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47 Senators Join Foes of Plan to Raise Ethanol Use


Siding with an uncommon alliance of environmentalists and oil companies against Midwestern corn farmers, almost half the U.S. Senate sent a letter Wednesday to the U.S. Environmental Protection Agency urging it to drop a plan to mandate the use of ethanol in cleaner-burning gasoline.

Led by Sen. Bill Bradley (D-N.J.), the group of 47 senators said the ethanol requirement would boost the cost of gasoline and unfairly favor one additive over another.

Joining in the criticism were Sen. Bennett Johnston (D-La.), chairman of the Senate Energy Committee, and the panel's ranking Republican, Sen. Malcolm Wallop of Wyoming.

Over the opposition of its staff scientists, the EPA proposed in December that 30% of the new gasoline, due in Los Angeles and the rest of the nation's smoggiest cities in 1995, include an oxygenating additive made from a renewable source.

During the 1992 presidential election, the Bush Administration first overrode an agreement--reached in 1991 negotiations that included environmentalists, regulators, the oil and natural gas companies and the ethanol lobby--not to mandate a specific fuel.

The Clinton Administration's December proposal went even further, virtually assuring ethanol--primarily made from corn--a major share of the new market.

Support for ethanol is strong in Corn Belt states. It has been led by the politically potent Archer-Daniels-Midland Co., which produces up to 70% of the nation's ethanol.

But both the oil and natural gas industry--which produces methanol, a rival oxygenate--and many environmentalists have questioned ethanol's high cost of production and its volatility, which actually could increase air pollution.

"There are many people in the Congress who know that ethanol is not a panacea for our energy fuel needs in this country," Richard J. Stegemeier, chairman and chief executive of Unocal Corp., said Wednesday.

Administration touchiness about the issue was obvious Monday, when Transportation Secretary Federico Pena retracted much of a detailed letter to Budget Director Leon Panetta that outlined his objections to the ethanol provision.

Pena staffers said the letter, in which Pena wrote that he strongly opposed the provision, did not represent his true views and was signed, mistakenly, by an automatic signing device, not Pena himself.

Bloomberg Business News contributed to this report.

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