Renewable Fuels and MTBE: A Comparison of Provisions in the Energy Policy Act of 2005 (P.L. 109-58 and H.R. 6)

Publication Date: October 2006

Publisher: Library of Congress. Congressional Research Service

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Research Area: Energy

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Abstract:

In the Energy Policy Act of 2005 (P.L. 109-58, H.R. 6), Congress established a requirement for the use of renewable fuels and revised Clean Air Act and underground storage tank regulatory requirements to address public health and environmental concerns associated with the use of fuels and fuel additives, especially methyl tertiary butyl ether (MTBE). Much contentious debate centered on the issue of how to address water quality problems associated with MTBE use while preserving air quality benefits of reformulated gasoline and, at the same time, promoting the use of renewable fuels (especially ethanol). This report compares the renewable fuel and MTBE provisions in the House and Senate versions of H.R. 6 with the provisions Congress ultimately agreed to in Title XV of P.L. 109-58.

Among the key fuel-related provisions, the Energy Policy Act of 2005 repealed the Clean Air Act requirement that reformulated gasoline (RFG) contain at least 2% oxygen -- a requirement that led refiners and importers to use MTBE and, to a lesser extent, ethanol in their RFG. This provision was advanced by both the House and Senate, largely in response to drinking water contamination problems associated with the use of MTBE.

In place of this requirement, the Act established a Renewable Fuel Standard (RFS) requiring the use of 7.5 billion gallons of renewable fuel by 2012. This requirement is being met primarily through the use of ethanol. Also consistent with the House and Senate bills, P.L. 109-58 requires that the reductions in emissions of toxic substances achieved by RFG be maintained and allows ethanol credit trading among refiners and importers of fuels.

Major issues that the various versions of the bill treated differently include whether to grant MTBE producers a safe harbor from product liability lawsuits (the House version did so, whereas the Senate version and the enacted version did not); whether to phase out continued use of MTBE in motor fuels (both the House and Senate versions would have done so, with exceptions, whereas the enacted bill does not); and whether to require manufacturers of fuels and fuel additives to evaluate their impacts on public health and the environment (the Senate version and the enacted version did so, the House version did not).

The Energy Policy Act also amends the underground storage tank (UST) regulatory program to specifically authorize EPA and states to use funds appropriated from the Leaking Underground Storage Tank (LUST) Trust Fund to address fuel leaks involving MTBE and other oxygenated fuel additives. The law also expands the leak prevention provisions of the UST program and imposes new requirements on states, EPA, and tank owners.