Renewable Fuels and MTBE: Side-by-Side Comparison of H.R. 6 and S. 2095

Renewable Fuels and MTBE: Side-by-Side Comparison of H.R. 6 and S. 2095

Order Code RL31912
CRS Report for Congress
Received through the CRS Web
Renewable Fuels and MTBE: Side-by-Side
Comparison of H.R. 6 and S. 2095
Updated March 17, 2004
James E. McCarthy
Specialist in Environmental Policy
Resources, Science, and Industry Division
Mary E. Tiemann
Specialist in Environmental Policy
Resources, Science, and Industry Division
Brent D. Yacobucci
Analyst in Energy Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

Renewable Fuels and MTBE: Side-by-Side Comparison
of H.R. 6 and S. 2095
Summary
This report compares the energy bill (H.R. 6) conference report provisions
dealing with ethanol and with the gasoline additive methyl tertiary butyl ether
(MTBE) to the House and Senate versions of the same legislation, as well as a
substitute bill offered in the Senate (S. 2095). The House passed its version of H.R.
6 April 11, 2003; the Senate, July 31. The conference committee approved its version
November 17; the House agreed to the conference report November 18. On February
12, 2004, S. 2095 was introduced in the Senate. Except for one provision, S. 2095
and the H.R. 6 conference report titles on renewable fuels and MTBE are identical.
All three versions of H.R. 6, as well as S. 2095, would repeal the existing 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. In place of this requirement, all versions would provide a
major new stimulus for the use of ethanol – a provision that the annual production
of motor fuels contain at least 5 billion gallons of renewable fuel (more than double
the current production of ethanol) in roughly 10 years. In addition, the bills contain
similar provisions that: require that the reductions in emissions of toxic substances
achieved by RFG be maintained; authorize grants to assist merchant MTBE
production facilities in converting to the production of other fuel additives (although
the conference report and S. 2095 provide nearly triple the amount provided by either
the House or Senate versions of H.R. 6); authorize loan guarantees for the
construction of facilities to produce ethanol from municipal solid waste; and allow
ethanol credit trading among refiners and importers of fuels.
Major issues the bills handle differently include: whether to ban MTBE (the
Senate bill would have done so within 4 years, with some exceptions, while the
conference report and S. 2095 allow 11 years and give the President authority to
determine that it should not be banned); whether to provide a “safe harbor” from
product liability lawsuits for producers of ethanol and other renewable fuels (all
versions of H.R. 6 do, S. 2095 does not); whether to grant MTBE producers -- in
addition to ethanol producers -- a similar safe harbor from product liability lawsuits
(the conference report does, the Senate version of H.R. 6 and S. 2095 do not);
whether to require manufacturers of fuels and fuel additives to test their impacts on
public health and the environment (the Senate bill did so, the conference report and
S. 2095 do not); and whether to allow EPA to control or prohibit fuels and fuel
additives in order to protect water quality (again present in the Senate bill, but not in
the conference report or S. 2095).
This report will not be updated.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
List of Tables
Table 1. Side-by-Side Comparison of House and Senate Energy Bills and the
Conference Report on H.R. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Renewable Fuels and MTBE: Side-by-Side
Comparison of H.R. 6 and S. 20951
Introduction
This report compares the provisions dealing with renewable fuel (e.g., ethanol)
and with the gasoline additive methyl tertiary butyl ether (MTBE) in the House and
Senate versions of comprehensive energy legislation (H.R. 6), the conference report
reconciling the two, and a substitute bill offered in the Senate (S. 2095). The House
version of H.R. 6 passed the House April 11, 2003. The Senate version passed the
Senate July 31, 2003. The final draft of the conference report (H.Rept. 108-375) was
approved by the conferees November 17;2 the House approved the report November
18. S. 2095 was introduced February 12, 2004. Except for one provision, the
renewable fuels and MTBE titles of S. 2095 and the H.R. 6 conference report are
identical. This report does not address other provisions of the energy bill, including
ethanol tax issues; for an overview of these provisions, see CRS Issue Brief IB10116,
Energy Policy: The Continuing Debate.
Under the Clean Air Act Amendments of 1990, gasoline sold in numerous areas
of the country with poor air quality must contain MTBE, ethanol, or other substances
containing oxygen as a means of improving combustion and reducing emissions of
ozone-forming compounds and carbon monoxide. The Act has two programs that
require the use of oxygenates, but the more significant of the two is the reformulated
gasoline (RFG) program, which took effect January 1, 1995. Under the reformulated
gasoline program, areas with “severe” or “extreme” ozone pollution (90 counties
with a combined population of 64.8 million) must use reformulated gasoline; areas
with less severe ozone pollution may opt into the program as well, and many have.
In all, portions of 17 states and the District of Columbia use reformulated gasoline;
a little more than 30% of the gasoline sold in the United States is RFG.
In the mid-1990s, the addition of MTBE to RFG and its use in conventional
gasoline became controversial. The additive has been implicated in numerous
incidents of ground water contamination, and 17 states have taken steps to ban or
regulate its use. The most significant of these bans (in California and New York)
take effect at the end of 2003, leading many to suggest that Congress revisit the issue
before then to modify the oxygenate requirement and set more uniform national
1 The bills address Clean Air Act, renewable fuel, and ground water cleanup issues. Of the
three authors of this report, Jim McCarthy handles the Clean Air Act; Brent Yacobucci,
renewable fuels; and Mary Tiemann, ground water and underground storage tank issues.
2The final version of the conference report was released November 18, 2003.

CRS-2
requirements regarding MTBE and its potential replacements (principally ethanol).
All three versions of H.R. 6, as well as S. 2095, would repeal the Clean Air Act
requirement that reformulated gasoline contain at least 2% oxygen – the requirement
that forces refiners and importers to use MTBE, ethanol, or other oxygenates in their
RFG. In place of this requirement, all four versions would provide a major new
stimulus to promote the use of ethanol – a provision that the annual production of
gasoline contain at least 5 billion gallons of renewable fuel (more than double the
current production of ethanol). The conference version and S. 2095, like the Senate
bill, require this level in 2012.
The bills use the term “renewable fuel” rather than ethanol, so the 5 billion
gallon requirement could be met by other fuels. In fact, all versions of the bill
specifically include natural gas produced from landfills, sewage treatment plants,
feedlots, and other decaying organic matter in the definition. The renewable fuel
definition also clearly encompasses biodiesel, which can be made from soy beans or
cooking oils. However, ethanol is the only renewable motor fuel currently being
produced in significant quantities. In 2002, roughly 2.1 billion gallons of ethanol
were blended with gasoline. Biodiesel, the next most significant renewable motor
fuel, is consumed at a rate of about 50 million gallons annually, only 2 or 3% of the
amount of ethanol consumed.3
Besides the oxygenate and renewable fuel provisions, the bills are similar in
requiring that reductions in emissions of toxic substances achieved by RFG be
maintained; they all authorize grants to assist merchant MTBE production facilities
in converting to the production of other fuel additives (although the conference report
and S. 2095 authorize $2 billion in such assistance, as compared to $750 million in
both the House and Senate versions); and they each would allow ethanol credit
trading among refiners and importers of fuels.
Major issues the bills handled differently included:
! whether to ban MTBE (the Senate version of H.R. 6 would have done so
within 4 years, with some exceptions, while the House version would not have
banned the substance; the conference report and S. 2095 allow 11 years and
give the President authority to determine that it should not be banned);
! whether to provide a “safe harbor” from product liability lawsuits for
producers of ethanol and other renewable fuels (all three versions of H.R. 6
do, but S. 2095 does not);
! whether to grant MTBE producers – in addition to ethanol producers – a safe
harbor (the Senate bill and S. 2095 do not, but the House bill and the
conference report do so);
3For additional information on ethanol and biodiesel, see CRS Reports RL30758, Alternative
Transportation Fuels and Vehicles: Energy, Environment, and Development Issues, and
RL30369, Fuel Ethanol: Background and Public Policy Issues.

CRS-3
! whether to require manufacturers of fuels and fuel additives to test their
impacts on public health and the environment (the Senate bill would have
done so, the House bill, the conference report, and S. 2095 do not);
! whether to allow EPA to control or prohibit fuels and fuel additives in order
to protect water quality (again present in the Senate bill, but not in the House
bill, conference report, or S. 2095); and
! how much to authorize for MTBE cleanup (the conference report and S. 2095
authorize $1 billion for cleanup of fuels containing MTBE or other oxygenates
and another $1 billion for releases from underground storage tanks generally
– substantially more than either the House or Senate bill).
In addition, the conference report and S. 2095 include extensive amendments to the
underground storage tank (UST) regulatory program and the leaking underground
storage tank (LUST) program. The Senate bill contained some UST and LUST
provisions, but the conference report and S. 2095 go substantially farther, essentially
including the language of H.R. 3335, the Underground Storage Tank Compliance Act
of 2003. It adds new tank inspection and operator training requirements; prohibits
fuel delivery to ineligible tanks; expands UST requirements for federal facilities; and
requires EPA, with Indian tribes, to develop and implement a strategy to address
releases on Tribal lands. The bill authorizes states to use funds from the LUST Trust
Fund to help owners or operators pay the costs of remediating tank leaks in cases of
financial hardship It also authorizes EPA and states to use LUST funds to conduct
inspections and enforce UST release prevention and detection requirements. It
authorizes, for this purpose and for implementing delivery prohibition provisions,
$50 million in LUST funds for each of FY2004-FY2008.
The remainder of this report compares in more detail the MTBE and renewable
motor fuel provisions of the four versions of the bill. (For additional information on
MTBE, see CRS Report 98-290, MTBE in Gasoline: Clean Air and Drinking Water
Issues. For information on ethanol, see CRS Report RL30369, Fuel Ethanol:
Background and Public Policy Issues.)

CRS-4
Table 1. Side-by-Side Comparison of House and Senate Energy Bills and the Conference Report on H.R. 6
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
Renewable Content
A new §211(o) is added to the Clean Air
Similar to the House provision, except that the
Similar to the House and Senate
of Motor Vehicle
Act. Beginning in 2005, motor gasoline
mandate would be 2.3 billion gallons in 2004,
versions, except that the mandate
Fuel
must contain a certain amount of
and would increase to 5.0 billion gallons in
would be 3.1 billion gallons in 2005,
renewable fuel. In 2005, 2.7 billion
2012.
increasing to 5.0 billion gallons in
gallons of renewable fuel must be sold
[§ 820]
2012.
annually, increasing to 5.0 billion gallons
[§1501]
in 2015. After 2015, the percentage of
renewable fuel required in the motor fuel
pool must be the same as the percentage
required in 2015. This standard will
largely be met by ethanol, but other
renewable fuels, such as biodiesel, are
eligible. Ethanol from cellulosic
biomass (including from wood and
agricultural residue, animal waste, and
municipal solid waste) is granted extra
credits toward fulfilling the program's
requirements. Further, the bill would
establish a credit trading program to
provide flexibility to refiners and
blenders. [§ 17101]
a S. 2095 and the H.R. 6 conference report are identical except that S. 2095 does not contain the "safe harbor" provision for renewable fuels or MTBE (§1502)
in the H.R. 6 conference report. In S. 2095, this section was removed and all subsequent sections were renumbered accordingly. For example, §1508 in
the H.R. 6 conference report is §1507 in S. 2095.

CRS-5
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
Ban on Use of
No comparable provision.
Not later than 4 years after enactment, the use
Similar to Senate provision, except that
MTBE
of MTBE in motor vehicle fuel is prohibited
the ban would take effect December 31,
except in states that specifically authorize it.
2014. [§1504] Allows the President to
EPA may allow MTBE in motor vehicle fuel in
make a determination, not later than
quantities up to 0.5% in cases the
June 30, 2014, that the restrictions on
Administrator determines to be appropriate.
the use of MTBE shall not take place.
[§833(c)]
[§1505(b)] Separately, requires the
National Academy of Sciences to
conduct a review of MTBE’s beneficial
and detrimental effects on
environmental quality or public health
or welfare, including costs and benefits.
The review shall be completed by May
31, 2014. [§1505(a)]
Protection of Water
No comparable provision.
Amends §211(c)(1) of the Clean Air Act to
No comparable provision.
Quality
allow EPA to control or prohibit fuels and fuel
additives in order to protect water quality, in
addition to current authority based on
protection of air quality. [§833(c)]

CRS-6
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
Safe Harbor
Provides a “safe harbor” for renewable
Similar to the House bill provision, except that
Safe harbor covers renewable fuels,
fuels and fuels containing MTBE (i.e.,
it applies only to renewable fuels, not MTBE
MTBE, and fuels containing them, as
such fuels cannot be deemed defective in
or other ethers. [§820(e)]
in the House bill. Effective as of
design or manufacture by virtue of the
September 5, 2003, rather than after the
fact that they contain renewables or
date of enactment. The effective date
MTBE). The effect of this provision
means that the safe harbor will protect
would be to protect anyone in the product
oil and chemical industry defendants
chain, from manufacturers down to
from defective product claims in
retailers, from liability for cleanup of
lawsuits that were filed in New
MTBE and renewable fuels or for
Hampshire and California after that
personal injury or property damage based
date. [§1502]
on the nature of the product (a legal
approach that has been used in California
S. 2095 does not contain this
to require refiners to shoulder liability
provision. Otherwise, Title XV in
for MTBE cleanup). With liability for
both the H.R. 6 conference report
manufacturing and design defects ruled
and S. 2095 are identical.
out, plaintiffs would be forced to
demonstrate negligence in the handling
of such fuels, a more difficult legal
standard to meet. Applies to claims filed
after the date of enactment. [§ 17102]

CRS-7
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
MTBE Transition
Amends §211(c) of the Clean Air Act to
Similar provision, but authorizes $250 million
Similar provision, but authorizes $250
Assistance
authorize $250 million in each of FY
for each of FY 2003-2005. [§833(c)]
million for each of FY 2005-2012.
2004-2006 for grants to assist merchant
Adds renewable fuels to the products
U.S. producers of MTBE in converting to
eligible for conversion assistance.
the production of iso-octane and
[§1503] The conference report also
alkylates. Amounts to remain available
authorizes $850 million total for
until expended. The Secretary of Energy
FY2004 through FY2006 for
may make grants available for
conversion and construction of
conversion to other fuel additives, unless
cellulosic ethanol plants. [§1513]
EPA determines that such additives may
reasonably be anticipated to endanger
public health or the environment.
[§17103(c)]
Oxygen Content
Amends §211(k) of the Clean Air Act to
Identical provision. [§834(a)]
Identical provision. [1506(a)]
eliminate the requirement that
reformulated gasoline contain at least 2%
oxygen. Provision takes effect 270 days
after enactment, except in California,
where it takes effect immediately upon
enactment. [§17104(a)]

CRS-8
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
Toxic Air Pollutants
Amends §211(k)(1) to require that each
Identical provisions, but the requirements
Same as the House bill. [§1506(b)]
refinery or importer of gasoline maintain
provide an exception for California gasoline,
the average annual reductions in
which is subject to more stringent state
emissions of toxic air pollutants achieved
requirements. [§834(b)]
by the reformulated gasoline it produced
or distributed in 1999 and 2000. This
provision is intended to prevent
backsliding, since the reductions actually
achieved in those years exceeded the
regulatory requirements. Establishes a
credit trading program for emissions of
toxic air pollutants [§17104(b)]
Mobile Source Air
Requires EPA to promulgate final
Identical provision. [§834(b)]
Identical provision. [§1506(b)]
Toxics
regulations to control hazardous air
pollutants from motor vehicles and their
fuels by July 1, 2004. [§17104(b)]
Blending of
No comparable provision.
No comparable provision.
Retailers may blend batches of gasoline
Compliant
with and without ethanol as long as
Reformulated
both batches are compliant with the
Gasolines
Clean Air Act. In a given year,
retailers may only blend batches over
two ten-day periods in the summer
months. [§1514]
Consolidation of
Eliminates the less stringent
Identical provision. [§834(c)]
Identical provision. [§1506(c)]
RFG Requirements
requirements for volatility applicable to
reformulated gasoline sold in VOC
Control Region 2 (northern states) by
applying the more stringent standards of
VOC Control Region 1(southern states).
[§17104(c)]

CRS-9
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
Public Health and
No comparable provision.
Amends §211(b) of the Clean Air Act to
No comparable provision.
Environ-mental
require manufacturers of fuels and fuel
Impacts of Fuels and
additives to conduct tests of their health and
Additives
environmental impacts (currently, these tests
are at EPA’s discretion and do not include
environmental effects). Also requires EPA,
within 2 years, to conduct a study of the health
and environmental effects of MTBE
substitutes, including ethanol-blended RFG. [§
835]
Analyses of Fuel
A new §211(p) is added to the Clean Air
Identical provision. [§ 836]
Identical provision. [§1507]
Changes
Act. Within four years of enactment, the
Administrator of the Environmental
Protection Agency (EPA) must publish a
draft analysis of the effects of the fuels
provisions in the Act on air pollutant
emissions and air quality. Within five
years of enactment, the Administrator is
required to publish a final version of the
analysis. [§17105]
RFG Opt-In
No comparable provision.
Allows Governors of 12 Northeastern states to
No comparable provision.
petition EPA to require RFG use in attainment
areas in their states. The Administrator shall
do so, unless he determines there is insufficient
capacity to produce RFG, in which case the
commencement date of the requirement shall
be delayed. [§ 837]
Federal
No comparable provision.
At the request of a state, allows federal
No comparable provision.
Enforcement
enforcement of state controls on fuels and fuel
additives. [§ 838]

CRS-10
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
Renewable Fuels
Requires DOE to collect and publish
Similar provision. [§813]
Identical to the House provision.
Surveys
monthly survey data on the production,
[§1508]
blending, importing, demand, and price
of renewable fuels, both on a national
and regional basis. [§17106]
Not later than 12/1/2006, and annually
thereafter, requires the EPA
Administrator to conduct a survey to
Similar provision beginning 12/1/2005.
Similar provision. [§1501(c)]
determine the market shares of
[§820(d)]
conventional gasoline and RFG
containing ethanol and other renewable
fuels in each conventional and RFG area
in each state. [§17101(c)]
Study of
The EPA Administrator and the
Similar to the House version, except that the
Similar to the House version, except
Harmonizing Fuel
Secretary of Energy are required to
report must be submitted by June 1, 2006.
that the report must be submitted by
System
conduct a study of all federal, state, and
[§ 839]
December 31, 2007. [§1510]
Requirements
local motor fuels requirements. They are
required to analyze the effects of various
standards on consumer prices, fuel
availability, domestic suppliers, air
quality, and vehicle emissions. Further,
they are required to study the feasibility
of developing national or regional fuel
standards. A report must be submitted to
Congress by December 31, 2006.
[§17107]

CRS-11
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
Reducing the
A new provision is added to §211(c)(4)
No comparable provision.
A new provision is added to §211(c)(4)
Proliferation of
of the Clean Air Act. The EPA
of the Clean Air Act. The EPA
Boutique Fuels
Administrator is directed to give
Administrator shall not approve a
preference to the approval of air quality
control or prohibition respecting the
State Implementation Plans that require
use of a fuel or fuel additive unless he
the use of "Federal Clean Burning
finds that it will not cause fuel supply
Gasoline"(defined as Reformulated
or distribution interruptions or have a
Gasoline with a Reid Vapor Pressure of
significant adverse impact on fuel
6.8 psi) or "Low RVP" gasoline (with a
producibility in the affected area or
Reid Vapor Pressure of 7.8 psi).
contiguous areas. Within 18 months of
[§17107A]
enactment, the Administrator shall
submit a report to Congress on the
effects of providing a preference for
RFG or either of two low RVP
gasolines. [§1509]
Ethanol from Solid
The Secretary of Energy is required to
Similar provision. [§820B]
Similar provision. [§1511]
Waste Loan
establish a loan guarantee program for
Guarantees
the construction of facilities to produce
fuel ethanol and other commercial
byproducts from municipal solid waste.
The section authorizes such sums as
may be necessary for the program.
[§17108]

CRS-12
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
MTBE and Other
Authorizes to be appropriated to EPA
Amends Subtitle I of the Solid Waste Disposal
Authorizes $200 million for each of
Oxygenated Fuel
from the Leaking Underground Storage
Act (SWDA) to authorize EPA and states to
FY2004-FY2008 from the LUST Trust
Cleanup
Tank (LUST) Trust Fund $850 million
use funds appropriated from the LUST Trust
Fund for responding to LUST releases
for actions deemed necessary to protect
Fund to remediate releases of MTBE or other
generally, and the same amount for
human health, welfare, and the
ether fuel additives that present a threat to
responding to releases of fuels
environment from underground storage
human health, welfare, or the environment;
containing MTBE or other oxygenated
tank (UST) releases of fuel containing
authorizes the use of $200 million from the
fuel additives (e.g., ethanol) that
fuel oxygenates. [§ 17201]
LUST Trust fund for this purpose; and
present a threat to human health,
specifies that releases need not be from USTs
welfare, or the environment.
to be eligible for funding. [§ 832]
[§1525 and §1531]
Underground
No similar provisions.
Amends Subtitle I of the Solid Waste Disposal
Makes more extensive amendments to
Storage Tank
Act (SWDA) to allow EPA and states to use
Subtitle I UST and LUST programs
Compliance
LUST funds to conduct inspections and
than does the Senate version. Adds new
enforce federal and state UST release
tank inspection and operator training
prevention and detection requirements;
requirements; prohibits fuel delivery to
authorizes for these purposes, $50 million for
ineligible tanks; expands UST
FY2003, and $30 million for each of FY2004-
requirements for federal facilities; and
FY2008. Directs EPA to establish a resource
requires EPA, with Indian tribes, to
center for research on bioremediation of
develop and implement a strategy to
MTBE in groundwater and for providing
address releases on Tribal lands.
technical assistance to states; for these
Authorizes use of LUST funds to help
purposes, authorizes LUST Trust Fund
owners pay for cleanup in cases of
appropriations of $500,000 for FY2003 and
financial hardship. Funds may also be
$300,000 for each of FY2004-FY2008. EPA
used to conduct inspections and enforce
may establish a research program for soil
UST leak prevention and detection
remediation of MTBE; for this purpose,
requirements; authorizes for these
authorizes Trust Fund appropriations of
purposes and for implementing
$100,000 for FY2003 and $50,000 for each of
delivery prohibition provisions, $50
FY2004-FY2008. [§ 832]
million in LUST funds for each of
FY2004-FY2008. [§1522-§1533]

CRS-13
Provision
H.R. 6, as passed by House
H.R. 6, as passed by the Senate
H.R. 6 Conference Report / S. 2095a
Research and
No comparable provision.
No comparable provision.
Authorizes $4 million for the
Development
University of Mississippi and the
University of Oklahoma for each of
fiscal years 2004-2008 for a resource
center to further develop bioconversion
technology using low-cost biomass for
the production of ethanol. [§1512(b)]
Authorizes $25 million in each of FY
2004-2008 for research, development,
and implementation of renewable fuel
production technologies in RFG states
with low rates of ethanol production.
[§1512(c)]