ETHANOL POLITICS DERAILING EPA

No one can accuse Carol Browner of grandstanding to environmentalists this time. Pressing state sponsorship of fuel ethanol despite a contrary court decision, the U.S. Environmental Protection Agency administrator runs afoul of the environmentalist community from which she emerged and the environmental values she is supposed to uphold.

Environmental groups oppose EPA's effort to specify that 30% of the oxygen required in reformulated gasoline come from renewable sources. They know that what amounts to an ethanol mandate will, if anything, do more environmental harm than good while promoting a substance that is unmarketable as a fuel additive without taxpayer subsidies. They, like refiners, further resent the measure as a violation of agreements that helped implement reformulated gasoline requirements under the Clean Air Act (CAA) amendments of 1990.

POLITICAL PROMISE

But it doesn't matter. Environmental values have nothing to do with Browner's promise this month to appeal the ethanol mandate's late April rejection by the U.S. Court of Appeals for the D.C. Circuit. Browner's promise is about politics.

One political dimension of Browner's move is obvious. Fuel ethanol is a sop to farm states and ethanol producers. By some estimates, a requirement that reformulated gasoline contain 30% ethanol would be worth $1.5 billion/year to those constituencies.

So much money, so many votes. And the administration of Bill Clinton must feel pressure to make the first move for this election prize. The leader in the race for the Republican presidential candidacy is Sen. Robert Dole of Kansas, an ethanol supporter.

For refiners, which have encountered trouble enough bringing reformulated gasoline to market, the ethanol lobby's lingering grip on U.S. politics should be a major concern. But another, less obvious political dimension of EPA's move deserves attention, too.

In an analysis of the April court decision, National Petroleum Refiners Association points to language certain to worry activist regulators such as Browner. The court decision drew clear boundaries around EPA's scope.

In its ethanol mandate, EPA had claimed power not specifically denied it in the law. The court responded, "...We will not presume a delegation of power based solely on the fact that there is not an express withholding of such power." Elsewhere, it declared, "The authority to set a standard under the Clean Air Act does not authorize EPA to mandate the manner of compliance or the precise formula for compliance without additional explicit authority."

For an agency prone to regulatory expansionism, this is a stunning rebuke. It says that for regulators the law is the limit, not the starting point. The political implications thus go well beyond the presidential election of 1996. It challenges EPA to fight for its very character.

AGGRAVATING POLLUTION

And fight it apparently will. In her letter to Sen. Tom Daschle (D-S.D.) promising to appeal the ethanol mandate decision, Browner further promised to give governors authority to lift summertime limits on gasoline oxygen content. Unheedful of how this would increase evaporative emissions, the EPA chief says she wants to remove limits on the use of "renewables."

Raising evaporative emissions would aggravate ozone pollution, of course. But, to repeat, the issue is political, not environmental. The D.C. appeals court sees the science of the issue clearly and wants EPA to get its priorities straight. The question is how much more credibility Browner will sacrifice pretending not to hear.