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SCHUMER: ENERGY BILL SPELLS BAD
NEWS AND BIG BILLS FOR NEW YORKERS
Energy Bill's ethanol mandate could raise NY gas prices by 10 cents/gallon;
MTBE liability waiver will force New Yorkers to shoulder cost of
spills caused by oil companies
Schumer urges bipartisan effort to stop Energy Bill filled with
interest giveaways, releases new data showing impact on New York
The Energy Bill moving through Congress this week spells bad news
and big bills for New Yorkers, Senator Charles E. Schumer
said today, as he detailed two provisions that would have a particularly
negatively impact on New York.
Schumer said the ethanol mandate in the Energy Bill would require
gas refiners throughout the country to use ethanol to reformulate
their gasoline, a requirement that could drive New York gas prices
up by as much as 10 cents/gallon. A second provision would extend
liability protections to the makers and distributors of ethanol,
MTBE and other gasoline additives, making it impossible for a community
impacted by a toxic spill to take those responsible to court.
"If there was ever a time for sanity on Capitol Hill, this
is it," Schumer said. "The Congress is on the verge
of passing a bill that takes billions from the pockets of working
America and passes it on to a handful of big companies. We
need a bipartisan effort to stop this bill from moving forward and
we need it now because this bill is going to send gas prices, water
bills, property taxes all through the roof and it's going to give
big oil companies a green light to pollute."
The ethanol mandate is expected to cause gas prices in New York
to shoot up by an average of 7 to 10 cents a gallon starting in
2005. Nationwide, prices are expected to rise on average by
4 to 9.7 cents per gallon. In 2013, the bill requires ethanol
to be used by an ever increasing amount determined by the percentage
equivalent to the proportion of ethanol in the entire US gas supply.
"The ethanol tax is an astonishing, anti-consumer requirement
that forces every refiner in the country to use an ever-increasing
amount of ethanol or pay a penalty. But guess who really gets
stuck with paying that fine - you, me, and anyone else who drives
and pays for gas," Schumer said. "As more ethanol
is used and gasoline consumption grows, ethanol producers will be
hitting the lottery while the nation's drivers will be losing their
shirts every time they fill their tanks. Maybe they have a
different name for it in the Corn Belt, but in my neighborhood that's
called highway robbery."
For states like New York, ethanol is expensive because it cannot
be transported using traditional means like pipelines and needs
to be trucked and barged into the region. With only a handful of
companies controlling ethanol production, Schumer said supply problems
would also drive up gas costs. "If you are far away from these
ethanol plants, it has to be produced, put on a truck, a barge,
sent down to Mississippi, and then, by boat, sent all around the
country and then loaded back, put on a truck, and put into the gasoline.
You can see why it is so pricey," Schumer said.
New Yorkers will also find themselves unable to hold the makers
of ethanol, MTBE and other gasoline additives accountable if those
products are found to be defective, contaminate groundwater, or
cause other pollution problems. For example, if MTBE pollutes
an area's groundwater, communities will be barred from holding the
manufacturers and oil companies that produced and used the defective
additives in their gasoline accountable in court. As a result,
taxpayers will be forced to pay for any clean-ups while those responsible
for the pollution are let off the hook. A September Zogby poll found
that 86 percen t of Americans favor holding oil and petrochemical
companies responsible for paying to clean up the MTBE pollution.
MTBE came into wide use after changes to the Clean Air Act in 1990
required that reformulated gasoline containing an oxygenate be sold
in areas like New York with poor air quality. When the potentially
cancer-causing chemical leaks out of an underground storage tank
into an underground water system, the poison does not break down,
moves through the water quickly, and makes the water smell and taste
In New York, there are about 10,000 MTBE spills that need to be
cleaned up, according to the New York State Department of Environmental
Conservation (DEC). The average cost per clean-up is about
$1 million which translates to a cost of about $10 billion statewide,
although costs can run as high as $4 to $8 million to clean larger
Since the oil companies responsible for the spills will be protected
from any lawsuits, the cost of cleaning spills that, among other
things, contaminate groundwater, will be passed on to individuals
through property taxes, water and other bills. In Long Island,
for example, the average water bill is expected to rise by 66 percent
to cover the costs of MTBE cleanup. Overall, the cost for
cleaning up MTBE on Long Island would be between $260 and$540 million
for its 130 public water supplier wells that are impacted by MTBE.
Nationwide, the cost is expect to exceed more than $29 billion.
"This may be the single worst special-interest giveaway to
polluters that I have ever seen in more than 20 years in Washington."
Schumer said. "The idea that we should let the companies whose
product literally poisoned our groundwater get away free - and instead
force innocent New Yorkers to pay for the cleanup - is so incredible
and so audacious that words fail to describe it."
The "Safe Harbor" provision would prevent petroleum companies
from having to pay a cent to clean up the damage their toxic product
created by making a blanket declaration that chemicals added to
gasoline as part of the energy bill's ethanol mandate or MTBE can
be considered a "defective product" in a court, even if
the chemical is classified as a carcinogen.
The provision is particularly galling in light of a decision by
a California jury 18 months ago that found "clear and convincing
evidence" that three major oil companies acted "with malice"
and were liable for polluting ground water with MTBE. During the
case, plaintiffs uncovered internal industry documents showing companies
had known for years about the dangers of MTBE while they still were
promoting its use.
Although Schumer and others prevented this provision from being
added into the Senate version of the Energy bill this summer, the
final agreement includes the "Safe Harbor" provisions.
in the News
Schumer Nov. 19, 2003