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CLEAN AIR ACT OVERSIGHT ISSUES

FRIDAY, APRIL 27, 2001

U.S. SENATE,

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS,

Salem, New Hampshire.

The committee met, pursuant to notice, at 2 p.m. in the media center of Salem High School, 44 Geremonty Drive, Salem, New Hampshire, Hon. Bob Smith (chairman of the committee) presiding.

USE OF METHYL TERTIARY BUTYL ETHER (MTBE)

Present: Senator Smith.

OPENING STATEMENT OF HON. BOB SMITH, U.S. SENATOR FROM THE STATE OF NEW HAMPSHIRE

Senator SMITH. This hearing of the Environment and Public Works Committee of the U.S. Senate will come to order. Let me say good afternoon to everyone, thank you all for coming.

This hearing is on MTBE. It may not be a household word, unless you have it in your household. Part of the problem is to give attention to this issue. That is why we're here today.

I certainly want to thank the witnesses who will be here for this panel and the second panel. We'll just say for the benefit of those who are watching, we expect this to go about 2 hours overall, so you can plan accordingly.

I want to also thank Salem High School for allowing us to use this room. It's a terrific room for this kind of function.

I'm just going to make a brief statement, then we'll go to the witnesses. Since taking over as chairman of the Environment and Public Committee, I've tried to ensure that New Hampshire residents have a strong a voice in national issues and some local issues, of course, as we develop environmental policy into the next century. In the 2 years prior to my chairmanship, only two New Hampshire witnesses had testified before the committee. With these witnesses today, we have heard from 30. The gentleman who just came in to sit down, Bob Varney, at DES, has been to Washington several times. It does make a difference, because we have a lot of smart people in this State, and it's nice to showcase them around the country.

It certainly played a major role last year in ensuring that our tree farmers in northern New Hampshire didn't lose their business because of a shortsighted EPA Clean Water Act regulation known as Total Maximum Daily Load (TMDL). Acronyms are very prevalent in Washington.

Another issue that has enormous New Hampshire involvement was that of brownfields reform. I'm very pleased to report that on Wednesday, the brownfields cleanup bill passed the U.S. Senate by a vote of 99 to 0. Let me tell you, as Bob already knows, because he has been working on it longer than I have—and I've been working on it for at least 10 years-we haven't been able to get agreement in the Senate. Now to pass it 99 to 0, with Ted Kennedy and Jesse Helms on the same side, all in agreement-it's got to be good. We're very excited about the enactment of this bill. It's going to bring a lot of money into New Hampshire to clean up those sites. But more importantly, it's going to promote the cleanup of brownfields, even without Federal money because contractors now will be allowed to clean them up.

That's not the subject of this hearing. What we're looking at now is something that's called MTBE. The actual name is methyl tertiary butyl ether, but we'll call it MTBE the rest of the day, if you don't mind.

I've asked our witnesses to share with us their expertise and their testimony and their knowledge on this issue in a way that they see fit. This will be very valuable in our efforts to develop the bill to deal with this problem, not only in New Hampshire, but also in other States of the United States. California, for one, has a tremendous problem. There are two very prominent Democrat Senators there, Feinstein and Boxer. We need their help, so this bill will be bipartisan. It is a regional problem, not a partisan one, as you'll find out as we go on.

MTBE is a clean, cheap gasoline additive that boosts octane. It's been added to gasoline for over two decades. So those of you that are watching, and you're wondering what in the world this stuff is, we'll try to quickly mention it. I know the experts will be able to give you a lot more specifics.

The 1990 Clean Air Act Amendments amended the Act to require the use of reformulated gasoline through a Federal clean air program run by the EPA called the RFG program. That law requires a cleaner burning gasoline to be used in certain areas of the country to improve air quality. Other areas, including southern New Hampshire, chose to participate. The RFG program has been successful in achieving air quality beyond the requirements that we expected.

Unfortunately, a major side-effect of MTBE use in gasoline is that is sometimes causes water quality problems. The RFG program mandates the use of oxygenate inert gasoline. MTBE is one of two options currently in use, and the other is ethanol. We'll get into that a little bit later.

The problem, though, with MTBE, is its ability to migrate very quickly through the ground, through the water into the water table. Then it's diffused through that water very quickly. Even at low levels of contamination, MTBE renders water unusable, as we will hear from Mrs. Miller in just a moment, because of its foul odor and taste. In an effort to address the clean air concern, the impact on our drinking water was neglected.

Adequate research and science might have prevented this. But we didn't pay attention to the science or perhaps didn't look for the science. Now we have several billion dollars tied up in cleaning up

our water as a result of trying to clean up our air. Now we have to change the law, perhaps at the State level, Senator Klemm, and certainly at the Federal level.

We need fewer "stovepipe," narrow-vision solutions to pollution problems; and we should find more holistic solutions for our environmental challenges. We should ask ourselves, "What these laws will do to the environment? Can we look at the system in a holistic way, as opposed to viewing it through a narrow scope."

One of the most distressing aspects of MTBE contamination is that the health effects of this gasoline additive are largely unknown. I'm hoping that folks from UNH will have more to say about that. But because of MTBE, New Hampshire has spent a lot of money in order to provide safe water for residents with contaminated wells. The Department of Environmental Services under Bob Varney is one of the best in the country, believe me. I don't say that lightly. That is a fact, and I've talked to almost all of them all over the country.

The State has been providing bottled water as well as installing and maintaining very expensive and extensive treatment equipment. Particularly hard hit have been the communities in the southern interior, such as the homes around Arlington Lake in Salem, Frost Road in Derry and Green Hills Estates in Raymond. New Hampshire is not alone. Many other States also have had gasoline leaks or spills that resulted in costly cleanups, even the closure of wells. It remains a major problem that will not go away without Federal action, but we need to do it soon.

I'm glad to hear that Governor Shaheen has joined this battle with her recent request to opt out of the RFG program. I'm glad to hear that the State legislature is pursuing creative options to get New Hampshire out of the RFG program. I support those efforts. We also share the common goal for protecting New Hampshire's water, and I intend to work with the State in every way I can, with every amount of influence that I can muster as the chairman of this committee, to see that we get that done.

Unfortunately, even if allowed, New Hampshire's removal from the RFG program is not enough. It's only a band-aid. It's not going to provide the cure that we need. It's not going to keep MTBE out of New Hampshire. It's not going to clean up existing contamination, and additional measures will be required to maintain air quality. What it might do, if just the RFG issue is dealt with, is raise the price of New Hampshire gasoline, which I don't think anybody's too excited about.

So we've got to find a better way. We've got go beyond our current vision; we have to increase current air quality and water quality assurances.

Last year, I had introduced a bill in the Senate, S. 2962, that offered a comprehensive solution. It provided cleanup money; it banned MTBE; and it allowed the Governors to waive the oxygenate mandate. I believe Mr. Varney testified that it protected the current air quality from backsliding.

So why didn't that bill pass and become law? It did report out of committee, but it died on the Senate floor, like so many other pieces of legislation. Why? Because of competing regional interests across the country. The MTBE producers, the ethanol producers,

the refiners, there are so many. Then you have the regional issues of who has MTBE in their wells and who doesn't.

So due to all these competing interests, many of the proposed Federal fixes just simply died. That was the problem. So any legislation dealing with MTBE will have to go through the Committee on Environment and Public Works. When it does come through there, I intend to have New Hampshire taken care of.

We need to work together, though. The problem is, we need consensus. Everybody can't get exactly what they want. That's what we did with Brownfields, which is why were able to get a 99 to 0 vote. Also we saw a 85 to 1 vote on the restoration of the Everglades, which didn't really pertain to New Hampshire, unless you want your kids to go and see the alligators, and I think you do.

I'm going to make sure any bill that comes in through this committee is one that takes care of us here. It's my intention now, after we hear the information and testimony from the experts from our State, to introduce a bill very similar to last year's.

As each witness testifies, please remember that this is a national hearing. It will get national attention. It is being covered locally by the cable folks, but remember, this testimony will go into the committee's records. I can pass this out to my colleagues in the other 50 States to let them know how much of a problem we have here in New Hampshire, that the chairman of this committee has here in New Hampshire, to be specific. I need help for my constituents. So thank you, each and every one of you for coming, all of the witnesses and the participants. Let me also say that each of the witnesses, we'll give you about 5 minutes, we're going to turn a light on somewhere. Don't be intimidated by it. If you can wrap it in 5 or 6 minutes, we'd appreciate it. All of your remarks written will be made part of the record. We've allowed time to have folks come up, take the microphone. This will become part of the record of Congress and the Senate. If you can try to do it in a minute or so, we'd appreciate it, especially if there are a lot of people speaking.

If you choose to not make oral remarks, maybe you don't feel comfortable stepping up to the microphone, you can send me written remarks and I will make them part of the record if you get them to me within the next 2 weeks. So that whatever you have to say will be part of the Federal record on this issue.

Let me introduce the first panel now. I'm pleased to have Christina Miller, who is a homeowner in Derry, the Honorable Arthur Klemm, President of the New Hampshire State Senate, and Robert Varney, who is the Commissioner of the New Hampshire DES. I think, Senator Klemm, since Mrs. Miller has this contaminant in her well, I think we'll start with her and move across to you, if that's OK with you.

[Documents submitted for the record follow:]

STATE HOUSE,

OFFICE OF THE GOVERNOR, Concord, NH 03301, April 16, 2001.

The HONORABLE CHRISTINE TODD WHITMAN, Administrator,

U.S. Environmental Protection Agency,

Ariel Rios Federal Building,

1200 Pennsylvania Avenue, NW

Washington, DC 20460

RE: INTENT TO OPT OUT OF THE FEDERAL REFORMULATED GASOLINE PROGRAM DEAR ADMINISTRATOR WHITMAN: I write to make you aware of my decision that the State of New Hampshire must seek withdrawal from the Federal Reformulated Gasoline (RFG) program immediately. Therefore, I ask the U.S. Environmental Protection Agency (EPA) to promptly address its procedures for States opting out of the RFG program (40 CFR 80.72) to allow a much sooner effective date than January 1, 2004. I am taking this action because it appears to represent the only rational, and legal, approach available to the State at this time to sharply reduce the levels of methyl tertiary-butyl ether (MTBE) in gasoline supplied to New Hampshire.

As you know, MTBE is a significant and rapidly increasing threat to New Hampshire's groundwater and surface water resources. MTBE is difficult and expensive to remediate because of its high solubility and its ability to move quickly t.hrough groundwater. Because MTBE travels farther in groundwater and does not break down rapidly, it can be difficult to pinpoint the source of the contamination. MTBE has been detected in public drinking water supplies and in private wells, and its remediation is consuming a disproportionately large percentage of the funds we have set aside for all petroleum contamination needs.

New Hampshire is particularly frustrated with existing Federal barriers that prevent States from readily and effectively reducing or phasing-out the use of MTBE in gasoline. The Federal Clean Air Act essentially prohibits States from controlling individual components of gasoline, and it expressly mandates the oxygen content of RFG. Refiners in the east blend MTBE in RFG in concentrations 5-10 times greater than conventional gasoline-because it is the most cost-effective alternative for meeting this mandate. Because the Federal Clean Air Act and 'its associated regulations provide States with virtually no authority to reduce MTBE in gasoline, States that use RFG are essentially compelled to contaminate their precious water resources. This is an unacceptable situation.

From the time we first recognized this problem, it has been clear that there are no simple solutions. As a result, on behalf of the New England Governors, I asked the Northeast States for Coordinated Air Use Management (NESCAUM) to thoroughly study the issues and options surrounding RFG and MTBE. Soon after, EPA's National Blue Ribbon Panel on MTBE was launched. The work products of both of these initiatives-NESCAUM's RFG/MTBE Findings and Recommendations and the Blue Ribbon Panel Findings and Recommendations on the Use of Oxygenates in Gasoline recommended elimination of the oxygenate mandate from the Clean Air Act. The MTBE problem requires a Federal solution, but Congress has made little progress to date and no Federal solution appears imminent.

As a result, the State of New Hampshire is forced to pursue the only legal, rational option that exists for reducing MTBE in gasoline: to opt out of the Federal RFG program. I have thus directed the New Hampshire Department of Environmental Services (DES) to immediately inform EPA Region I of this action, to promptly consult with EPA's regional office to establish the requirements necessary to implement this action, and to expeditiously fulfill those requirements. Since I understand that a strict interpretation of the applicable Federal regulations (i.e., 40 CFR 80) prevents New Hampshire from opting out of the RFG program prior to January 1, 2004, I further request that EPA address these regulations to provide for an earlier opt out date and/or such other relief as may prevent further MTBE contamination of New Hampshire's water resources between now and 2004.

As a former Governor, I am sure you understand the economic and environmental importance of solving the problem of MTBE contamination. From your experience as Governor, you are also aware of the aggressive steps States have taken to replace underground fuel tanks and educate consumers regarding spill prevention and the proper handling of gasoline. Given the volume of gasoline distributed, however, it is ultimately unreasonable to expect that there will be no releases, even with the most diligent gasoline handling. The pollution prevention and source reduction approaches that the States have found to be extraordinarily effective advise us to reduce, and eventually eliminate, the use of MTBE as a gasoline additive in the first 'place.

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