In 1990, Congress got in the act of mandating gasoline formulas, roiling fuel markets ever since. While federal gasoline mandate were touted for their environmental benefits, in some cases they have caused significant environmental harm, frustrating air-pollution-control efforts and contaminating drinking water. But do not think for a minute Congress has learned its lesson. The pending energy bill continues foolish congressional fuel-market interventions.
The 1990 Clean Air Act Amendments included the first federal fuel mandates. This law required gasoline sold in areas with high carbon-monoxide levels to include oxygenates; fuel additives increase fuel oxygen content. The primary oxygenates are methyl tertiary butyl ether (MTBE) and ethanol, a corn-based alcohol fuel. Adding oxygenates facilitates more complete fuel combustion, thereby improving fuel economy and reducing tailpipe emissions of carbon monoxide–at least in older cars; the pollution controls on newer vehicles largely perform these functions by themselves. The oxygenated fuel requirement increased the price of gasoline, but it also helped reduce carbon-monoxide emissions for a time, until the vast majority of cars on the road had modern pollution controls.
The 1990 amendments also required the use of reformulated gasoline in areas suffering from high levels of ground-level ozone, a.k.a urban smog. Due to the pressure of farm-state delegations eager to increase the market for ethanol, the statutorily mandated formula for reformulated gas includes an oxygen-content requirement as well. Yet whereas increasing fuel-oxygen content reduces emissions of carbon monoxide, mandating the use of oxygenates in reformulated gas offers no equivalent benefit for emissions of hydrocarbons and other ozone-forming substances. To the contrary, in some cases the mandatory use of oxygenates can make the ozone problem worse.
Although requiring the use of oxygenates in reformulated gasoline was supposed to help reduce urban ozone levels, the National Research Council found it does no such thing. Such mandates had little, if any, impact on urban ozone levels, the group concluded. In some cases, the mandates can even cause environmental harm. Adding ethanol to gasoline can actually increase summertime ozone levels, as ethanol is significantly more volatile than gasoline, increasing evaporative emissions of the volatile organic compounds that contribute to ozone formation. Were that not bad enough, making ethanol from corn is an incredibly energy-intensive process. “As a result, each gallon of ethanol has already caused more emissions, as compared to a gallon of gasoline, before it ever enters your gas tank,” reports environmental analyst Ben Lieberman of the Competitive Enterprise Institute. Although touted as a way to achieve “energy independence,” a broad ethanol mandate can actually increase overall energy use.
Ethanol use under the 1990 amendments was not as widespread as some hoped because it is typically more expensive than the primary alternative, MTBE. Yet MTBE has had drawbacks of its own. MTBE is highly soluble in water, spreading quickly and contaminating groundwater where it is not adequately contained. Due to occasional spills and leaking underground gasoline-storage tanks, MTBE water pollution is now widespread. The oxygenate has been detected in drinking-water supplies in nearly two-dozen states, and has contaminated groundwater in at least a dozen more. The contamination is quite widespread. Some 500 wells are contaminated with MTBE in the state of Michigan alone. Although reported contamination levels are far below the levels considered dangerous by the Environmental Protection Agency, and there is no clear evidence that this pollution causes a health risk, the taste and smell of MTBE renders contaminated water undrinkable, even at very low concentrations.
With MTBE contaminating local water systems from coast-to-coast, the tort lawyers are now seeking to cash in. Individuals, municipalities, and local water systems have filed suits in several states. A suit in south Lake Tahoe was settled for a reported $69 million. On October 6, New Hampshire got into the act, announcing a suit against over 20 oil companies for all cleanup and investigation costs related to the fuel additive. More suits are likely. The personal injury firm of Napoli, Kaiser & Bern even launched a new website to encourage legal claims alleging personal harm from MTBE.
Late last week, Republican congressional leaders reportedly agreed to protect MTBE manufacturers from further suits. Afraid that such a provision will soon become law, the Association of Metropolitan Water Agencies recently sent a memorandum to its members encouraging that such suits get filed before the liability protection can be enacted into law. Even where MTBE contamination has yet to be discovered, AMWA suggests its members may wish to file suit. To facilitate such litigation, the memo further recommends water systems contact Baron & Budd, arguably the nation’s most notorious tort plaintiffs’ firm. The name and number of a specific attorney are provided.
Irrespective of whether the liability protection passes, MTBE’s days as a gasoline additive are surely numbered. Several states, including California, have already banned MTBE use, and the energy bill may phase it out altogether. But Congress is not ready to remove its hand from your gas tank. The federal oxygenate mandates are likely to remain, ensuring a continued market for ethanol. Worse, corn-state senators are demanding federal mandates that will dramatically increase ethanol use in the years to come. As ethanol can cost twice as much as the equivalent amount of gasoline, an expanded ethanol mandate means higher prices for consumers at the pump, not to mention increased corn prices and reduced federal highway revenues (due the ethanol tax credit) for little if any environmental benefit.
Federal meddling in fuel design was supposed to clean the air and promote energy security. Instead, it increased fuel prices, contributed to groundwater pollution, and, in some cases, increased the air-pollution problems it was supposed to solve. There’s no need to replace one generation of fuelish mandates with another. Congress should remove the federal oxygenate requirements, and then leave our gas tanks alone.
–NRO Contributing Editor Jonathan H. Adler is an assistant professor of law at the Case Western Reserve University School of Law.