Sen. Murkowski gets ethanol exemption for Alaska

Posted: Sunday, April 13, 2003

FAIRBANKS (AP) -- Sen. Lisa Murkowski has convinced an energy committee to exempt Alaska and Hawaii from a proposed nationwide requirement that refineries add ethanol to their gasoline.

The U.S. Senate Energy and Public Works Committee approved Murkowski's exemption Thursday as part of a proposed revision of the nation's Clean Air Act.

The committee bill would require refiners to put 5 billion gallons of ethanol in the nation's gasoline supply annually by 2012. The nation uses about 1.7 billion gallons now.

While ethanol can reduce production of carbon monoxide, the main goal is to boost usage of a domestic, renewable fuel, according to Michael Catanzaro, spokesman for committee Republicans.

However, Murkowski, R-Alaska, said the ethanol requirement would make Alaska gas more expensive by 2 to 5 cents per gallon. And she said it is impractical, given the state's remoteness, to add ethanol.

The bill now goes to the Senate Energy and Natural Resources Committee, where it will likely be added to a national energy policy bill expected to come to the Senate floor in May.

Ethanol currently is one option that Alaska or its cities can use to help meet existing federal air quality rules.

However, the Senate bill also phases out the federal mandate that ethanol, or any other ''oxygenated fuel,'' be used as a method to combat air quality problems, Catanzaro said.

The House energy bill, passed Friday, also would boost the ethanol requirement in gasoline and repeal the oxygenated fuel requirement.

So, if either bill becomes law, it would eliminate ethanol as a remedy for air problems in specific places but simultaneously encourage its use everywhere.

The Fairbanks North Star Borough, despite historic difficulties meeting federal carbon monoxide standards, has never required the use of ethanol.

In contrast, Anchorage motorists have pumped a 10 percent ethanol blend into their cars each year between Nov. 1 and the end of February since 1995.

Alice Edwards, with the state Department of Environmental Conservation, said Anchorage burns 3.5 million to 4 million gallons of ethanol each winter.

Steve Morris, Anchorage's environmental quality program supervisor, said federal and state governments give tax credits to dealers to compensate for the added expense.

''I think that comes close to offsetting the cost,'' Morris said.

However, Gov. Frank Murkowski's budget proposes to eliminate the tax credit, Morris said.

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