BP Switch from MTBE to Ethanol in California is Major Win for Clean Water, Consumers and Farmers

WASHINGTON, May 2 -- Major international energy provider BP announced earlier today it would move ahead with plans to switch from MTBE to ethanol in California during the fourth quarter of this year. As the state's largest gasoline marketer, BP's action is good news for consumers concerned with MTBE drinking water pollution and new farmer-owned ethanol plants that were counting on the emergence of a strong ethanol market in California.

"BP's announcement today reaffirms their status as an environmental leader, and is welcome news for consumers anxious about further MTBE water contamination," said Bob Dinneen, president of the Renewable Fuels Association (RFA). "I commend BP for making this courageous decision. It reflects BP's commitment to eliminating the use of MTBE as soon as possible. I believe California consumers will reward oil companies like BP that make an early switch away from MTBE. And I hope other companies marketing gasoline in California will follow BP's lead. There is simply no reason for any California oil company to risk further drinking water supplies by continuing to use MTBE."

Despite statements from every California refiner that they were prepared to switch to ethanol, in March California Governor Gray Davis delayed the state's MTBE ban by one year, until January 1, 2004. After his announcement, several California refiners expressed a desire to proceed with the removal of MTBE by the original deadline. However, BP's announcement is the first public commitment by a refiner to eliminate the use of MTBE as originally scheduled.

"BP's decision makes a strong statement about the ability of the U.S. ethanol industry to replace MTBE," said Dinneen. "Since Gov. Davis signed his original MTBE ban three years ago, the ethanol industry has added one billion gallons of production capacity. We're ready to supply the California market today. BP's announcement injects a measure of certainty for farmers across the country that invested in anticipation of a growing California market. If other oil companies follow BP's lead, those investments will be secure, and additional opportunities for ethanol production in California will be realized."

For more information, visit the Renewable Fuels Association website at: http://www.ethanolRFA.org