Grassley: California Consumers, Iowa Farmers and Small Ethanol Producers


Benefit from BP's Commitment to Ethanol


? Sen. Chuck Grassley said that the decision by British Petroleum to voluntarily phase-out MTBE and replace it with ethanol will greatly minimize the financial ruin threatened by the actions of California's elected officials, while giving California consumers the power and choice to buy clean motor fuels that don't pollute their drinking water.

"America's farmers and ethanol producers have invested $1.4 billion to increase ethanol production and be ready to replace MTBE since California's governor announced three years ago that MTBE would be eliminated on January 1, 2003," Grassley said. "The effort now by California's governor and other elected officials to encourage continued use of water-polluting MTBE, in the face of an abundance of ethanol available to replace MTBE, is totally inexplicable."

In March, Gov. Gray Davis delayed his previously announced ban on MTBE by one year, to January 1, 2004. This week, BP said it has taken the first step to phase out MTBE by the end of this year in the gasoline it sells in California by signing contracts with several ethanol suppliers. BP is the number one supplier of gasoline in California with a 20 percent market share and the number one user of ethanol for gasoline in the United States.

Grassley expressed his appreciation for BP's decision this week. "British Petroleum is leading the way with its commitment to ethanol and a cleaner environment. BP's announcement will help maintain a smooth transition to the market created when Gov. Davis first issued his ban three years ago," he said. Studies have found that MTBE contaminates groundwater.

"Renewable fuels like ethanol will improve air quality, strengthen national security, reduce the trade deficit, decrease dependence on foreign oil sources including Saddam Hussein, and expand market for agricultural products," Grassley said. Today's ethanol industry supports nearly 200,000 jobs nationwide.

Grassley has a long history of promoting expanded use of renewable sources of energy. In 1992, he authored the first-ever wind energy production tax credit. In 1997, he led the successful effort to extend the ethanol tax credit for ten years. Last month, he won Senate approval for a number of alternative energy production tax incentives as part of a comprehensive energy bill. The legislation included a groundbreaking renewable fuels standard that represents a major breakthrough for ethanol.