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July 14, 2000

Ryan Asks U.S. EPA To Change Gas Productions Rules -- Again

SPRINGFIELD - Governor George H. Ryan today expressed concern that federal officials have known for weeks that the EPA's reformulated gasoline rules were the primary cause of this summer's record gas price surge.

In his seventh letter to EPA officials, Ryan again asked EPA Administrator Carol Browner to suspend gas production rules under the second phase of the federal Reformulated Gasoline (RFG) Program in order to prevent future gas price surges.

Despite a determination by the U.S. Department of Energy that the new reformulated gasoline rules were "the primary causes" of high gasoline prices, the EPA has refused to grant Illinois a temporary waiver of the new rules in order to help lower prices at the pump. "This is the seventh time I've asked the EPA to suspend the new gas production rules in order to bring more stability to gas prices in Illinois. If they're not going to listen to us, they should listen to the Department of Energy. There no longer is any credible reason not to suspend these rules until we can work out a program that keeps gas prices stable for the long haul," Ryan said.

"It's outrageous that only a few days after gas prices climbed to $2 or better in the Chicago area federal officials knew full well that the policy was the culprit."

Ryan added that as a result of the EPA's policies, the Illinois General Assembly was forced to deal with high gas prices by suspending the state's 5 percent sales tax on gasoline. While this action kick-started a reduction in pump prices throughout the state, the tax suspension will cost the state treasury $180 million in revenue.

The Energy Department's findings on the gasoline production rules were outlined in a June 5 memo to U.S. Energy Secretary Bill Richardson which notes that gas prices in the Chicago area and southeastern Wisconsin are affected by "an RFG formulation specific to the area that is more difficult to produce; higher regional demand; high regional refinery utilization rates; limited alternative supply sources; limited transportation links; and lower gasoline inventories relative to the rest of the country."

In six letters to the EPA and federal officials since May of 1999, Ryan has asked the agency to temporarily suspend the new RFG rules until it could be determined how the new rules would affect pump prices in the Chicago area. The suspension of these rules would not harm air quality in the Chicago area because oil companies would still be required to use cleaner-burning gas made under the first phase of the RFG program.

Ryan said despite the fact that gas prices have dropped substantially in the last few weeks, it is still important for the EPA to suspend the second phase of the RFG program because of new concerns about unstable gasoline pump prices. The federal Energy Information Administration warned this week that gas prices might increase again before the summer is over.

"We already know that high gas prices imprison people in their homes, cripple the economy and boost the prices for consumer goods," Ryan said. "The EPA should do everything it can to prevent any further surges in gas prices this summer. Everyone now knows what the problem is and everyone now knows what the solution is."

July 14, 2000

The Honorable Carol M. Browner
United States Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460

Dear Administrator Browner:

I am writing with great concern regarding a recent Department of Energy internal memorandum which stated that the causes for the high gasoline prices in the Chicago-Milwaukee area were caused primarily by the extremely tight supplies in the region and by the new reformulated gasoline (RFG) regulations that went into effect on June 1 of this year.

What is most troubling is that we anticipated that there could be problems with the implementation of the new regulations long before they took effect and I wrote to you on at least five different occasions to act to address the potential problems with Phase II of the RFG program prior to the summer months.

Unfortunately, you chose not to act on my repeated requests. In fact, this is the seventh letter I have written to you in the last 14 months and I have yet to get a formal reply from your agency as to how you propose to remedy this urgent matter. This is unacceptable to me, and more importantly, it is unacceptable to the people of Illinois. Consumers in Illinois deserve much better than that.

The Illinois General Assembly and I worked to alleviate the burden on Illinois consumers through the enactment of a six-month suspension of our gasoline sales tax. We took this significant action in an effort to make a real difference in the lives of hard working women and men throughout Illinois.

However, more can and should be done. Thus, I am repeating the requests that I have made to you to suspend the Phase II RFG production rules and I further request that you enact the carbon monoxide (CO) credit that Illinois EPA proposed months ago. In addition, Speaker Hastert and members of the Illinois Congressional Delegation have also have urged you to grant credits that recognize the positive impact that ethanol's higher oxygen content has had in reducing carbon monoxide emissions and improving overall air quality.

While I understand you issued a notice of proposed rulemaking on this issue on June 30, your procedure will take months before it could be enacted. It is clear that under your authority as U.S. EPA Administrator, you could have granted this credit months ago. Because of your delay, it will take at least another 60 days to finalize this rule, putting us into the fall driving season when Phase II RFG regulations are no longer required.

I look forward to hearing your response.


Cc:President William J. Clinton
Vice President Al Gore
Speaker J. Dennis Hastert


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