Is EPA’s Oxy-fuels Plan a Sham?

By Michael Fumento

Investor’s Business Daily, November 17, 1992
Copyright 1992 Investor’s Business Daily

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"This gasoline contains oxygenated fuel that reduces carbon monoxide emissions in automobiles."

This or a similar notice will appear on gas pumps this winter in most major metropolitan areas. It’s one of the first elements of the Clean Air Act of 1990 to kick in, and will be the first that consumers notice.

The Environmental Protection Agency lauds the new rules, promising a 20% cut in carbon monoxide emissions in areas where the fuel is used.

But critics say it is a terribly expensive program that treats symptoms rather than the underlying problem. They say the so-called oxy-fuels program forces the great majority of drivers with clean-running cars to subsidize the few with dirty ones. Further, they argue there is little evidence that the program has any effect on the air at all.

Indeed, Jonathan Adler, an alternative fuels analyst at the Washington-based Competitive Enterprise Institute, calls the oxy-fuels program "a special interest set-aside that has little if anything to do with clean air."

Under the 1990 Clean Air Act, gas stations in 39 urban areas where carbon monoxide concentrations exceed federal standards must sell only gasoline that contains a special additive with more oxygen. Depending on the city’s concentration of carbon monoxide, the program will remain in effect for four to seven months each year.

Oxy-fuels use additives such as MTBE, a natural gas derivative, or ethanol, a corn-based distillate.

Carbon monoxide is a colorless, odorless gas emitted by internal combustion engines fueled by gasoline. It replaces oxygen in the blood, and at levels above three parts per million — levels reached in cities violating EPA standards — it can cause lightheadedness, dizziness, and chest pains for people who suffer from heart disease.

Carbon monoxide can cause death, but only at a level of 300 parts per million, 100 times the EPA’s trigger level.

Carbon monoxide is a much greater problem in winter not because cars emit more of it in colder temperatures but because many cities experience air inversions in winter. In a temperature inversion, a layer of warm air holds down colder air beneath and prevents carbon monoxide from dissipating.

The EPA acknowledges that many cars using oxy-fuels will suffer reduced mileage. That’s because there is a smaller amount of combustible gasoline in each gallon of fuel blended with oxygenates. Oil industry calculations estimate an average mileage drop of 3% to 4%, while the Department of Energy estimates a 2.5% decline and the EPA a drop of 1%.

Add to this the increased per-gallon cost of oxy-fuels incurred from making, storing and transporting the fuel additives, along with the cost of blending them with gasoline.

Again, estimates vary depending on who’s making them. DOE estimates gasoline prices will go up three to five cents a gallon, but oil company officials foresee a jump of nearly 10 cents a gallon in some places.

There is no official estimate of the cost of the oxy-fuels program nationally. But a 1990 study prepared for the Arizona Department of Environmental Quality estimated that oxygenates in that state increased costs to consumers by $29 million to $37 million annually.

Of the approximately 190 million motor vehicles in the nation, only about 2.8 million are in Arizona and almost all major metropolitan areas are required to use oxy-fuels. Extending the Arizona estimate to the rest of the nation gives a potential annual cost of more than $2 billion.

Oxygen Sensors

What few press reports mention is that for most cars there will be virtually no reduction in emissions.

This is because cars that are in tune or have functional oxygen sensors on their engines are already using the optimal fuel-to-air ratio. All automobiles in this country from model year 1983 on have been equipped with oxygen sensors.

Thus, oxygenated additives can at best reduce the carbon monoxide emissions of pre-1983 cars in need of a tuneup and post-1983 cars with broken sensors. Ironically, it is the cars with oxygen sensors that will suffer the greatest loss in mileage.

A 1989 study by University of Denver chemistry professors Gary Bishop and Donald Stedman found that only one of 300 vehicles made in 1988 and 1989 put out a significantly high level of emissions.

Thus, among relatively new cars, 299 out of 300 vehicles will not benefit from the use of oxygenated fuels. That 300th car is eligible, under federal law requiring emissions systems warranties up to the first 50,000 miles, for free repair to bring it into compliance.

Even among cars built before oxygen sensors were widely used — model years 1980 (1981 and 1982 were transition years) and before — University of Denver testing found that 81% ran cleanly. The bottom line was that only 9% of the cars could have benefitted from oxygenated fuels.

Forcing all drivers in a given area to use oxy-fuels "is like mandating AZT for the entire population because a few people have AIDS," said Stedman.

"The main problem with oxy-fuels is that they are a driftnet approach to a localized problem," added CEI’s Adler. "Why are we forcing all drivers to pay?"

The answer, he said, "lies with special interest politics on Capitol Hill, in particular the ethanol industry led by Dwayne Andreas."

About 70% of the ethanol produced in the U.S. is manufactured by Archer Daniels Midland Co. (ADM) of Decatur, Ill., which is headed by Andreas. With sales of about $7 billion a year, ADM is the largest grain-processing company in the world.

A recent study by Common Cause, a Washington-based government watchdog group, found that Andreas, his family and the company’s political action committee gave nearly $2.8 million in political contributions in the past decade.

A separate study by the Washington-based Center for Responsive Politics found ADM to be the biggest contributor of "soft" money — unregulated contributions from wealthy individuals, corporations, and labor unions — to either major political party in the first three quarters of 1992.

The main recipient of ADM’s largesse has been Senate Minority Leader Robert Dole, R-Kan., who has been a major proponent of oxy-fuels in the Senate.

Ethanol is roughly twice as expensive as unleaded gasoline, and critics say it would not exist but for a subsidy of about $19 a barrel of ethanol from the government. The subsidy, which takes the form of an exemption from federal fuel taxes, owes its existence to the efforts of Dole. Some individual states also provide tax breaks to the fuel.

ADM also owns 5% of Arco Chemical Co., the country’s main manufacturer of MTBE. About 83% of Arco Chemical is owned by the Atlantic Richfield Co. According to the Center for Responsive Politics study, Arco was among the top five contributors to both parties.

Minor Problem Addressed

But critics argue that oxy-fuels don’t really do the job. At best, Stedman contends, oxy-fuels help solve one minor part of a much bigger problem — cars with poorly maintained or broken emissions systems.

"The same data used to justify oxy-fuels shows that fixing 10% of a fleet gives you more improvement than forcing the whole fleet to use oxy-fuels," said Stedman.

Added Gary Bishop, "A proper tuneup and repair will reduce all emissions, not just those of carbon monoxide, and it will reduce them year-round, not just during the winter months. Instead of curing your cold, oxy-fuels just dry up your nose."

Both researchers note that while some in the media have tagged oxy-fuels as "clean," they are no cleaner than the alternatives. They merely trade off some emissions for others.

In particular, ethanol raises emissions of aldehydes, which have been linked to cancer in laboratory animals. It also boosts levels of nitrogen oxide, which contributes to the formation of smog.

Indeed, it is because of the smog-forming potential of nitrogen oxide that California’s strict Air Resources Board has mandated that the oxy-fuel blend in that state contain less oxygen.

The best method for cutting both carbon monoxide and smog, claims Stedman, is a remote monitoring device that is placed by the side of the road and measures emissions of passing cars.

An attached video camera photographs the license plates of gross polluters, and the drivers can be ordered to fix their exhaust systems or can even be given a voucher to help them do so.

The test is cheap, it is not subject to cheating because it is a surprise, and it targets the worst polluters. Stedman estimates the cost of what he calls a targeted repair program at $110 per ton of carbon dioxide removed, compared with an estimated $500 to $1,500 per ton for oxy-fuels.

Remote Testing Discouraged

Yet, the EPA has discouraged the use of remote testing. While the 1990 Clean Air Act specifically allows for the use of mobile emissions testing as part of a city’s clean air plans, the EPA ruled that cities would not get credit for such testing.

"If you’re looking at it from a bureaucrat’s empire-building perspective, you want the largest group of people you can get under your program," said Wayne Brough, an economist at Citizens for a Sound Economy, a Washington-based free-market advocacy group.

"With a very specific program that targets a minority of cars on the road, you’re clearly not going to have as large a program as you would like to see."

But while the EPA continues to tout the wonders of oxy-fuels, some researchers who have studied the effects of Colorado’s program claim there is no evidence of any improvement.

One such researcher is Larry Anderson, a professor of atmospheric chemistry at the University of Colorado at Denver. Colorado pioneered the use of oxy-fuels in 1988.

Denver: Cleaner air, but no thanks to fuel additives.

The Colorado Department of Health (CDH) has declared the program a great success. But Anderson, using data collected by the CDH from emissions monitors in Denver, found the "oxy-fuels program has had no statistically significant effect on concentrations in the atmosphere."

Why the difference between Anderson’s findings and that of the CDH? Said Anderson: "We’re looking at what really happened, while they are calculating what the program should have done based on their models. They’re not assessing the program at all."

Improvements In Denver

Both the CDH and the EPA do claim that actual carbon monoxide levels in Denver have registered a decrease. USA Today, in a recent article on the oxy-fuels program, noted that, "In Denver, levels of poisonous carbon monoxide have been reduced by more than 20% since an oxygenated fuel program began in 1988."

It quoted EPA official William Rosenberg saying, "I think we will have similar positive experience" nationwide.

Similarly, the Associated Press has told its readers, "To illustrate the improvement (caused by oxy-fuels), (CDH senior air-pollution control specialist Ted) Hollman noted that in one year in the 1970s the Denver area had 120 violations of federal carbon monoxide standards. Most recently, it had three violations."

What these news accounts aren’t telling you, critics note, is that levels of atmospheric carbon dioxide were declining steadily in Denver — along with the rest of the country — long before the oxy-fuels program began.

The number of days on which federal standards were exceeded at the pollution monitor in the most heavily trafficked area of Denver dropped from 136 in 1970 to 19 in 1987, the year before oxy-fuels were first used.

The CDH also gives some credit for the decline to its annual emissions testing program. Yet the number of days the city exceeded acceptable pollution levels had already dropped to 25 the year before that program began.

Drop In Smog Emissions

Moreover, according to EPA data released just a few weeks ago, smog emissions over the last three years dropped so much throughout the country that 41 cities for the first time complied with federal smog standards. Smog is usually a summertime problem caused by various emissions other than carbon monoxide. This data was released at a press conference by EPA’s Rosenberg.

The reason for the national decline in automobile emissions, says Anderson, is federal clean air regulations instituted in the early 1970s that resulted in the use of catalytic converters and other pollution reduction technology. Even assuming some slight benefit from oxy-fuels, said Anderson, they "may not have been necessary at all."

Said CEI’s Adler, "When our government decides that it’s okay to spend perhaps a couple of billion dollars for such a marginal benefit — and this is just one part of a Clean Air Act, which contains so many such questionable regulations — it’s a sure sign that we do not have in this country a rational environmental policy."

Read Michael Fumento’s additional work on the EPA, on alternative fuels, and on pollution.