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Calif. faces gas shortage
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July 12, 2001: 8:26 a.m. ET
Switch to ethanol as clean-air additive seen limiting gasoline supplies
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NEW YORK (CNNfn) - California, already struggling with tight supplies of electricity, soon could face shortages of gasoline due to required use of ethanol, according to a published report Thursday.
The Wall Street Journal reported that the California Air Resource Board is expected to release a survey Thursday showing ethanol supplies will be tight, which could lead to higher gasoline prices.
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A switch to ethanol as a clean air fuel additive could lead to gas shortages and higher prices, according to a published report. | |
By the end of next year, California is to phase out the use of methyl tertiary butyl ether, or MTBE, the fuel additive currently used to cut auto emissions that is a source of its own environmental concerns due to leakage into groundwater supplies.
The switch to corn-based additive ethanol will create the need for 600 million gallons of that form of alcohol in the state, about four times the current demand. The state petitioned to be exempt from using any additive, saying it could meet air standards without them, but President Bush denied the petition last month.
California officials are concerned that the lack of new plants and the increased demand for ethanol in other states phasing out the use of MTBE as well will created a shortage.
The paper reports that officials of the state's air board have been meeting with refiners, expressing concern about shortages, and are leaning toward asking Gov. Gray Davis to postpone the phase-out of MTBE. However, the paper quotes William Rukeyser, assistant secretary of the state's environmental agency, as saying there is no chance that the phase-out will be abandoned, although it may be delayed.
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"People are definitely hearing various things and different scenarios are being discussed, but no decision has been made," the Journal quotes Rukeyser as saying.
The paper says refiners in the state are exploring importing ethanol from Brazil to insure adequate supplies. 
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