California Air Resources Board

SACRAMENTO – The California Air Resources Board (ARB) acted today to postpone by one year the mandated phase-out of MTBE in the State's gasoline.

"This action gives those refiners who are not ready to fully remove MTBE extra time to adjust to the phase-out and thereby protect California consumers from disrupted supplies and price spikes," said Dr. Alan Lloyd, ARB Chairman.

The ARB Board, meeting in Sacramento, voted to extend the MTBE phase-out deadline from December 31, 2002 to December 31, 2003. This was done as a result of the Governor's Executive Order D-52-02. The order directed ARB to postpone for one year the requirement to remove MTBE from California�s gasoline.

The Governor's original Executive Order, on March 25, 1999, ordered the removal of MTBE from gasoline by December 31, 2002 because MTBE was found to be contaminating some drinking water supplies.

MTBE or Methyl Tertiary-Butyl Ether was first added to California's gasoline in the mid 1980's to enhance octane. Its use was expanded in 1991 to control high winter carbon monoxide (CO) levels in some areas of the state. The program expanded, and MTBE has been added to most of California's gasoline since 1995, largely as a result of federal clean-air rules that require oxygenates (either MTBE or ethanol) in gasoline under the theory that they reduce emissions from motor vehicles.

California has submitted evidence to the U.S. Environmental Protection Agency (EPA) that the cleanest possible gasoline can be blended without the use of oxygenates. The state's request for an EPA waiver from the oxygenate requirement was rejected last year. California is now pursuing a legal challenge to the EPA's decision.

By the end of 2002, the federal oxygen requirement will apply to about 80 percent of the gasoline sold in California.

Under the federal oxygenate requirement, the only viable alternative to MTBE is ethanol. However, the bulk of ethanol would have to be shipped in from out of state, adding to the expense of gasoline and leaving California open to supply disruptions.

Federal legislation, pending in Washington, would alter the requirement in 2004. On March 15, Governor Davis ordered the one-year extension to coordinate with the effective date of the proposed law and make sure the entire California refining industry is prepared for the changeover and avoid possible gasoline supply disruptions.

"We continue to hope that the federal government will take the path of sound science and release California from the oxygenate requirement," Dr. Lloyd said.

In addition to the one year extension allowing refiners to continue using MTBE, the Board's action today also made other technical adjustments to gasoline refining regulations in order to align them with the extension.