Dianne Feinstein: “I rise today to oppose Senator Domenici's amendment to require that U.S. refiners blend 8 billion gallons of ethanol…”

“I rise today to oppose Senator Domenici's amendment to require that U.S. refiners blend 8 billion gallons of ethanol into gasoline each year by 2012. I think this is a mistake that will cost the Federal treasury $2 billion by the time it is fully implemented and could further pollute California's air. In my home State, the mandate will mean that refiners must choose between blending ethanol into gasoline or using a costly credit/trading system. Either choice will mean California consumers pay more at the pump. Accordiing to the California Air Resources Board, California would be able to mitigate the air quality impacts of a mandate if it were limited to 6 billion gallons or less. With a 6 billion gallon mandate, refiners in California would be required to use about 660 million gallons of ethanol, which they could accomplish in the cooler winter months alone. However, at 8 billion gallons, the State's refiners would be forced to use about 880 million gallons of ethanol and they would either have to use ethanol in the hot summer months, when it could pollute the air, or buy costly ``credits'' for not using ethanol. While we do not know exactly how the credit trading system will work, it is estimated that the credits would cost about 40 cents per gallon of ethanol. So if California refiners were not able to use about 220 million gallons of ethanol per year, it could cost $88 million annually to buy the credits--money that would inevitably be passed on to drivers.…”