WASHINGTON — As Congress looks for ways to simplify a national patchwork of conflicting gasoline formulas, key interest groups are proposing a compromise that could reconcile the interests of California motorists and Corn Belt ethanol producers.
Under the deal they are advocating, Congress would pass legislation mandating the use of ethanol as a gasoline additive to improve air quality nationwide. But it would be up to the oil industry to decide where ethanol-enhanced fuel would be sold, and Congress would let governors use any kind of fuel so long as it meets anti-pollution standards.
The compromise would provide California the exemption it has been seeking from a Clean Air Act provision that could require refiners to add 580 million gallons a year of ethanol to gas sold in the state. State officials have warned that the requirement is likely to increase prices at the pump.
It also would serve the interests of influential farm-state lawmakers who successfully lobbied the Bush administration to reject California's request for a waiver from the additive rule.
And it could derail a separate legislative proposal to reduce the number of gasoline formulas used across the country from more than a dozen to only three--a solution that would help ethanol producers but do little for California.
That measure, pushed by influential corn state lawmakers, including House Speaker J. Dennis Hastert (R-Ill.), could contribute to a future gas crisis in California and lead to greater balkanization of the national fuel market, critics say.
In a California-centric world, Congress would pass legislation allowing states to produce gas without using ethanol, so long as the fuel meets anti-pollution standards. Oil companies and environmentalists--they are unlikely allies in this dispute--contend they can make such fuel.
But in the real world of Washington politics, Californians have met their match in farm-state lawmakers, who have been highly successful in promoting the ethanol industry.
As a result, the state's best hope now appears to be the compromise legislation, which is sponsored by Senate Majority Leader Tom Daschle (D-S.D.) and Richard G. Lugar (R-Ind.). Their measure would set a nationwide renewable fuel standard designed to triple the amount of ethanol used in the nation's gas supply over the next decade, to 3.5%.
"There's very strong support behind this bill," said Jay Carson, a spokesman for Daschle.
