I look forward to working with you so that New Hampshire can eliminate the risks posed to our groundwater resources by MtBE in the near future. Should you have any questions, please feel free to contact me or DES Commissioner Robert W. Varney at your convenience.

Very truly yours,

JEANNE SHAHEEN, Governer.

BILL SUMMARY OF S. 2962 AS REPORTED IN THE 106TH CONGRESS

Federal Reformulated Fuels Act of 2000-Amends the Clean Air Act (CAA) to authorize a State Governor, upon notification to the Administrator of the Environmental Protection Agency (EPA) during the 90-day period beginning on this Act's enactment date, or during the 90-day period beginning on the date an area in the State becomes a covered area as a result of reclassification as a Severe ozone nonattainment area, to waive oxygen content requirements for reformulated gasoline sold or dispensed in the State. Considers gasoline that complies with all other requirements for reformulated gasoline other than those regarding oxygen content to be reformulated gasoline.

Requires the Administrator to promulgate regulations to ensure that reductions of toxic air pollutant emissions and aromatic hydrocarbon content achieved under the reformulated gasoline program before this Act's enactment are maintained in States for which the oxygenate requirement is waived or to apply a specified alternative performance standard to reformulated gasoline sold in such States.

(Sec. 3) Authorizes the Administrator to control the sale or introduction into commerce of any fuel or fuel additive that causes or contributes to air or water pollution that may be anticipated to endanger public health or welfare. Permits States not subject to a prohibition on enforcement of certain State emission control standards to prescribe such control on fuel or fuel additives for water quality protection purposes.

Requires the Administrator to ban the use of methyl tertiary butyl ether (MTBE) in gasoline. Authorizes the Administrator to establish a schedule to phaseout the use of MTBE preceding such ban.

(Sec. 4) Authorizes the Administrator to approve a revision of a State implementation plan that excludes an area from a waiver from Reid vapor pressure requirements provided for ethanol if: (1) the State demonstrates that increases in volatile organic compound emissions resulting from the waiver significantly interfere with attainment or maintenance of the national ambient air quality standard for ozone; and (2) the Administrator determines the exclusion to be reasonable and practicable. (Sec. 5) Directs (currently, authorizes) the Administrator, for purposes of registration of fuels or fuel additives and on a regular basis, to require manufacturers of such fuels or additives to conduct tests to determine potential public health and environmental effects (currently, public health effects) of the fuel or additive and to meet other existing requirements.

(Sec. 6) Requires motor vehicle fuel sold in the United States in 2008 and thereafter to be comprised (on a 6-month average basis) of a specified percentage of clean alternative fuel. Phases in such percentage requirement, to require motor vehicle fuel to contain 1.5 percent clean alternative fuel in 2011 and thereafter.

Requires all motor vehicle fuel sold in the United States during 2002 through 2007 to contain, on a 6-month average basis, a specified percentage of renewable fuel. Phases in the percentage requirement, to require fuel to contain 1.1 percent renewable fuel by 2007.

Authorizes credit trading programs to permit persons who refine, blend, or import motor vehicle fuel with more than the required clean alternative or renewable fuel content or who manufacture certain energy-efficient vehicles to use or transfer such credits to others for compliance purposes. Permits the use of the vehicle manufacturer credits to provide any portion of the non-Federal share required for an alternative fuel project under Federal-aid highway provisions regarding the congestion mitigation and air quality improvement program or a voluntary supply commitment under the Energy Policy Act of 1992.

Provides for a temporary waiver of this section's requirements upon State petition if: (1) implementation would severely harm the economy or environment of a State, region, or the United States; or (2) there is an inadequate domestic supply or distribution capacity to meet such requirements. Authorizes exemptions from such requirements for small refiners,

Makes violators of this section subject to civil penalties under the CAA.

(Sec. 7) Authorizes the Administrator to approve State implementation plan revisions that apply a prohibition on the sale of conventional gasoline in covered areas (areas requiring the use of reformulated gasoline) to a nonclassified area.

(Sec. 8) Amends the Solid Waste Disposal Act to authorize the EPA Administrator and States to use funds from the Leaking Underground Storage Tank Trust Fund to: (1) carry out corrective actions with respect to a release of MTBE that presents a risk to human health or welfare or the environment; and (2) conduct inspections, issue orders, or bring actions under the underground storage tank regulation program. Authorizes appropriations.

(Sec. 9) Directs the Administrator to publish analyses of: (1) the changes in emissions of air pollutants and air quality due to the use of motor vehicle fuel and fuel additives resulting from the implementation of this Act; and (2) the effects of motor vehicle fuel and fuel additives on public health and the environment.

Requires the Administrator to publish regulations establishing performance requirements to ensure that, as compared with emissions due to the use of motor vehicle fuel and fuel additives during the period of 1998 through 2000, emissions due to the use of such fuel and additives will not be significantly greater on a per-gallon average basis in any region or cause air quality to be significantly worse in any region.

Directs the Administrator to publish regulations establishing performance requirements for such fuel and additives, the use of such fuel and additives, and motor vehicles that are necessary to ensure adequate public health and environmental protection and to achieve specific reductions in the use of compounds or associated emission products that pose the greatest human health risk.

Requires the Administrator to finalize an emissions model that reflects the effects of fuel characteristics or components on emissions from vehicles in the motor vehicle fleet during 2005.

MTBE BACKGROUND FACT SHEET

Methyl tertiary butyl ether has been used as an octane booster in gasoline since the 1970's. The historic levels of MTBE used for octane enhancement are low, approximately 1 percent of the total national fuel market, compared to the levels found in reformulated gasoline being used today, approximately 3 percent of the total national fuel market.

The reformulated gasoline (RFG) program was established by the Clean Air Amendments of 1990. The RFG program requires gasoline in certain areas to meet specific formula and performance standards that are stricter than standards for conventional gasoline. The RFG program sets minimum content requirements for oxygen and detergents as well as limits on the amount of benzene, aromatics and lead allowed in gasoline. The RFG program also limits emissions of toxic air pollutants and volatile organic compounds. The 2 percent oxygen requirement of the RFG program is currently fulfilled by adding either 15 percent MTBE or 10 percent ethanol to gasoline.

The RFG program has been successful, One notable success it that reformulated gasoline in many RFG areas exceeds the statutory requirement to reduce toxic emissions. This over-compliance is due to the dilution effect of the oxygenate additives MTBE and ethanol, relatively toxic-free additives.

When leaked or spilled into the environment, MTBE can cause serious drinking water quality problems. MTBE moves quickly through land and water without significant biodegredation or natural attenuation. Once in undergroundwater supplies, MTBE can be detected by smell and taste at low concentrations. Small amounts of MTBE can render water supplies undrinkable.

Cleanup of MTBE contamination is possible but difficult and expensive. There are several ways to remove MTBE from drinking water. Contaminated water may be filtered, aerated or bioremediated. All options require installation and use of special equipment as well as on-going maintenance.

Existing programs are either not fully funded or are not structured to provide funding to States for cleanup of substances that move quickly and that ruin drinking water supplies at low levels, well below levels that may be hazardous to public health.

The major sources of MTBE contamination are leaking underground storage tanks. Many underground storage tanks have been or are currently being replaced, per a recent EPA regulation, however there remains questions regarding the ability to employ completely sealed fuel storage systems. Other sources include automobile accidents, fueling over-fills and backyard mechanics.

Christina, you're on.

STATEMENT OF CHRISTINA MILLER, DERRY, NEW HAMPSHIRE

Mrs. MILLER. Good afternoon, Senator, representatives and other distinguished guests. Thank you for allowing me to come and speak about my MTBE experiences.

My name is Christina Miller and I am a homeowner and live at 14 Skywalk Drive in Derry, New Hampshire. My husband and I have been living at this address since June 1998. When we purchased this property, a water test was performed and our water measured high in nitrates, so an additional water purification system was installed. No mention of MTBE was made, nor were any tests provided.

In January 2000, we received a notice that our MTBE sample was below the 13 parts per billion limit at 9 parts per billion. We were retested in April 2000 and the reading was then 22. First of all, this indicates that anyone with any detection of MTBE should be cautions, because there can be significant fluctuations. Current studies are all short term in length and are still limited as to the impact to the damage of your liver, kidney and other carcinogens. Furthermore, another test in May then indicated the percentage had dropped again. But also, MTBE, as a known problem, its dispersion and control is not well understood. Letters we received are very confusing. On page one of a letter from the New Hampshire Department of Health and Human Services dated July 31st, 2000, which had a 9.5 MTBE level indicated that there are no restrictions on water usage. Then on page two it stated, although the MTBE concentration is below drinking water standards, because of the concern about possible fluctuations in the contaminant level, we understand that DES will be installing a point of entry water treatment system.

When the MTBE levels were 22, we were warned not to use the water. The material provided told us how to better store gasoline, making us feel like we were the source of the problem. I don't feel provided us with enough information that made us more comfortable on the effects of MTBE.

Even though I was pregnant and informed the authorities involved in the study, we were not offered water alternatives or informed in any letter about alternative water purification or MTBE's harmful effects on us, never mind my unborn baby. Since we were informed about this problem, I began to do what I consider a considerable amount of research on my own, but almost to no avail. There is not much information found on the effects of MTBE or the problems that it may cause in the long run.

Of all the information that is out there, I have come to the conclusion that there was not enough testing done on MTBE before it had begun to be used in gasoline. In June of 2000, we finally started to receive bottled water. We were provided as much as we needed. Nice, but still a problem to take a shower, to do the laundry, wash our fruits and vegetables, or for cooking, among many other things we use faucet water for but take for granted.

After repeated phone calls and what seemed like lots of convincing, it was finally decided we might qualify for a water purification system. A new water purification system was finally installed at our residence in September. What concerns us also is the

fact that we received no paperwork that the system will be maintained and upgraded as needed for the lifetime of the residence.

Also a big concern of ours is the resale value of our home, as we intend to sell it in the future. We are also still very concerned about our health, which probably won't go away for a while, as there still is no resolution to this problem.

In closing, the NHDES did the right thing in testing for levels across the State, but should provide honest and full disclosure to all residents on MTBE and its possible harmful effects. The NHDES needs to also be proactive instead of reactive. We had to continually call to get results. We still have not been provided any notice of what the source of contamination is.

Finally, if there are long term effects on our health, how does the State expect to respond?

Thank you.

Senator SMITH. Thank you very much, Mrs. Miller.

Mr. Bob Varney, Director of the Department of Environmental Services in New Hampshire. I've had the pleasure of working with him now for, well, probably more years than either one of us wants to admit.

STATEMENT OF ROBERT W. VARNEY, COMMISSIONER, NEW HAMPSHIRE DEPARTMENT OF ENVIRONMENTAL SERVICES Mr. VARNEY. Thank you, Mr. Chairman. I am pleased to be here on behalf of New Hampshire today.

The issue of MTBE contamination has been of great concern to us here in the State for quite some time. It's even more of a problem in the southern part of our State where we have more gasoline usage and more potential sources of contamination, as well as closer proximity of residences.

We have been very frustrated, quite frankly, in dealing with the MTBE issue. We very much appreciate your leadership in the U.S. Senate in trying to craft a compromise, as you've done recently with the Brownfields legislation, to help us reduce and eventually eliminate MTBE as soon as possible.

Here in New Hampshire, using the best available information on health related issues, we have set a very protective health standard of 13 parts per billion for drinking water, which is the most protective health standard for MTBE in the country. California is the only other State that has set a standard. U.S. EPA has not even set a standard on this nationally. But we moved ahead on our own, because we were very concerned about the long term health effects on our citizens.

We have a substantial amount of information on our website, and have tried the best we can with the limited resources that we have to help various citizens who have been impacted. Overall, 16 percent of our public water supplies have some level of MTBE contamination in them. In Rockingham County, it's even higher. Our private wells are also affected, and it could range, depending on the year, from 14 percent to 25 percent of our wells have some level of MTBE in them.

The interesting thing about this is that it's not always directly correlated to an underground fuel tank issue. We have removed about 15,000 tanks in this State and have replaced them with

about 4,000 state-of-the-art double walled or cathodically protected tanks. They have a 99.9 percent compliance rate for USD regulations which I believe is probably the highest in the country.

Even so, we're still finding MTBE in places where you wouldn't expect it. It appears that some of it may be from homeowner use, in terms of lawnmowers, snowblowers, weed whackers, chain saws and so on, where small amounts of gasoline are impacting local wells. We need to work as hard as we can on public education.

Overall expenses have been substantial. We've spent about $200,000 for various point of entry treatment systems, such as you've heard about today, with very limited funding available. One of our difficulties is having a source that we can look to to pick up the tab for some of these costs. Our projections are that it's going to cost the State as much as a $1 million to deal with the remediation of MTBE by the year 2006, based on current trends. We urge you to look very seriously at the LUST trust fund and other potential sources of revenue that could help the State and help the local communities and local homeowners to be able to deal with this issue quickly and cost effectively.

As you know, there are various tradeoffs regarding MTBE, both air and water. It's not a simple solution. You know the issue well. Just to get that vote out of the committee was quite an accomplishment, I think. We look to your leadership in the future in Congress to try to come up with a national solution for MTBE. We need to work with our neighboring States to ensure that we don't create a boutique fuel problem where we have fuel supplies or huge increase in gasoline costs.

We need to make sure that we're not replacing one problem with another problem, which the ethanol replacement situation could be, not only in terms of cost and availability but also in terms of remediation issues that haven't been fully studied yet and aren't fully understood. For example, the availability of ethanol in groundwater may result in benzene being more persistent in the environment, and that's a known carcinogen. So we may actually increase the risk to public health in the future as it relates to ethanol, and more studies are needed.

Finally, I just want to say that we appreciate your efforts. We need State flexibility to be able to do the right thing. We need to eliminate MTBE as soon as possible, and do it in a way that will have the best overall impact on public health. Keep in mind that our violations for clean air are usually 1 day events. But contamination of MTBE in someone's water supply is a daily or even hourly impact on our citizens. So we need to consider that tradeoff as we look to the future and come up with some permanent national solutions that will be in New Hampshire's best interests.

Thank you, Senator.

Senator SMITH. Thank you very much, Mr. Varney.

Senator Klemm, welcome.

STATEMENT OF HON. ARTHUR KLEMM, PRESIDENT, NEW HAMPSHIRE STATE SENATE

Senator KLEMM. Thank you, Senator Smith.

Let me say I appreciate your coming to the district to talk about this issue. I am here today to bring more awareness to an issue