WASHINGTON (AP)--Ethanol will keep its largest market for at least another year, even as the long-term future of the corn-based gasoline additive appears likely to remain unresolved for quite some time.
A federal anti-pollution program requires gasoline sold in cities with smog problems, like Chicago and Milwaukee, to contain an oxygenate that makes fuel burn cleaner. In most places, that additive is petroleum-based MTBE, or methyl tertiary butyl ether. Ethanol, also an oxygenate, is used primarily in the Midwest.
But the government has tightened its clean-air goals, making ethanol unable to meet the requirements starting this summer unless oil refiners blend it with a more expensive gasoline.
It appears that most producers will do that this year, Illinois lawmakers said April 13 after meeting with Environmental Protection Agency Administrator Carol Browner and Secretary of Agriculture Dan Glickman.
David Sykuta, executive director of the Illinois Petroleum Council, confirmed that means ethanol will still be sold in the Chicago and Milwaukee areas for the time being.
That only solves the problem in the short term for agribusiness companies that make ethanol and corn growers that depend on it to boost their bottom line.
Ethanol boosters still are hoping the EPA will give the fuel credit for carbon monoxide reductions that offsets its problems in hotter months, when it evaporates more readily. That would allow ethanol to meet pollution-reduction targets without added expense.
Sens. Dick Durbin, D-IL, and Peter Fitzgerald, R-IL, said Browner has pledged to do that while acknowledging the process has taken longer than expected.
Meanwhile, the controversy over MTBE's tendency to show up in drinking water has farm-state lawmakers--including those in the Illinois delegation--divided over the best way to move forward.
The Clinton Administration is moving to ban MTBE. That would be a boon for the ethanol industry, although California and Northeastern states are pushing Congress to repeal the oxygenate requirement at the same time so they aren't forced to use the more expensive ethanol.
So the Administration wants Congress to replace the oxygenate requirement with a mandate that a certain amount of fuel used nationwide be made from renewable sources, like corn or other plant matter.
Durbin appeared to favor that approach.
But other lawmakers, like Fitzgerald, say a better way to guarantee demand for ethanol would be to ban MTBE without eliminating the oxygenate requirement or adding a renewable fuels mandate. Browner told the lawmakers that would likely draw a veto.
Oil companies, who want maximum flexibility, want neither the oxygenate nor renewable fuels requirement.
Farm-state lawmakers have always spoken with one voice about ethanol. Now, many are concerned their efforts to preserve--and boost--ethanol's use will be hampered by the disagreement.
"We've got to sit down and map out a common strategy," Durbin said.
The lawmakers also were skeptical of a highly divided Congress' ability to produce anything on the complex issue this year.
"Trying to get a bill out of here before the end of the session is practically impossible," said Rep. Ray LaHood, R-IL.