MTBE: Refiners Damned If They Use It, Damned If They Don’t

MTBE: Refiners Damned If They Use It, Damned If They Don’t
March 1, 1999

California gasoline refiners, distributors, and retailers have found themselves in an impossible situation as a result of the Environmental Protection Agency’s (EPA) failure to do its homework on MTBE (methyl tertiary-butyl ether). Refiners have little choice but to continue using the additive . . . yet they face rapidly mounting liability exposure if they do.

The problem began with poorly crafted 1990 amendments to the Clean Air Act, which led EPA to mandate the use of oxygenates in gasoline in metropolitan areas--including southern California, especially Sacramento and Lake Tahoe--out of compliance with the agency’s clean air standards. Taking EPA’s direction further, California state government required oxygenate use statewide.

Of the two primary oxygenate types, alcohols and ethers, California refiners were stuck with the latter. Alcohol additives, primarily ethanol, are produced from corn in the Midwest. Even if there were enough ethanol to meet California’s needs, getting it there is not economically feasible. Unlike other fuel products transported over long distances, ethanol cannot be shipped through pipelines: alcohols combine with and cannot be separated from water, which is commonly found in pipelines.

The Liability Trap

Today, with MTBE polluting California’s groundwater, Chevron, Mobil, TOSCO, Arco, and other refiners are being sued to remove from the water supply a chemical they were reluctant to use in the first place. Not only did some industry scientists contend it would be of little value in preventing air pollution (indeed, of no value in later model cars), EPA sources confirm that the agency’s own scientists told administrators before they forced its use that MTBE wouldn’t work.

Yet it is the oil companies--not EPA--who are now being sued by California’s Communities for a Better Environment. The suit, according to the organization’s legal director, Richard Drury, was filed last fall, is now in discovery, and is on a fast track to go to trial within a year.

In Santa Monica--a Los Angeles suburb forced to close half of its wells due to MTBE pollution--Mobil Oil has reached a consent agreement to remove the additive from the aquifer from which the city draws its water. While city and company officials were unwilling to discuss the project’s expected cost, Bob Brooks of Ward’s Engine and Technology Update notes the technology for removing MTBE is very costly. He projects the clean-up will take between 10 and 15 years.

California, where MTBE was first used in significant amounts, appears to be just the tip of the industry’s liability iceberg. MTBE has been found in groundwater in every state. Maine’s governor has formally asked that his state be exempted from MTBE use. Environment News has learned that a class-action suit has been filed in North Carolina against manufacturers and distributors of the fuel additive.

Industry Response Varies

Industry’s response to the MTBE problem has varied--from virtual capitulation, as the Mobil/Santa Monica situation would seem to indicate; to bold, innovative solutions that provide further evidence that if EPA had done its homework, there would be no MTBE problem today.

Chevron’s oxygenate-free gasoline. Chevron Oil Company has launched one of the most aggressive oil industry efforts to eliminate use of MTBE. Chevron has developed an oxygenate-free gasoline that meets all EPA performance standards for smog-producing emissions. California has given the company permission to sell its new fuel throughout areas where the state had formerly mandated use of oxygenates (that is, most of the state). However, oxygenated fuel is still required by federal EPA mandate in southern California, Sacramento, and Lake Tahoe.

Chevron produces MTBE-free fuel at its Richmond Plant near San Francisco and is required to mix its gas with 11 percent MTBE, by volume, in its El Segundo refinery in the L.A. Basin. According to Chevron spokesman Fred Gorell, there is no difference between the two fuels in their emission of smog-producing chemicals. Gorell acknowledged that MTBE fuel produces less carbon monoxide in some vehicles, but noted that no oxygenates are needed to lower carbon monoxide emissions in cars made after 1989, because they automatically sense and adjust for oxygen in exhaust gases. Ward’s Brooks contends most cars built after 1981 do this as well. According to Gorell, Chevron could probably solve the carbon monoxide problem without using oxygenates, but EPA would not allow them to sell such a product.

TOSCO’s alternative. TOSCO has begun to test fuel with ethanol used as an oxygenate. The aforementioned problems of ethanol availability and transport, however, make this option less likely to become a marketable success in California.

Arco’s spin-off. In a move seen by some industry observers to indicate that MTBE’s days are numbered, Arco--by far the country’s largest producer of the chemical--has recently divested itself of its MTBE production facilities. Though the company continues to use MTBE in its gasoline, Arco clearly feels it has good reason to no longer own the very profitable facilities that produce it. When asked about the matter, company officials would not comment beyond simply confirming that the divestiture had taken place.

Legislative Opposition to MTBE Persists

Through the last two Congresses, and continuing into the new Congress, Rep. Brian Bilbray (R-California) has sponsored legislation that would effectively end the use of MTBE and other oxygenates in California.

Bilbray’s bill, H.R. 11--one of the first pieces of legislation this Congress will consider--takes the common-sense position that EPA administrators themselves might have adopted if they had considered the work of their own scientists. H.R. 11 focuses on results, not the ingredients of gasoline, by releasing the state from the mandate to use oxygenates, so long as the state’s own clean air standards--which are even more stringent than those set by EPA--are met. Sen. Diane Feinstein (D-California) will introduce companion legislation in the Senate.

“The beauty of H.R. 11 is the fact that it is content-neutral and outcome-based,” Bilbray told Environment News. “With this bill, by keeping the bar of the state’s standards high, and without mandating the use or non-use of specific ingredients, California will be able to continue to improve on its tradition of clean air success, and respond appropriately to previously unforeseen concerns which may be shown by sound science to negatively impact the public health and our environment.”