Ecologists, Oil Companies Hit Use of Ethanol in Gas

PRODDED by the Clinton White House, federal regulators ordered gasoline refiners to start blending grain alcohol into their products by Jan. 1, 1995, to reduce air pollution.

The widely expected decision was immediately denounced by an unusual alliance of oil companies and environmentalists. They charge President Clinton with currying the farm vote.

Carol Browner, administrator of the Environmental Protection Agency (EPA), says the federal ethanol mandate carries out Mr. Clinton's campaign promise to develop ``renewable fuels from corn, grain, and other sources of energy that are unlimited, clean -burning, and produced right here in America.'' Ms. Browner predicts that the EPA mandate will bring cleaner air to many of the 54 million Americans living in more than 100 cities that fail to meet federal smog or carbon monoxide standards.

Dean Kleckner, president of the American Farm Bureau Federation, says ethanol manufacturers will boost output by 630 million gallons a year to meet the needs of gasoline refiners. The additional ethanol will require 200 million to 250 million bushels of corn. Prices for corn are expected to rise by 10 cents a bushel.

Charles DiBona, president of the American Petroleum Institute, calls the EPA decision ``outrageous.'' He says: ``It is good only for the narrow, selfish interests of the ethanol lobby, which used political pressure rather than any rational justification to get it adopted.'' What caught this city's attention was that leading environmental and research groups, including the Sierra Club and Resources for the Future, joined the petroleum industry in raising serious doubts about the effectiveness and legality of EPA's ethanol mandate.

ONE justification cited by Ms. Browner was that using locally grown corn as fuel ``reduces our nation's dependence on foreign oil.'' The estimated savings are 9,000 barrels a day during the five summer months when an ethanol derivative, ETBE, will be used.

Resources for the Future called Ms. Browner's logic into question. It notes in a paper: ``EPA estimates that the higher cost of ETBE [ethanol] will add $388 million to the cost of the reformulated gasoline program.'' ETBE costs $289 per barrel, the Resources report says, while imported oil is about $20 a barrel.

Mr. DiBona notes that at the higher cost, the government could buy huge quantities of imported oil, give some of it away to American consumers, and still deposit thousands of barrels in the United States Strategic Petroleum Reserve for emergencies.

The decision will reduce use of MBTE, a methanol-based additive derived from natural gas and often preferred by refiners. MBTE is also used to reduce pollution.