Pending Omnibus Spending Bill Includes Clean Water Funds

Before leaving for a winter break, both the US House and Senate Appropriations committees set an $8.4 billion funding level for the US Environmental Protection Agency's 2004 fiscal year, slated to start last October.

By Maureen Lorenzetti

Before leaving for a winter break, both the US House and Senate Appropriations committees set an $8.4 billion funding level for the US Environmental Protection Agency's 2004 fiscal year, slated to start last October. Congress missed that deadline, however.

The proposed amount is a $220 million increase over an earlier Senate plan, and $390 million more than what the House originally wanted. It's also close to $770 million more than what the White House said it needed. The agency will continue to operate on its FY 2003 fiscal year budget of $8.13 billion until Congress finalizes the 2004 spending levels. That may not happen until March.

Meanwhile, the White House is due to release its proposed FY 2005 budget in February and it is possible the administration may again try to trim EPA's overall budget.

Under the pending 2004 budget plan, EPA would be given $1.35 billion for its Clean Water State Revolving Loan Fund; that figure is $150 million above the House mark and $500 million more than President Bush requested. Congress was expected to return the week of Jan 20.

Congress to Reconsider Energy Bill with Water Provisions

The US Congress this year is expected to reconsider a sweeping energy bill, possibly this winter, that expands oil and gas drilling exemptions to federal storm water discharge permits.

The House energy bill, HR 6, revises the Safe Drinking Water Act to exclude hydraulic fracturing fluids from federal underground injection regulations. The bill also shields exploration and production construction sites from federal storm water environmental control regulations.

Whether the Republican-led Congress will pass the 1,200-page legislation in its current form is unknown. Bill supporters have been unable to get the two votes they need to resolve a water issue related to underground storage tank fuel contamination.

House Republican leaders continue to press for limited liability for manufacturers that make e methyl tertiary butyl ether (MTBE), a highly soluble fuel additive blamed for drinking water contamination in several states. MTBE producers want protection from what they view as frivolous product liability lawsuits. Environmentalists meanwhile say the House provision is wrong because it may prevent water districts from recovering losses caused by leaking underground storage tanks that contained the additive. Despite the pending legislation, local jurisdictions in Vermont and New Jersey recently filed suit against MTBE producers and marketers.

MTBE Bans Take Effect

In other MTBE action, the US District Court for the Northern District of New York on Nov. 21 rejected a request by MTBE producers to strike down an impending ban on the clean fuel additive. The Oxygenate Fuels Association (OFA), the trade group representing MTBE producers, told the court that replacing MTBE with ethanol harms local air quality and creates higher gasoline prices.

But Judge Norman Mordue said OFA did not prove its case on either count. Because of water contamination concerns, California, New York and Connecticut are banning MTBE this year; several other Northeast states are poised to follow.

An OFA spokesman warned that allowing the ban to go forward could mean price spikes because the state will be forced to rely on fuel ethanol to meet the 2% wt. oxygen requirement under the federal clean fuels rules the state follows. A proposed energy bill now stalled before the US Congress would have lifted the oxygen requirement and eventually banned MTBE, although on a much slower timetable. It also installed an nationwide ethanol mandate but gave fuel suppliers a credit trading option.

"Because only ethanol can satisfy the oxygen standard without the presence of MTBE in the marketplace, and because the oxygen standard has no trading program like the proposed energy legislation did, New Yorkers can look forward to consuming massive amounts of ethanol in the very near term," warned OFA spokesman Frank Maisano.

Ethanol producers dismissed OFA's claims, saying using their product does not promote smog and does not generate higher fuel prices.

"The assertions from anti-ethanol groups such as OFA that ethanol will lead to increased smog or higher gas prices was roundly dismissed by the court," said Renewable Fuels Association spokesman Monte Shaw. "While these claims will no doubt continue to be made, there is simply no evidence to back them up.

"The ethanol industry is fully prepared to meet New York and Connecticut's demand for a fuel oxygenate that enhances air quality while protecting precious water supplies. Ethanol production capacity can easily expand to supply other Northeast states wishing to ban MTBE as well." Ethanol fuels are also being used with success in California, RFA said.

The California Air Resources Board (CARB) found that all fuel suppliers in the state are now importing MTBE-free gasoline.

Water Group Praises States' Actions

California water utilities are celebrating the arrival of the MTBE ban deadline on Jan. 1, 2004, according to a news release.

"This is a big day for all drinking water consumers and water districts throughout California," said Association of California Water Agencies Executive Director Steve Hall. "ACWA has fought long and hard to rid this contaminant from our gas. Unfortunately, in its wake, MTBE has left widespread contamination that will cost billions of dollars to remediate."

ACWA maintains that it could cost $29 billion to cleanup the damage caused by MTBE; MTBE producers dispute that figure, saying the contamination problem is resolving itself as leaking underground storage tanks are repaired or replaced.

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