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21.

22.

23.

24.

The1999ExecutiveOrder:

On25thMarch1999,approximatelyfourmonthsafter

thepublicationoftheUCReportandonemonthafterthepublichearings,Governor

Davisissuedthe1999ExecutiveOrder.Thebasisfortheorderwasstatedas

follows:

“ThefindingsandrecommendationsoftheU.C.report,publictestimony

andregulatoryagenciesarethat,whileMTBEhasprovidedCaliforniawithclean

airbenefits,becauseofleakingundergroundfuelstoragetanksMTBEposesan

environmentalthreattogroundwateranddrinkingwater”31.

Inaccordancewiththosefindingsandrecommendations,bythe1999Executive

Order,GovernorDaviscertifiedthat“onbalancethereissignificantrisktothe

environmentfromusingMTBEingasolineinCalifornia”.32The1999Executive

OrderalsotaskedtheCaliforniaEnergyCommission（“CEC”）inconsultationwith

CARB,withdeveloping“atimetablebyJuly1,1999fortheremovalofMTBE

fromgasolineattheearliestpossibledate,butnotlaterthanDecember31,2002”33.

The1999ExecutiveOrdernextdirectedCARBtorequestanimmediatewaiverof

thefederalreformulatedgasolineoxygenaterequirementfromtheAdministratorof

theUSEPA34（asteprecommendedintheUCReport）.Suchawaiver,ifgranted,

wouldhavepermittedCaliforniatouseRFGthatachievedairqualityrequirements

withoutanyoxygenate.

The1999ExecutiveOrderalsodirectedseveralCaliforniaagenciestoprepare

reportsontheenvironmentalandhealthaffectsofusingethanolasanoxygenate35

31

32

33

34

35

1999ExecutiveOrder,preamble（1JSTab1（c））.

Id.

1999ExecutiveOrder,para.4（1JSTab1（c））.

Id.,para.2.

Id.,para.10.

PartIII-ChapterA-10

（again,asteprecommendedintheUCReport）.Thesereportsweretobepeer-

reviewedandpresentedtotheEnvironmentalPolicyCouncilforitsconsideration

by31stDecember199936.

25.

26.

27.

InthecertificationmadebyGovernorDavisatthetimeofthe1999Executive

Order37,GovernorDavisnotedthathehadorderedthestudyofethanolhaving

“learn[ed]alessonfrom[California’s]experiencewithMTBEand[recognisingthe

necessityof]carefullyassess[ing]theenvironmentalimpactsofotheroxygenates

suchasethanolbeforecommittingtoitswide-spreaduseinCalifornia’sgasoline

supply”.

The1999RequestedWaiver:

On12thApril1999,GovernorDaviswrotetoUS

EPAAdministratorCarolBrownerrequestingawaiveroftheoxygenate

requirementinthefederalRFGprogram38.GovernorDavismadethepointthat

manyCaliforniarefinerieshadthecapabilityofproducingsignificantamountsof

gasolinethatprovidealloftherequiredemissionreductionswithoutusingMTBE

oranyotheroxygenate.HefurthernotedthatCalifornia’sRFGregulations

accomplishtheneededemissionreductionswithoutrequiringaminimallevelof

oxygen.GovernorDavispressedCalifornia’scaseforawaiverwithasecondletter

toAdministratorBrowneron15thDecember199939andalettertoPresident

George

W.Bushon22ndMay200140.

TheUSEPAdeniedCalifornia’srequestfortherequestedwaiveron12thJune

36

37

1999ExecutiveOrder,para.10（1JSTab1（c））.

CertificationofHumanHealthorEnvironmentalRisksofUsingGasolineContainingMTBEinCalifornia

（16JSTab35at1289）.

38

LetterFromGovernorDavistoCarolM.Browner,Administrator,USEnvironmentalProtectionAgency,

12thApril1999（16JStab65）.

39

40

16JSTab66at1581.

16JSTab67at1583.

PartIII-ChapterA-11

2001.Inresponse,on13thAugust2001,GovernorDavisannouncedhewas

challengingthedenialinthefederalcourt41.On17thJune2003,theUnitedStates

FederalCourtofAppealsfortheNinthCircuitissuedadecisionholdingthattheUS

EPAhadabuseditsdiscretionbydenyingCalifornia’swaiverrequestwithout

havingevaluatedtheeffectofanoxygenatewaiveronCalifornia’seffortsto

complywithparticulate-matterstandards42.

28.

29.

BasedontheNinthCircuit’sdecision,GovernorDavisstatedhishopethat“the

EPAwill（now）takeahardlookatthiscourtdecision,realizetheywerewrongand

giveCaliforniawhatitneeds:

theabilitytomakegasolinewithorwithout

oxygenatesasconditionswarrant”43.Approximatelytwoweekslater,on6th

August2003,GovernorDaviswrotetoActingEPAAdministrator,Marianne

Horinko,reiteratingCalifornia’srequestforawaiverinthelightofthecourt’s

decision44.

CaliforniaSenateBill989:

On8thOctober1999,GovernorDavissignedintolaw

CaliforniaSenateBill989.TheBillwasintendedtoplaceintostatutethe

ExecutiveOrderD-5-99issuedbyGovernorDavison26thMarch1999andtoenact

severalotherprovisionsoflawdesignedtoprotectgroundwateranddrinkingwater

fromMTBEcontamination45.TheBillhadbeenproposedbytheAssociationof

CaliforniaWaterAgencies,anassociationof400pluspublicagenciesandmutual

watercompaniesresponsibleformostofthewaterdeliveredtoCalifornia’s

41

PressRelease,OfficeoftheGovernorofCal.,GovernorDavisSuesUSEPAoverGasolineAdditive,13th

August2001（17JStab117）.

42

43

Davisv.EPA,336F.3d965,969（9thCir.2003）（16JSTab41at1331）.

PressRelease,OfficeofGovernorDavis,StatementRegardingFederalCourt’sMTBERuling,17thJuly

2003（17JStab116）.

44

LetterFromGovernorDavistoMarianneLamontHorinko,ActingAdministrator,USEnvironmental

ProtectionAgency,6thAugust2003（16JSTab68at1585）.

45

SB989,SenateBill–History–18JSTab128at2512.

PartIII-ChapterA-12

farmers,businessesandcities46.

30.

31.

The1999CalEPAEthanolReport:

InDecember1999CalEPAissueditsreport,

entitled“HealthandEnvironmentalAssessmentoftheUseofEthanolasaFuel

Oxygenate”whichhadbeenpreparedasrequiredbyGovernorDavis’Executive

Order（the“1999CalEPAReport”）47.Thisreportwasco-writtenbyseveral

agencieswithintheCalEPA,includingCARB,theStateWaterResourcesControl

Board（“SWRCB”）andtheOfficeofEnvironmentalHealthHazardAssessment

（“OEHHA”）.ThepurposeofthereportwastoaddressTopic10oftheExecutive

OrderwhichhaddirectedthatCARBandSWRCB:

“shallconductan

environmentalfateandtransportanalysisofthehealthrisksofethanolinair,

surfacewater,andgroundwater...”andthatOEHHA“shallprepareananalysisof

thehealthrisksofethanolingasoline,andanyresultingsecondarytransformation

products”.

Asaresultofthe1999CalEPAEthanolReport,theCaliforniaEnvironmentPolicy

Commissionfoundthat,althoughfurtherresearchwaswarranted,theimpacts

associatedwiththeuseofethanolwouldbesignificantlylessandmoremanageable

thanthoseassociatedwithcontinueduseofMTBE48.Asregardsthepotential

healthriskofethanolingasoline,thereportconcluded,interalia,that“thereareno

substantivedifferencesinthepublichealthimpactsofthedifferentnonMTBEfuel

formulations[it]considered”.Inparticular,“althoughreplacementofMTBEby

eitherethanolornon-oxygenatedfuelisexpectedtohavesomebenefitsintermsof

watercontamination,thesecannotbequantifiedatpresent.Fromouranalysis,these

46

AssociationofCal.WaterAgencies,MoreAboutACWA,at

more_about_acwa.asp.

47

48

8JS180throughto9JS184.

Summ-1（25JSTab15）.

PartIII-ChapterA-13

substitutionshavenosubstantialeffectsonpublichealthimpactsofairpollution”49.

AsregardstheairqualityimpactsoftheuseofethanolinCaliforniaReformulated

Gasoline,CalEPA’sAirResourcesBoardconcludedthat“solongasCaRFG3

regulationsaddressedthepotentialforethanoltoincreaseevaporableemissionsand

causemorerailandtrucktraffic,thesubstitutionofethanolandalkalytesforMTBE

inCalifornia’sfuelsupplywillnothaveanysignificantairqualityimpacts”50.And

whiletheauthorsdidnotconsiderethanoltobeacarcinogenbyinhalation,they

concluded“evenifoneacceptsthatethanolshouldberegardedasahuman

carcinogenbytheinhalationroute...theriskspredictedonthisbasisfromethanol

arenegligible51.

32.

33.

The2000CaRFG3Regulations:

On16thJune2000,followingapublichearingon

9thDecember1999,CARBadoptedtheCaliforniaReformulatedGasolinePhaseIII

Standards（“CaRFG3”）whichincludedaprohibitionontheuseofMTBEin

gasolinebeginning31stDecember200252.CARBalsorequiredsulphurand

benzenelevelsinCaliforniagasolinetobereduced53.Theseregulationsbecame

effectiveon2ndSeptember2000.

Initsresolutiongrantingapprovaltoadopttheregulations,CARBfoundthat:

“MTBEishighlysolubleinwaterandwilltransfertogroundwaterfaster,

fartherandmoreeasilythanothergasolineconstituentssuchasbenzene

whengasolineleaksfromundergroundstoragetanksandpipelines;even

upgradedstoragetanksarenotleak-proofandfutureleaksfromasmall

percentageofthethousandsofgasolinestoragetanksinthestatewill

49

50

Volume1,pp.1-22（25JSTab6）.

Volume3,AirQualityImpactoftheUseofEthanolinCaliforniaReformulatedGasoline,p.3（13AJSTab

8）.

51

52

53

Volume5,ResponsetoComments,p.B-32（25JSTab6）.

Cal.CodeRegs.Tit.13,§2262.6（a）（2000）（14JStab10,18）.

Id.,§2262.3（a）.

PartIII-ChapterA-14

continueinthefuture;MTBEhasbeendetectedinthepublicdrinkingwater

suppliesinSouthLakeTahoe,SantaMonica,LosAngeles,SanFrancisco,

SantaClara,andotherlocations;

Alongwithtoxicologicalconcerns,lowlevelsofMTBEindrinkingw