SENATE LOOKING AT LIFTING ETHANOL IMPORT TARIFFS

Fear of high prices the catalyst

In the latest discussion of the MTBE liability issue MTBE being the gasoline additive refiners will stop using some Senators fear summer gasoline price spikes, and one option under study is to temporarily lift tariffs on ethanol imports. The MTBE issue is back because of an EPA announcement last month that refiners need no longer add 2% oxygen to gasoline to meet clean air mandates. Ethanol and MTBE were the two additives most frequently used to meet that requirement.

The reason Senators are looking at options, including the tariff action, is that the likelihood of MTBE liability protection legislation being passed by Congress is dim at best, and there are concerns gasoline supply shortages may drive up prices, if only on a regional basis. Some Senators are concerned there is not enough ethanol available to replace MTBE. Alternative fuel producers say there will be more than enough of the corn-based fuel to meet demand.