While a great deal of focus ha s been turned to California’s ban on MTBE use in gasoline blending set for January 1, 2004, on the East Coast New York and Connecticut will also outlaw the use of the additive on January 1, with Connecticut just recently extending the deadline from October 1. State lawmakers were concerned that implementing the ban ahead of New York could lead to supply shortages.

Yet, New York is just as likely in creating gasoline supply shortfalls in implementing the ban said Charles Drevna, Director of Technical Advocacy for the National Petroleum and Refiner Association. In testimony before the New York State’s Environmental Conservation Committee on motor fuels policy last week, Drevna urged state officials to postpone the end of year ban on MTBE.

Stressing the importance of balancing the dual goals of increased energy supply and continued environmental progress, Drevna said, “With these two concepts as a backdrop, NPRA fears that imposition of a unilateral ban of MTBE by the state of New York on January 1, 2004 will produce the opposite of the desired and necessary goals.”

If enacted, the New York ban of MTBE will leave no other option than using ethanol to meet the 2 percent reformulated gasoline requirement of the Federal Clean Air Act. Western and Upstate New York currently utilize conventional gasoline with MTBE found in lower volumes than currently required in RFG.

“If New York imposes the MTBE ban as currently planned,” Drevna explained, “this will require four separate grades of gasoline...” which could “transform the New York gasoline market and infrastructure into an isolated island, with no access to the supply and distribution chain of regional or neighboring states, or importers.”

Drevna goes on to dismiss any comparison with California, where the impact of an MTBE ban set to take effect in 2004 is yet to be determined. Unlike New York, California debated the elimination of MTBE from the gasoline supply for nearly five years before its imposition. California also has 16 refineries, with a total capacity of nearly 2 million barrels per day.

In comparison, New York has no refineries and is dependent on regional refineries from nearby New Jersey and Pennsylvania, the Gulf Coast via pipelines and foreign suppliers. Drevna points out New York may well be basing its total gasoline supply needs on a handful of regional, domestic producers if the ban is not postponed.

Drevna went on to recommend that the Northeast and New England adopt consistent fuel specifications. “NPRA believes the best way to achieve this objective, while maintaining adequate fuel supplies, and continuing environmental progress is through the repeal of the 2 percent oxygenation requirement with no accompanying mandate or ban.”

Drevna pointed out that EIA and other policy analysts predict a significant increase in ethanol usage in the immediate future without a mandate. In addition, ethanol already enjoys a large federal subsidy, tax incentives in 17 states and the protection of a federal tariff. He also criticized the proposed credit trading system because it “requires fuel manufacturers and their customers to pay for the ‘privilege’ of not using ethanol in their gasoline.”