Wilson left Davis with anMTBE headache, and it's still throbbingBy Dan Walters –Sacramento Bee Political ColumnistPublished 5:30 a.m. PDT Friday, March 22, 2002It's been a semi-tradition for outgoing California governors to stick their successors withbudget problems -- such as the multibillion-dollar disaster that Pete Wilson inherited fromGeorge Deukmejian in 1 991. Gray Davis, in fact, is one of the few recent governors not t ofind a fiscal mess when he took office in 1999.But Wilson did leave him another Excedrin-size headache that's still throbbing three yearslater. And it's a tale best told from the beginning.MTBE is a chemical compound found in most California-sold gasoline, as a response to afederal mandate to use "oxygenates" to promote cleaner fuel burning and therefore lesspollution. But in a classic act of bureaucratic and political bungling, when the stateapproved MTBE, nobody bothered to learn whether it would cause other problems, and itturned out to be a severe water polluter. Wilson signed legislation requiring the governorto decide whether to continue MTBE's use but left the actual decision to Davis, whoimmediately faced heavy lobbying pressure from all factions.Actually, the issue was never whether MTBE would be continued, but whether it would beremoved immediately or phased out over several years. And looming in the backgroundwas whether gasoline could be made clean enough without oxygenates, as refinersclaimed, or whether the state would have to use a substitute -- most likely ethanol, analcohol made from grain. The issue went beyond California -- way beyond. Midwesterngrain growers were lobbying Washington to continue the oxygenate requirement. But with2California burning 14 billion gallons of gasoline a year, it was uncertain whether there wasenough ethanol available, and there were predictions that such a shift could add billionsof dollars to gasoline prices.Davis resolved his dilemma in characteristically risk-minimizing fashion, ordering a delayedphaseout, taking effect in 2003, in hopes that the federal government would lift theoxygenate requirement altogether. The Clinton White House seemed disposed to do it butdelayed action from fear that it would alienate Farm Belt voters and hurt Al Gore's 2000presidential prospects. And with the confusion and angst that followed the election, theoxygenate issue was still pending when George W. Bush was inaugurated.Bush had scarcely moved into the Oval Office before Davis began berating him over thestate's energy crisis, and the Bush administration jabbed back, decreeing that theoxygenate requirement would remain intact -- a move that also pleased voters in FarmBelt states where several key Senate races loom this year. Davis was forced to decidewhether to stick to the 2003 MTBE demise, thereby risking severe gasoline price hikes, ororder another delay and continue polluting the water.As usual, there was an array of side agendas. The oil industry wanted to stick with thephaseout, saying it was ready to make the transition. Methanex, a Canadian MTBE maker,sued California in federal court, alleging that the phaseout violates the North AmericanFree Trade Agreement and claiming that Davis' action was "politically motivated" bycampaign contributions to the governor from Archer Daniels Midland, the very influentialproducer of ethanol. While California's members of Congress were demanding an end tothe oxygenate requirement, thereby taking Davis off the political hook, the Senate's topDemocrat, Tom Daschle, was insisting that it remain, a gesture to his South Dakota graingrowers. Daschle eventually agreed to a lesser amount of ethanol.3A week ago, Davis finally acted and once again tried to buy time -- if nothing else topostpone the collision over ethanol until after the November election. He delayed MTBEelimination for another year, arguing that if ethanol had to be substituted, gas priceswould soar. "I'm not going to allow Californians to be held hostage by another out-of-state energy cartel," he declared in a campaign-style sound bite.The decision alienated environmentalists and water quality officials, but given theunpalatable choices before him, it was probably Davis' least risky political course. A gasprice spike would have been immediate; the health problems, if any, from MTBE will arriveyears after his governorship is a page in the history
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