Mary
Specialists in Environmental Policy
Resources, Science, and Industry Division
February 25, 2000
Concern over ground and surface water contamination caused by the
gasoline additive methyl tertiary butyl ether (MTBE) has raised new questions concerning
the desirability of using the additive as a means of producing cleaner burning fuel. It is
used by most refiners to produce the reformulated gasoline required in portions of 17
states and the District of Columbia. MTBE is credited with producing marked reductions in
emissions of carbon monoxide; reformulated gasoline, of which it is a component, has also
reduced the volatile organic compounds that react with other pollutants to produce smog.
Over the last few years, however, incidents of drinking water contamination by MTBE,
particularly in California, have raised concerns and led to calls for restrictions on its
use. On March 25, 1999, Governor Davis of California ordered a phase-out of MTBE use in
the state by December 31, 2002.
EPA has taken a variety of actions to address the MTBE issue. Based
on current research, the Agency's view has been that MTBE poses some risk, although no
greater risk than that posed by other gasoline components. The Agency has responded to the
ground water contamination problem by providing information, intensifying research, and
focusing on the need to minimize leaks from underground fuel storage tanks. In late 1998,
EPA formed an advisory panel of state, industry, environmental, and other stakeholders
(dubbed the Blue Ribbon Panel) to review MTBE issues and make recommendations. In its
final report (July 1999), the panel recommended (and EPA agreed) that MTBE use should be
If MTBE is removed from gasoline, there would still be a need,
unless the Clean Air Act were amended, for refiners to use alternative sources of oxygen
in gasoline. The major potential alternatives to MTBE are other forms of ether, such as
ethyl tertiary butyl ether (ETBE), and alcohols such as ethanol. These other oxygenates
may pose health and environmental impacts, but inadequate data make definite conclusions
difficult. In announcing the phase-out of MTBE in his state, California's Governor Davis
required three state agencies to conduct additional research on the health and
environmental impacts of ethanol, the most likely substitute. In reports approved in
January 2000, the agencies concluded that there would be no significant adverse impacts to
public health or the environment from switching to ethanol.
The switch from MTBE to ethanol is not without problems, however.
Ethanol costs more to produce than MTBE, poses challenges to the gasoline distribution
system, and, in the short term, is unlikely to be available in sufficient quantity to
replace MTBE nationwide. Gasoline that meets the performance requirements for reformulated
gasoline without using oxygenates can be made, but the cost of doing so is uncertain, and
current law requires the use of oxygenates in RFG.
The principal issue for Congress is whether Clean Air Act provisions
concerning reformulated gasoline should be modified to allow refiners to discontinue or
lessen their use of oxygenates. Legislation to permit California refiners to do so has
substantial support among that state's congressional delegation. Bills allowing additional
flexibility in all states have also been introduced, as have bills that would phase out
use of MTBE.
This report provides background information concerning the gasoline
additive methyl tertiary butyl ether (MTBE), discusses air and water quality issues
associated with it, and reviews options available to congressional and other policy-makers
concerned about its continued use.
Under the Clean Air Act Amendments of 1990, numerous areas with poor
air quality are required to add chemicals called "oxygenates" to gasoline as a
means of improving combustion and reducing emissions. The Act has two programs that
require the use of oxygenates, but the more significant of the two is the reformulated
gasoline (RFG) program, which took effect January 1, 1995.(1) Under the reformulated gasoline program, areas with
"severe" or "extreme" ozone pollution (82 counties with a combined
population of 55 million) must use reformulated gasoline; areas with less severe ozone
pollution may opt into the program as well, and many have. In all, portions of 17 states
and the District of Columbia use reformulated gasoline; a little more than 30% of the
gasoline sold in the United States is RFG.
The law requires that RFG contain at least 2% oxygen by weight.
Refiners can meet this requirement by adding a number of ethers or alcohols, any of which
contain oxygen and other elements. Because these substances are not pure oxygen, the
amount used to obtain a 2% oxygen level is greater than 2% of the gasoline blend. For
example, MTBE is only 19% oxygen and, thus, RFG made with MTBE must contain 11% MTBE by
volume to meet the 2% requirement.
By far the most commonly used oxygenate is MTBE. In 1997, 76% of RFG
contained MTBE. MTBE has also been used since the late 1970s in non-reformulated gasoline,
as an octane enhancer, at lower concentrations. As a result, gasoline with MTBE has been
used virtually everywhere in the United States, whether or not an area has been subject to
Air Quality Benefits Resulting from MTBE Use
State and local environmental agencies and EPA attribute marked
improvements in air quality to the use of fuels containing MTBE and other oxygenates, but
the exact role of oxygenates in achieving these improvements is subject to discussion. In
Los Angeles, which has had the worst air quality in the country, the use of reformulated
gasoline was credited with reducing ground-level ozone by 18% during the 1996 smog season,
compared to weather-adjusted data for the same period in 1994 and 1995. Use of RFG also
reduced the cancer risk associated with exposure to vehicle emissions by 30 to 40%,
according to the California EPA, largely because it uses less benzene, a known human
Whether the oxygenates themselves should be given credit for these
improvements has been the subject of debate, with the answer depending to some extent on
what one assumes would replace the oxygenates if they were removed. Asked to look at the
ozone-forming potential of different oxygenates used in reformulated gasoline, a National
Academy of Sciences panel concluded that "... the addition of commonly available
oxygenates to RFG is likely to have little air-quality impact in terms of ozone
reduction."(3) An EPA advisory
panel, by contrast, concluded that the use of oxygenates "appears to contribute to
reduction of the use of aromatics with related toxics and other air quality
Less controversy exists regarding oxygenates' role in reducing
carbon monoxide emissions. Both EPA and an interagency group chaired by the White House
Office of Science and Technology Policy (OSTP) have reported improvements in carbon
monoxide (CO) levels due to the use of oxygenates. According to the June 1997 OSTP report,
"analyses of ambient CO measurements in some cities with winter oxygenated gasoline
programs find a reduction in ambient CO concentrations of about 10%."(5)
EPA also "believes that the reductions estimated in air quality
studies are significant and that these reductions help to protect the public from the
adverse health effects associated with high levels of CO in the air."(6) The Agency bases its conclusions on both its own analysis
and on a report prepared for two industry groups. The latter, using hourly data for more
than 300 monitoring sites gathered over a 9-year period, concluded that use of oxygenated
fuels was associated with a 14% reduction in ambient CO concentrations.(7)
The improvements in measured air quality have not come without
questions. In several cities, residents have complained of a variety of health effects
from exposure to MTBE/gasoline exhaust: headaches, dizziness, nausea, sore eyes, and
respiratory irritation. Some complaints have centered around the use of MTBE in cold
weather, two of the principal areas noting complaints being Alaska and Milwaukee,
The Interagency Task Force examined these complaints and concluded:
With regard to exposures ... experienced by the general population
and motorists, the limited epidemiological studies and controlled exposure studies
conducted to date do not support the contention that MTBE as used in the winter oxygenated
fuels program is causing significant increases over background in acute symptoms or
Additional research is being conducted by EPA, universities, and
others. Under the authority of Section 211 of the Clean Air Act, EPA has requested that
refiners conduct a number of health effects studies on oxygenated, reformulated, and
conventional gasoline, which should provide additional information.
Much discussion over the past 2 years has centered on whether MTBE
has the potential to cause cancer. Although there are no studies on the carcinogenicity of
MTBE in humans, several rodent studies have been done. Based on these animal studies
(which looked primarily at inhalation effects), EPA has concluded that MTBE poses a
potential for carcinogenicity to humans at high doses; however, because of uncertainties
and limitations in the data EPA has been unable to make a confident estimation of risk at
low exposure levels.(9) In 1998, the
International Agency for Research on Cancer (IARC), the U.S. National Toxicology Program,
and California's Carcinogen Identification Committee all determined not to list MTBE as a
human carcinogen. Regarding noncancer effects, another California advisory committee
determined that there was not clear scientific evidence to support listing MTBE as a toxic
substance affecting human development or reproduction. These groups generally noted that
research gaps exist regarding the potential health effects of MTBE, and that the data were
particularly limited on health effects associated with MTBE ingestion.
For practical purposes, the interpretation of any health risks
associated with the addition of MTBE to gasoline requires a comparison to the health risks
associated with conventional gasoline. The Interagency Task Force, EPA, and some
environmental groups have all argued that current knowledge suggests that MTBE is a less
serious pollutant than the gasoline components it replaces. According to the OSTP report,
the cancer risk from exposure to MTBE is "substantially less than that for benzene, a
minor constituent of gasoline that is classified as a known human carcinogen; and more
than 100 times less than that for 1,3-butadiene, a carcinogenic emission product of
incomplete fuel combustion."(10)
Water Quality and Drinking Water Issues
A major issue regarding the use of MTBE concerns its detection at
low levels in ground water in numerous locations nationwide and at elevated levels in some
municipal drinking water wells and reservoirs. MTBE is very soluble and, once released, it
moves through soil and into ground water more rapidly than other chemical compounds
present in gasoline. Once in ground water, it is slow to biodegrade and is more persistent
than other gasoline-related compounds. In surface water, it dissipates more rapidly:
studies show that most of it evaporates from the upper levels of surface water in a few
weeks, while it persists longer at greater depths.(11)
The primary source of MTBE in ground water appears to be petroleum
releases from leaking underground storage tank (UST) systems. Other significant sources
include leaking above ground storage tanks, fuel pipelines, refueling facilities, and
accidental spills.(12) Data indicate
that the most significant source of MTBE in lakes and reservoirs is exhaust from motorized
watercraft, while smaller sources include gasoline spills, runoff, and ground water flow.(13)
Occurrence of MTBE in Drinking Water.
Available information on the occurrence of MTBE in public drinking water supplies has
increased substantially over the past few years but remains somewhat limited
geographically. Although a number of serious contamination incidents have been reported,
particularly in California, the available data generally do not indicate a broad presence
of MTBE in drinking water supplies at levels of public health concern. However, as
monitoring has increased in various states, so has the number of public water systems
showing detections of MTBE.
The most extensive MTBE monitoring data are available for
California. The state requested community water systems to begin testing for MTBE in 1996,
and made the testing mandatory for most public water systems in February 1997. As of
January 2000, 1,444 systems had tested 6,492 sources of drinking water. MTBE was detected
in 52 (0.8%) of these sources, including 31 of 6,076 ground water sources (0.5%) and 21 of
416 surface water sources (5%). Overall, 30 (2.1%) of the 1,444 public water systems
reported detections of MTBE in at least 1 of their drinking water sources. (14) Very few sources had MTBE
concentrations exceeding the EPA taste and odor drinking water advisory of 20-40
micrograms per liter (g/L).(15) The
state database did not include some contaminated wells that have been closed, however.
In 1998, the state of Maine tested nearly 800 public water supplies
and 950 randomly selected private wells and found detectable levels of MTBE in 16% of the
public water supplies and 15.8% of the private wells. None of the public water supply
samples exceeded the state drinking water standard of 35 g/L, while 1% of private well
samples contained MTBE concentrations above the standard. Roughly 94% of public water
supply samples showed MTBE levels that were either not detectable or were below 1 g/L;
the remaining 6% of samples were between 1 g/L and 35 g/L.(16)
Nationwide, the data on the presence of MTBE in drinking water are
more limited. In July 1999, the EPA-appointed Blue Ribbon Panel on Oxygenates in Gasoline
reported that between 5% and 10% of drinking water supplies in high oxygenate use areas
show at least detectable amounts of MTBE, and that the vast majority of these detections
have been well below levels of public health concern, with roughly 1% of detections
exceeding 20 g/L.(17) In a 1998
survey of state Leaking Underground Storage Tank (LUST) programs undertaken by the
University of Massachusetts and EPA, 19 states reported detections of MTBE in public water
systems. Among these states, the total number of public wells with MTBE detections was
estimated to range from 251 to 422 wells, with preliminary data indicating that the vast
majority of detections were below 10 g/L.(18)
Occurrence of MTBE in Ambient Ground
Water. Looking at ground water generally (not only drinking water wells) the data
indicate that low-levels of MTBE are found more often. The California Environmental
Protection Agency has estimated that, based on monitoring information available for UST
sites, MTBE can be expected to be found in shallow, unused ground water at thousands of
UST sites in the state, and often at high concentrations (in the parts per million range).(19) Furthermore, a 1998 report by the
Lawrence Livermore National Laboratory found that MTBE was not significantly degrading in
the monitoring networks for leaking UST sites.(20)
Nationally, the most comprehensive research has been conducted by
the United States Geological Survey (USGS) through the National Water Quality Assessment
Program (NAWQA). USGS data for some 2,743 monitoring, observation, and water supply wells
in 42 states (from 1993-1998) showed MTBE present in about 5% (145) of the wells, with
MTBE levels exceeding 20 g/L in 0.5% (12) of the wells.(21) In all, MTBE was detected in 22 of the 42 states. The
USGS further evaluated the occurrence data based on whether or not detections occurred in
RFG or winter oxyfuel program areas. The researchers reported that low concentrations of
MTBE were detected in 21% of ambient ground water samples in high MTBE-use areas and in
2.3% of samples in low or no-MTBE use areas.(22)
Additional federal and state monitoring initiatives now underway
should further advance knowledge about the presence and behavior of MTBE in ambient water
and drinking water. Most significantly, the USGS, in cooperation with EPA, has been
assessing the occurrence of MTBE and other volatile organic compounds in surface and
ground water in 12 mid-Atlantic and Northeastern states where MTBE use is common. The
study focuses on community water systems, and the results are expected to be available
EPA's Responses to MTBE Occurrence in Water
Safe Drinking Water Act Initiatives.
To address concerns raised by the detection of MTBE in ground water and drinking water
supplies, EPA has undertaken a range of activities. In December 1997, the Agency issued a
drinking water advisory for MTBE based on consumer acceptability (for taste and smell).
EPA issues drinking water advisories to provide information on contaminants in drinking
water that have not been regulated under the Safe Drinking Water Act (SDWA). Advisories
are not enforceable, but provide guidance to water suppliers and other interested parties
regarding potential health effects or consumer acceptability. While the MTBE advisory is
not based on health effects, EPA notes that keeping MTBE levels in the range of 20-40
g/L or lower for consumer acceptability reasons will also provide a large margin of
safety from adverse health effects. Specifically, the advisory states that,
[c]oncentrations in the range of 20 to 40 g/L are about 20,000 to
100,000 (or more) times lower than the range of exposure levels in which cancer or
noncancer effects were observed in rodent tests. This margin of exposure is in the range
of margins of exposure typically provided to protect against cancer effects by the
National Primary Drinking Water Standards under the Federal Safe Drinking Water Act. This
margin is greater than such standards typically provided to protect against noncancer
effects. Thus, protection of the water source from unpleasant taste and odor as
recommended will also protect consumers from potential health effects.(24)
EPA also is taking steps that could lead to the development of an
enforceable National Primary Drinking Water Standard for MTBE. In February 1998, EPA
included MTBE on a list of contaminants that are potential candidates for regulation under
the Safe Drinking Water Act. Every 5 years, EPA is required to develop a list of
contaminants that may require regulation. By August 2001, the Agency must select at least
five contaminants from the list and determine whether each contaminant should be
Compounds on the candidate contaminant list are categorized as
regulatory determination priorities, research priorities, or occurrence priorities.
Because of data gaps on MTBE health effects and occurrence, EPA placed MTBE in the
category of contaminants for which further occurrence data collection and health effects
research are priorities. Thus, while EPA is not likely to select MTBE for regulation in
this 5-year cycle, the Agency is pursuing research to fill the data gaps that currently
exist so that a regulatory determination may be made.
In addition, the Safe Drinking Water Act directed EPA to publish in
August 1999 a regulation requiring public water systems to conduct monitoring for a list
of unregulated contaminants. In the final regulation,(25)
EPA included MTBE on the monitoring list, and public water systems will be required to
monitor for MTBE beginning January 2001.
The occurrence data generated under the Unregulated Contaminant
Monitoring Rule, combined with the results of ongoing health studies, are intended to
provide information needed by EPA to make a regulatory determination for MTBE. Because
this information is unlikely to be available in time for the first round of determinations
to be made in August 2001, EPA will not be able to make a regulatory determination for
MTBE before 2006. EPA requires approximately three and one-half years to promulgate a
drinking water regulation; consequently, the earliest EPA is expected to have a drinking
water regulation for MTBE is 2010.(26)
Underground Storage Tank Regulation.
A key EPA and state contamination prevention effort involves implementing the underground
storage tank program established by the 1984 amendments to the Resource Conservation and
Recovery Act (RCRA). Under this program, EPA has set operating requirements and technical
standards for tank design and installation, leak detection, spill and overfill control,
and tank closure. As of 1993, all tanks were required to comply with leak detection
regulations. Additionally, all tanks installed before December 1988 (when standards for
new tanks took effect) were required to be upgraded, replaced or closed by December 22,
1998. Federal and state regulators anticipate that as tank owners and operators comply
with the new requirements, the number of petroleum and related MTBE leaks from UST systems
should decline significantly.(27) EPA
has roughly estimated that perhaps 85% of tanks were in compliance with the December 1998
requirements by the end of FY 1999.
Blue Ribbon Panel on Oxygenates in Gasoline
As part of its effort to gather information and focus research, in
November 1998, EPA established an independent Blue Ribbon Panel on Oxygenates in Gasoline
to review the broad range of issues posed by the use of MTBE and other oxygenates. The
panel was established under the auspices of the Clean Air Act Advisory Committee, and its
membership reflected a broad range of experts and stakeholders.(28)
The panel was directed to perform the following tasks:
- examine the role of oxygenates in meeting the nation's goal of clean
- evaluate the efficiency of each of the available oxygenates in
providing clean air benefits and the existence of alternatives,
- assess the behavior of oxygenates in the environment,
- review any known health effects, and
- compare the cost of production and use, and each product's
The panel also was directed to study the causes of ground water and
drinking water contamination from motor vehicle fuels, to explore prevention and cleanup
technologies for water and soil, and to make recommendations to EPA "on how to ensure
public health protection and continued improvement in both air and water quality."
In releasing its recommendations July 27, 1999, the Blue Ribbon
Panel stressed that "RFG has provided substantial reductions in the emissions of a
number of air pollutants from motor vehicles, most notably volatile organic compounds
(precursors of ozone), carbon monoxide, and mobile-source air toxics (benzene,
1,3-butadiene, and others), in most cases resulting in emissions reductions that exceed
those required by law."(29)
Nevertheless, the panel made a number of recommendations. The panel:
- recommended that the winter oxygenated fuels program be continued;
- agreed broadly that use of MTBE should be reduced substantially (with
some members supporting its complete phase out), and that Congress should act to provide
clear federal and state authority to regulate and/or eliminate the use of MTBE and other
gasoline additives that threaten drinking water supplies;
- recommended that Congress act to remove the current Clean Air Act
requirement that 2% of RFG, by weight, consist of oxygen, in order to ensure that adequate
fuel supplies can be blended in a cost-effective manner while reducing usage of MTBE;
- recommended that EPA seek mechanisms to ensure that there is no loss
of current air quality benefits (i.e., no backsliding); and
- recommended a comprehensive set of improvements to the nation's water
protection programs, including over 20 specific actions to enhance Underground Storage
Tank, Safe Drinking Water, and private well protection programs.(30)
The panel's numerous water protection recommendations addressed
prevention, treatment, and remediation. For example, the panel recommended that EPA work
with Congress to determine whether aboveground petroleum storage tanks (which generally
are not regulated) should be regulated; work to enhance state and local efforts to protect
lakes and reservoirs that serve as drinking water supplies by restricting use of
recreational water craft; and accelerate research for developing cost-effective drinking
water treatment and remediation technologies.
With regard to the recommendation to reduce substantially the use of
MTBE, the panel noted that accomplishing such a major change in gasoline supply without
disruptions to fuel supply and price would require up to 4 years lead time if the use of
MTBE were eliminated (or less if use was substantially reduced).
The panel also suggested that EPA and others should accelerate
ongoing health effects and environmental behavior research of other oxygenates and
gasoline components that would likely increase in use in the absence of MTBE.
EPA Administrator Carol Browner concurred with the recommendation of
the Blue Ribbon Panel calling for a significant reduction in the use of MTBE. She also
stated her commitment to work with Congress for "a targeted legislative solution that
maintains our air quality gains and allows for the reduction of MTBE, while preserving the
important role of renewable fuels like ethanol."(31)
Alternatives to MTBE
The major potential alternatives to MTBE are other oxygenates. This
is so both for practical and for regulatory reasons: at present, oxygenates are required
by the Clean Air Act, and, they possess several advantages, including high octane and the
ability to replace toxic components of conventional gasoline.(32)
Oxygenates that could replace MTBE include ethers, such as ethyl
tertiary butyl ether (ETBE), and alcohols such as ethanol. These other oxygenates may pose
health and environmental impacts, but inadequate data make it difficult to reach definite
conclusions. EPA's Blue Ribbon Panel concluded:
The other ethers (e.g., ETBE, TAME, and DIPE) have been less widely
used and less widely studied than MTBE. To the extent that they have been studied, they
appear to have similar, but not identical, chemical and hydrogeologic characteristics. The
Panel recommends accelerated study of the health effects and groundwater characteristics
of these compounds before they are allowed to be placed in widespread use.(33)
Ethanol and other alcohols are considered relatively innocuous on
their own, but some research suggests that their presence in a gasoline plume extends the
spread of benzene and other toxic constituents of gasoline through ground water.(34)
In announcing the phase-out of MTBE in his state, March 25, 1999,
California's Governor Davis required three state agencies to conduct additional research
on the health and environmental impacts of ethanol, the most likely substitute. In reports
approved in January 2000, the agencies concluded that if ethanol were substituted for
MTBE, there would be "some benefits in terms of water contamination" and
"no substantial effects on public-health impacts of air pollution."(35)
The switch from MTBE to ethanol is not without problems, however.
Ethanol costs substantially more to produce than MTBE; it poses challenges to the gasoline
distribution system (it would separate from gasoline if transported long distances by
pipeline, so it must be mixed with non-oxygenated gasoline blendstock close to the market
in which it is to be sold); and, in the short term, it is unlikely to be available in
sufficient quantity to replace MTBE nationwide.(36)
Since late 1997, some refiners have discussed the possibility of
making gasoline that meets the performance requirements for RFG without using oxygenates.
Tosco and Chevron, two firms with large stakes in the California gasoline market, have
alluded to this possibility, and asked for changes in the rules to allow the sale of RFG
not meeting the oxygenate requirement. In October 1997, Tosco expressed concern about the
growing evidence of the potential for extensive MTBE contamination in asking the
California Air Resources Board to "take decisive action" to "begin to move
away from MTBE."(37) Chevron,
California's largest refiner, followed suit, announcing that it "may be possible to
make a cleaner burning gasoline without oxygenates, and still reduce emissions to the same
extent achieved with current standards."(38)
The company has stated its support for legislation allowing it to stop or reduce its use
of oxygenates. These statements were supported by the Western States Petroleum
Association. The American Petroleum Institute now also supports legislation to remove the
RFG oxygenate requirement.
Affected industries are not united in seeking authority to replace
MTBE, however. The major producers of MTBE, notably ARCO, have not joined the efforts to
promote alternatives, and ethanol producers and agricultural interests (most ethanol is
made from corn) are concerned that removing the oxygenate requirement would negatively
affect the sales of their products.
Impact of Phase 2 of the RFG Program
The consideration of alternatives to the use of MTBE has taken place
at a time when the requirements for reformulated gasoline are changing. The 1990 Clean Air
Act Amendments, which established the RFG program, required its implementation in two
phases. Phase 1 of the program took effect January 1, 1995. Phase 2, which sets more
stringent performance standards for emissions of volatile organic compounds (VOCs) and
toxic air pollutants, took effect January 1, 2000.
Both phases of the program require that RFG contain 2% oxygen. As in
Phase 1, Phase 2 leaves refiners free to choose which oxygenate they will use.
Nevertheless, some observers, including representatives of the ethanol industry, argue
that Phase 2 provides additional incentives to use MTBE, because in order to achieve the
VOC reduction target specified in the statute, Phase 2 RFG will have to have a lower Reid
Vapor Pressure (RVP). Gasoline blended with ethanol has a higher RVP than that blended
with MTBE, unless additional costly steps are taken to reduce the RVP of the base gasoline
to which the ethanol is blended. Thus, absent a change in the VOC reduction target, MTBE
might more likely be used to meet the new Phase 2 requirements.
Because of statutory requirements, EPA has limited flexibility to
modify the VOC reduction target; but, in response to requests from the ethanol industry
and the Governors' Ethanol Coalition (a coalition of 19 governors), the Agency has agreed
to provide credits toward the required VOC reductions for use of ethanol blends containing
at least 3.5% oxygen by weight.(39)
The credit proposal stems in part from a report from the National Academy of Sciences'
National Research Council that found that in addition to lowering VOCs directly, RFG made
with ethanol lowered ozone formation through its impact on carbon monoxide formation.(40)
Legislation which could affect MTBE use has been introduced in the
104th, 105th, and 106th Congresses. In the current
Congress, about a dozen bills related to MTBE had been introduced as of early February
2000. Several (H.R. 11
/ S. 266, H.R. 1705, H.R. 3449, S. 645, and S. 1886) would repeal the
RFG program's oxygenate requirement or allow waivers. At least five bills (H.R. 1367, H.R. 1398, H.R. 1705, H.R. 3449, and S. 1037) would phase out
or ban the use of MTBE in gasoline.(41)
Other introduced bills address specific aspects of the MTBE issue: H.R. 3536, for example,
would require research and monitoring of the substance; S. 267 would direct the EPA
Administrator to give priority to cleanup of petroleum contaminants in drinking water
under the underground storage tank program; and S. 268 would accelerate the
schedule for new emission standards for marine engines, in order to reduce the amount of
fuel and MTBE emitted to surface waters.
As in previous years, two of the bills in the current Congress (H.R. 11 / S. 266) aim to change the
regulatory requirements for reformulated gasoline as they pertain to California.
California has unique status under Section 211(c)(4)(B) of the Clean Air Act. Because its
air pollution program predated the federal program and because air quality in portions of
the state has historically been worse than that anywhere else in the country, California
is allowed to have separate regulations for fuels. As a result of this unique status,
gasoline sold in portions of the state (Los Angeles, Sacramento, and San Diego) must meet
two separate sets of requirements -- state and federal. The federal requirements mandate
that RFG contain at least 2% oxygen by weight (a requirement now generally met by adding
MTBE to the fuel). These standards apply in areas containing about two-thirds of the
state's population. California's standards, which became effective a year later than the
federal, include an oxygen content specification "because of the oxygen requirements
in the federal RFG program."(42)
According to Cal EPA, however, "a key element of the California program is a
mathematical or 'predictive' model that allows refiners to vary the composition of their
gasoline as long as they achieve equivalent emission reductions. ... [F]or areas not
subject to federal RFG requirements, refiners can use the predictive model to reduce or
even eliminate the use of oxygenates," except during the four winter months, when
they are subject to separate oxygenate requirements to reduce carbon monoxide.(43)
The complicated regulatory requirements faced by California refiners
and marketers of gasoline led Representative Brian Bilbray, of San Diego, to introduce
legislation to provide for more flexible federal requirements in California's case.
Similar legislation was introduced in the Senate by Senator Dianne Feinstein. The
legislation (H.R. 11 / S. 266) would apply only to
California, dispensing with the federal oxygen requirement, provided that the fuel
continues to achieve the required reductions in emissions of toxic air pollutants and
ozone-forming compounds specified elsewhere in Section 211(k). The legislation is
supported by a number of oil companies, the California Air Resources Board, and the
Governor of California, and it is cosponsored by 51 members of the California
A hearing on H.R. 11 was held by the
House Commerce Committee's Subcommittee on Health and Environment May 6, 1999,(44) and the subcommittee approved the
bill, with an amendment, September 30, 1999. The discussion during markup, however,
indicated an uncertain future for the bill in its present form. Numerous amendments were
offered and withdrawn without a vote, with the promise of further negotiations before the
bill is brought to the full committee. Amendments offered would have broadened the bill's
coverage to other states, phased out the use of MTBE, and addressed international trade
issues related to the MTBE phase-out.
In part, the difficulties encountered by H.R. 11 reflect wider
concerns over MTBE use. Organizations initially opposed or indifferent to legislation
affecting California now favor action, but on a broader scale. These organizations include
the U.S. Environmental Protection Agency (which initially opposed legislation), the
American Petroleum Institute (API), and environmental interests such as the Natural
Resources Defense Council (NRDC) and American Lung Association (ALA). API, NRDC, and ALA
now support a set of principles adopted by the Northeast States for Coordinated Air Use
Management (NESCAUM). NESCAUM represents the air pollution program directors in New York,
New Jersey, and the 6 New England states. It has played a significant role in building
consensus among the Northeastern states required to use reformulated gasoline. In a report
issued in August 1999,(45) and in
subsequent principles adopted by a task force of state air and water officials, NESCAUM
has called for:
- repealing the two percent oxygen mandate for RFG in the Clean Air
- phasing down and capping MTBE content in all gasoline;
- clarifying state and federal authority to regulate, and/or eliminate,
MTBE or other oxygenates if necessary to protect public health or the environment;
- maintaining the toxic emissions reductions benefits achieved to date
by the RFG program (Note: the reductions achieved are substantially higher than
the reductions required by the Clean Air Act);
- promoting consistency in fuel specifications through the timely
implementation of effective federal requirements; and
- providing adequate lead time for the petroleum infrastructure to
insure adequate fuel supply and price stability.
While support for waiving the oxygenate requirement seems to be
building among environmental groups, the petroleum industry, and states, a potential
obstacle to enacting legislation lies among agricultural interests. About 6% of the
nation's corn crop is used to produce the competing oxygenate, ethanol. If MTBE use is
reduced or phased out, but the oxygenate requirement remains in effect, ethanol use would
likely soar, increasing demand for corn. Conversely, if the oxygenate requirement is
waived by EPA or by legislation, not only would MTBE use decline, but so, likely, would
demand for ethanol. As a result, Members, Senators, and Governors from corn-growing states
have taken a keen interest in MTBE legislation. Unless their interests are addressed, they
might pose a potent obstacle to its passage.
Current Statutory Authority
Clean Air Act Authorities.
Whether EPA has authority to take steps to regulate or ban MTBE use in the absence of
specific congressional authorization is a question some have raised as the Agency and
Congress consider their responses to MTBE contamination. The answer to that question is
not a straight yes or no. EPA does have authority under Section 211(c) of the Clean Air
Act to regulate fuel and fuel additives, and under Section 303 of the Act to take
emergency action to protect public health, welfare, or the environment. In theory, if the
Agency determined that MTBE posed what it considered a significant threat to air quality,
water quality, or human health, it could take action to restrict or ban the substance
without new legislative authority.
To do so, however, would require findings that EPA is unlikely to be
able to justify. Section 211(c), for example, gives the Administrator authority to
regulate or prohibit the sale of fuel additives if she determines that any emission
product of such additives contributes "to air pollution which may reasonably be
anticipated to endanger the public health or welfare...." Since the major concern
over MTBE is contamination of drinking water, this clause does not appear to provide the
Section 303 provides broader authority, allowing the Administrator
to seek a restraining order (and temporarily to issue such orders on her own authority) in
cases where "a pollution source or combination of sources ... is presenting an
imminent and substantial endangerment to public health or welfare, or the
environment...." In EPA's assessment, however, studies to date suggest that MTBE is
less toxic than certain other gasoline components, such as benzene, so it might be
difficult to justify a finding of imminent and substantial endangerment.
Toxic Substances Control Act Authority.
One other law provides what might appear to be useful regulatory authority. Section 6 of
the Toxic Substances Control Act (TSCA) allows EPA to prohibit or limit the production or
distribution in commerce of a chemical substance. But to use this authority, the Agency
would have to conclude that MTBE posed an unreasonable risk to health or the environment.
This is a difficult standard to meet. In the 24 years since TSCA was enacted, the Agency
has successfully invoked this authority against fewer than half a dozen classes of
Among the states, California has arguably been the most active in
addressing MTBE issues. Actions taken by the State Legislature and the Governor have
helped propel the issue to national prominence. Legislation, signed October 8, 1997,
required the state to set standards for MTBE in drinking water, and required the
University of California to conduct a study of the health effects of MTBE and other
oxygenates and risks associated with their use. The UC report, which was issued in
November 1998, recommended a gradual phase-out of MTBE from gasoline in California.(46) Based on the report and on public
hearings, Governor Davis issued a finding that "on balance, there is a significant
risk to the environment from using MTBE in gasoline in California," and required the
state's Energy Commission to develop a timetable for the removal of MTBE from gasoline at
the earliest possible date, but not later than December 31, 2002.(47) The Governor also required the California Air Resources
Board (CARB) to make a formal request to U.S. EPA for a waiver from the requirement to use
oxygenates in reformulated gasoline and required three state agencies to conduct
additional research on the health and environmental impacts of ethanol, the most likely
substitute for MTBE.
The waiver request has resulted in months of negotiation between EPA
and CARB, with EPA initially expressing skepticism that it had authority to grant a waiver
under the circumstances.(48) The
Clean Air Act authorizes waiver of the RFG oxygenate requirement only if the Administrator
determines that oxygenates would prevent or interfere with the attainment of a National
Ambient Air Quality Standard.(49) A
decision on the request is not expected before summer 2000.
A new MTBE issue emerged in the wake of Governor Davis' decision to
phase out the use of MTBE in gasoline in California. On June 15, the Methanex Corporation,
a Canadian company that produces methanol in the United States and Canada, notified the
U.S. Department of State of its intent to institute an arbitration against the United
States under the investor-state dispute provisions of the North American Free Trade
Agreement (NAFTA), claiming that the phase-out of MTBE ordered by the Governor of
California March 25, 1999 breaches U.S. NAFTA obligations regarding fair and equitable
treatment and expropriation of investments, entitling the company to recover damages which
it estimates at $970 million.(50)
Chapter 11, Article 1110, of the NAFTA requires the United States,
Canada, and Mexico to treat each other's investors and investments in accordance with the
principles set out in the Chapter. It also allows these investors to submit to arbitration
a claim that a NAFTA party has breached Chapter 11 obligations and to recover damages from
any such breach. The NAFTA requires the disputing investor to deliver a written notice of
its intent to the NAFTA country involved at least 90 days before the claim is submitted to
arbitration under the appropriate international arbitral rules. NAFTA also requires 6
months to elapse "since the events giving rise to a claim" before the investor
may proceed with arbitration. Methanex stated that this period would end 6 months from the
date the Governor's order was announced or September 25. Because no settlement was reached
by that date, the matter proceeded to arbitration.
Controversy continues to surround the use of MTBE in gasoline.
Research conducted to date suggests that the air quality benefits of its use are
substantial. However, increasing detections of MTBE in ground and surface water, and
particularly in municipal and private drinking water wells, have raised significant
concerns about the use of this oxygenate. Research on MTBE and other oxygenates is ongoing
and should provide additional information to help advance the current understanding of
MTBE-related health and environmental issues.
Legislation introduced in Congress initially focused on the limited
issue of MTBE use in California, where federal requirements have prevented refiners from
adopting a more flexible approach permitted by state regulations. Modifying the federal
requirements as they pertain to California (as provided by H.R. 11 / S. 266) has substantial
support among the California congressional delegation. As MTBE has been detected in
drinking water wells in other parts of the country, and in surface waters in addition to
underground sources, broader legislation has been introduced. These bills emerge in a
context of ongoing activities aimed at reducing releases of petroleum, generally, or MTBE,
specifically. The effectiveness and sufficiency of these efforts (such as the continued
implementation of UST regulations and stricter emissions standards for marine engines) add
complexity to the debate.
Developments in the states, particularly California and the
Northeast, are now driving a reconsideration of the petroleum industry's reliance on MTBE
as the principal means of meeting RFG requirements. This reconsideration, by refiners and
by policy-makers at the state level, will continue to influence congressional
consideration of the issue in coming months.
requirements for reformulated gasoline (RFG), to reduce air toxics and the emissions that
contribute to smog formation, are found in Section 211(k) of the Clean Air Act. Separate
requirements for oxygenated fuel, to reduce carbon monoxide formation, are contained in
Section 211(m). Of the two programs, that for RFG has a much larger impact on the
composition of the nation's gasoline, because RFG requirements are in effect year-round
and apply to a larger percentage of the country. The Section 211(m) requirements, by
contrast are in effect during winter months only and affect a small percentage of the
nation's gasoline. Ethanol is the primary oxygenate used in winter oxygenated fuels and
MTBE the primary oxygenate used in RFG, although either can be used in both fuels.
"Reformulated Fuels Help Curb Peak Ozone Levels in California," Daily
Environment Report, November 6, 1996, pp. A-1 and A-2.
on Ozone-Forming Potential of Reformulated Gasoline, National Research Council, Ozone-Forming
Potential of Reformulated Gasoline, May 1999, p. 5. The NAS study concluded that
other characteristics of RFG, notably "lowering the Reid Vapor Pressure (RVP) of the
fuel, which helps depress evaporative emissions of VOC [volatile organic compounds], and
lowering the concentration of sulfur in the fuel, which prevents poisoning of a vehicle's
catalytic converter" result in a reduction of about 20% in VOC emissions.
Environmental Protection Agency, Blue Ribbon Panel on Oxygenates in Gasoline, Executive
Summary and Recommendations, July 27, 1999, Appendix A. Available at Internet website: http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm.
Office of the President, National Science and Technology Council, Interagency
Assessment of Oxygenated Fuels, Washington, D.C., June 1997, p. iv. (Available at
Internet website http://wwwsd.cr.usgs.gov/nawqa/pubs/abstracts/zogorski/ostp.exec.sum.html)
Referred to hereafter as the OSTP Report. The report expressed some hesitation about its
conclusions, particularly regarding the impacts of MTBE in colder weather. It also noted
methodological difficulties in identifying statistically significant reductions smaller
than 10%, and recommended additional research.
6. (back)U.S. EPA
Response to Interagency Assessment of Oxygenated Fuels, undated, p. 2.
Applications International, Inc., for the Renewable Fuels Association and the Oxygenated
Fuels Association, Regression Modeling of Oxyfuel Effects on Ambient CO Concentrations,
Final Report, January 8, 1997, p. 1.
Report, p. vi. The report did suggest that "greater attention should be given to the
potential for increased symptoms reporting among workers exposed to high concentrations of
oxygenated fuels containing MTBE," however.
Environmental Protection Agency. Drinking Water Advisory: Consumer Acceptability
Advice and Health Effects Analysis on Methyl Tertiary-Butyl Ether (MTBE).
EPA-822-F-97-009, December 1997. p. 1-2. This and other health effects information is
available at Internet website: [ http://www.epa.gov/OST/drinking/mtbe.htm].
Arturo, et al., Health and Environmental Assessment of MTBE, Report to the
Governor and Legislature of the State of California as Sponsored by SB 521, Volume I,
Summary and Recommendations, University of California, November 1998. p. 35.
for example, OSTP Report, Executive Summary, pp. 2-5 - 2-13.
Environmental Protection Agency. MTBE in California Drinking Water, January 21,
2000, available at Internet website:
per liter(g/L) are equivalent to parts per billion (ppb) for fresh water.
Department of Human Services, Department of Environmental Protection, and Department of
Conservation. The Presence of MTBE and Other Gasoline Compounds in Maine's Drinking
Water, A Preliminary Report. October 13, 1998. 24 p.
Blue Ribbon Panel on Oxygenates in Gasoline. Executive Summary and Recommendations. July
27, 1999. Summary and full report are available at Internet website: http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm.
Robert, P. Kostecki, and D. Leonard. Study Reports LUST Programs are Feeling Effects
of MTBE Releases. Soil and Groundwater Cleanup, Aug./Sept. 1998. p. 15-19.
Environmental Protection Agency, MTBE Briefing Paper, p. 17.
Happel, Anne, E. H. Beckenbach, and R. U. Halden. An Evaluation of MTBE Impacts to
California Groundwater Resources. Lawrence Livermore National Laboratory and the
University of California, Berkeley. June 11, 1998. p. iv.
Geological Survey. Data summary submitted to the EPA Blue Ribbon Panel on the Use of MTBE
and Other Oxygenates in Gasoline. January 22, 1999. Available at Internet website: http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm#Presentations.
more USGS research information see, U.S. Geological Survey. MTBE in the Nation's
Ground Water. National Water-Quality Assessment (NAWQA) Program Results. April 29,
1999, available at Internet website: http://wwwsd.cr.usgs.gov/nawqa/vocns/.
Drinking Water Advisory, p. 2. By late 1999, 4 states had adopted health-based drinking
water standards for MTBE ranging from 20-40 parts per billion (ppb) (equivalent to g/L)
to 70 ppb; California had adopted a secondary standard (based on aesthetic qualities) of 5
ppb; and 14 states had adopted guidelines or action levels ranging from 10 ppb
(aesthetically-based) to 240 ppb (health-based).
25. (back) 64 Federal
Register 50555, September 17, 1999. The law requires monitoring by all large public
water systems (serving more than 10,000 people) and requires a representative sampling of
this schedule might be shortened. Since 1996, SDWA has authorized EPA to promulgate an
interim health-based drinking water standard for any contaminant that the Administrator
determines presents an urgent threat to public health (1412(b)(1)(D)).
UST leak prevention program complements a federal/state program for cleaning up releases
from leaking tanks. For more information on these programs, see CRS Report 97-471, Leaking Underground Storage Tank Cleanup Issues,
February 17, 1999, 6 p.
MTBE Blue Ribbon Panel home page, which includes a list of panel members and their
affiliations, can be found at http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm.
29. (back) Blue
Ribbon Panel on Oxygenates in Gasoline, "Panel Calls for Action to Protect Water
Quality While Retaining Benefits from National Clean Burning Gas," press release,
July 27, 1999, p. 2. Available at http://www.epa.gov/oms/consumer/fuels/oxypanel/blueribb.htm.
Regarding dissenting views, one member endorsed the water protection reforms but disagreed
with the recommendation to limit the use of MTBE, noting that the panel had not identified
any increased public health risk associated with MTBE use in gasoline; another member
supported maintaining the existing oxygenate standard for the air quality benefits.
by EPA Administrator Carol Browner on Findings by the EPA's Blue Ribbon MTBE Panel, July
26, 1999, available on the Blue Ribbon Panel home page, previously cited.
the water perspective, ethanol and other alcohols have another advantage: they generally
do not persist in ground water as they are readily biodegraded. U.S. Geological Survey. MTBE
in the Nation's Ground Water. National Water-Quality Assessment (NAWQA) Program Results.
April 29, 1999. See Internet website: http://wwwsd.cr.usgs.gov/nawqa/vocns/.
Ribbon Panel Report, p. 8.
for example, "Ethanol-Blended RFG May Cause Small Hike in Gasoline Plume Size," Mobile
Source Report, December 2, 1999, p. 11, or "Experts Charge Cal/EPA Rushing
Approval of Ethanol in RFG," Inside Cal/EPA, January 14, 2000, p. 1.
Air Resources Board, Water Resources Control Board, and Office of Environmental Health
Hazard Assessment. Health and Environmental Assessment of the Use of Ethanol as a Fuel
Oxygenate. Report to the California Environmental Policy Council in Response to
Executive Order D-5.-99. Dec. 1999. Volume 1, Executive summary. P. 1-22. Report is
available at Internet website: http://www-erd.llnl.gov/ethanol/).
additional information on ethanol, see CRS Report RL30369, Fuel Ethanol: Background
and Public Policy Issues.
of Duane B. Bordvick, Vice President, Environmental and External Affairs, Tosco, to John
D. Dunlap III, Chairman, California Air Resources Board, October 17, 1997.
"Chevron Seeks Changes to Reformulated Gasolines," Press Release, Chevron
Corporation Public Affairs Department, December 1, 1997.
from EPA Assistant Administrator Bob Perciasepe to Thomas V. Skinner, Director, Illinois
Environmental Protection Agency, September 9, 1999, attached to Testimony of Tom Skinner,
Subcommittee on Energy and Environment, Committee on Science, U.S. House of
Representatives, Hearing on Reformulated Gasoline (RFG) - (Part I), September 14, 1999.
The proposed rule was reported to be undergoing review at the Office of Management and
Budget in late February. See "Proposal Expected to Increase Ethanol, Lower MTBE Use
in Reformulated Gasoline," Daily Environment Report, February 24, 2000, p.
its report reviewing the ozone-forming potential of reformulated gasoline, the National
Research Council concluded that, in addition to VOCs, carbon monoxide (CO) emissions act
as precursors of ozone, contributing about 20% of the overall reactivity of motor vehicle
emissions. Oxygenated fuels, whether using MTBE or ethanol, reduce these CO emissions.
According to the study, however, "some data indicate that exhaust emissions of CO
from ... RFG blended with ethanol are somewhat lower than those of ... MTBE-blended
RFG." See Committee on Ozone-Forming Potential of Reformulated Gasoline, National
Research Council, Ozone-Forming Potential of Reformulated Gasoline, Washington,
May 1999, p. 6.
related action, on August 4, 1999, the Senate adopted an amendment to the FY2000
agricultural appropriations bill [S. 1233], offered by
Senator Boxer, expressing the sense of the Senate that use of MTBE should be phased out.
Environmental Protection Agency, MTBE Briefing Paper, p. 6.
U.S. House of Representatives. Committee on Commerce. Subcommittee on Health and
Environment. Reformulated Gasoline. Hearing. May 6, 1999. Serial No. 106-18.
Washington. U.S. Government Printing Office. 1999. 129 p. The same subcommittee held a
hearing in the 105th Congress on similar legislation (Implementation of the
Reformulated Gasoline Program in California, April 22, 1998,. Serial. No. 105-94).
45. (back)See Summary
of RFG/MTBE Findings and Program Recommendations, August 1999, available at web site http://www.nescaum.org/RFG/RFGPh2.shtml
Keller, Arturo, et al., Health & Environmental Assessment of MTBE, Report to
the Governor and Legislature of the State of California As Sponsored by SB 521, November
1998. Available on the web at http://www.tsrtp.ucdavis.edu/mtberpt/homepage.html.
Gray Davis, Executive Order D-5-99. The Executive Order can be found on the Governor's
Internet site at http://www.ca.gov/s/governor/d599.html.
For a news account, see "Davis Moves To Phase Out MTBE Additive: Oil Industry To Hear
Governor's Plan Today," San Francisco Chronicle, March 25, 1999, p. A1.
California is not the only state to consider phasing out MTBE. Faced with similar water
quality concerns, Maine (which is not required to use RFG, but had chosen to do so) opted
out of the RFG program in October 1998 and subsequently chose to substitute a
low-volatility gasoline to provide similar reductions in emissions of ozone-forming
statements of Robert Perciasepe, Assistant Administrator for Air and Radiation, U.S. EPA,
at the May 6, 1999 House Commerce subcommittee hearing, previously cited, pp. 47-52.
waiver language is found in Section 211(k)(2)(B).
is a major component of MTBE and is Methanex's only product. The California market for
MTBE reportedly accounts for roughly 6% of global demand for methanol.
Return to CONTENTS section of this Long Report.
These CRS reports were produced by the Congressional Research Service, a branch of the Library of Congress providing nonpartisan research reports to members of the House and Senate. The National Council for Science and the Environment (NCSE) has made these reports available to the public at large, but the Congressional Research Service is not affiliated with the NCSE or the National Library for the Environment (NLE). This web site is not endorsed by or associated with the Congressional Research Service. The material contained in the CRS reports does not necessarily express the views of NCSE, its supporters, or sponsors. The information is provided "as is" without warranty of any kind. NCSE disclaims all warranties, either express or implied, including the warranties of merchantability and fitness for a particular purpose. In no event shall NCSE be liable for any damages.