To amend section 211 of the Clean Air Act to prohibit the use of MTBE, to provide flexibility within the oxygenate requirement of the Environmental Protection Agency's Reformulated Gasoline Program, to promote the use of renewable ethanol, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited at the ``Clean Air and Water Preservation Act 
of 2001''.

SEC. 2. FINDINGS.

    The Congress finds that:
            (1) The oxygenate requirement of the reformulated gasoline 
        (``RFG'') program has proven effective in reducing emissions of 
        exhaust hydrocarbons, nitrous oxide and carbon monoxide, known 
        precursors to smog.
            (2) One oxygenate chosen by gasoline refiners to comply 
        with the Clean Air Act regulations, methyl tertiary butyl ether 
        (``MTBE''), has been discovered in water sources throughout the 
        nation.
            (3) MTBE renders water undrinkable and is considered a 
        probable carcinogen by the Environmental Protection Agency.
            (4) MTBE is highly soluble in water and slow to degrade. 
        Only one gallon of MTBE is required to contaminate 26 million 
        gallons of water.
            (5) An alternative oxygenate, ethanol, is a biobased 
        product which produces the same reductions in emissions, is not 
        as soluble in water, biodegrades rapidly, and is considered 
        safe for the environment.
            (6) The oxygenate requirement of the RFG program requires 2 
        percent by weight of an oxygenate be added to gasoline. Ethanol 
        contains approximately twice as much as oxygen as MTBE, 
        therefore supplying the RFG program with sufficient ethanol to 
        replace MTBE would require half the volume of MTBE currently 
        used.
            (7) The ethanol industry is expanding rapidly. Production 
        capacity in 1998 was estimated at 1.8 billion gallons. New 
        production facilities that came on line in 1999 has greatly 
        increased this capacity.
            (8) The Department of Agriculture projects the domestic 
        ethanol industry will be able to produce the approximately 3.1 
        billion gallons of ethanol necessary to replace MTBE by 2004.
            (9) The U.S. Department of Agriculture estimates that 
        replacing MTBE with ethanol will (A) increase the demand for 
        corn for ethanol by more than 500 million bushels each year, 
        improving the price of corn by 14 cents per bushel each year 
        and increasing average total farm cash receipts by $1 billion 
        each year; (B) create 13,000 new jobs; and (C) increase average 
        US agricultural net export value by more than $200 million and 
        reduce US import value of MTBE by $1.1 billion for an improved 
        US trade balance of $1.3 billion each year.
            (10) Ethanol is an energy efficient fuel. A 1995 report by 
        the USDA estimated one gallon of ethanol provides 25 percent 
        more energy than production requires. Other studies show the 
        net energy gain potential of ethanol could exceed 150 percent 
        when state-of-the-art agricultural and production technologies 
        are used.
            (11) Ethanol is proven to enhance the performance of 
        automobiles. Currently, all vehicle manufacturers approve the 
        use of 10 percent ethanol blended fuels.
            (12) Replacing MTBE with ethanol would maintain the 
        emissions reductions obtained through the RFG program without 
        the water contamination problems associated with MTBE.
            (13) When implementing the Clean Air Act Amendments of 
        1990, the Environmental Protection Agency required, by 
        regulation, that each gallon of gasoline sold in the RFG 
        program contain a minimum of 1.5 percent by weight of 
        oxygenate. This was not the intent of Congress in passing the 
        oxygenate requirement and prohibits the most efficient use of 
        oxygenates. Lifting this regulatory requirement will provide 
        refiners more flexibility for complying with the RFG program 
        and provide high performance gasoline year-round.
            (14) Providing such flexibility in the use of oxygenates 
        could lead to an increase in the use of aromatics, many of 
        which are known carcinogens. Therefore, a limit on the amount 
        of aromatics added to gasoline is necessary to protect public 
        health.
            (15) Providing such flexibility in the use of oxygenates 
        could lead to an increase in emissions. Therefore, a 
        prohibition against an increase in emissions above the level 
        achieved by RFG gasoline is necessary to protect air quality.

SEC. 3. USE OF MTBE AS A FUEL ADDITIVE.

    (a) MTBE Ban.--Section 211(c) of the Clean Air Act (42 U.S.C. 
7545(c)) is amended by adding at the end of paragraph (1) the 
following: ``The regulations under this paragraph shall prohibit the 
use of methyl tertiary butyl ether (MTBE) as a fuel additive.''.
    (b) Regulations.--The Administrator of the Environmental Protection 
Agency shall amend the regulations under section 211(c)(1) of the Clean 
Air Act as promptly as practicable after the date of enactment of this 
Act to conform to the amendment made by subsection (a) of this section.
    (c) Effective Date.--Subsection (a) of this section shall take 
effect upon the expiration of the three-year period beginning on the 
date of the enactment of this Act.
    (d) Labeling.--During the period beginning on the date of enactment 
of this Act and ending three years from the date of enactment, the 
Administrator of the Environmental Protection Agency shall require any 
person selling gasoline that contains methyl tertiary butyl ether at 
retail to prominently label the fuel dispensing system for the gasoline 
with a notice that the gasoline contains methyl tertiary butyl ether 
(`MTBE').

SEC. 4. EXISTING MTBE WATER CONTAMINATION.

    (a) State Source Water Assessment Programs.--Section 1453(a) of the 
Safe Drinking Water Act is amended by adding the following at the end 
thereof:
            ``(8) MTBE Contamination.--The Administrator shall amend 
        the guidelines under this subsection to require that State 
        source water assessment programs be revised to prioritize 
        groundwater areas and aquifers that have been contaminated, or 
        are most vulnerable to contamination, by methyl tertiary butyl 
        ether (`MTBE'). Each such revision shall be submitted and 
        approved or disapproved by the Administrator in accordance with 
        the same deadlines as applicable to the original program under 
        paragraph (3).''.
    (b) EPA Cleanup Guidelines.--Section 1442 of the Safe Drinking 
Water Act is amended by adding the following at the end thereof:
    ``(f) Cleanup Guidelines for MTBE.--The Administrator shall develop 
a clear set of technical guidelines to assist States in the 
investigation and cleanup of methyl tertiary butyl ether (`MTBE') in 
groundwater.''.

SEC. 5. ALLOWING FOR OXYGEN AVERAGING WITHIN THE RFG PROGRAM.

    (a) Amendment of Clean Air Act.--Subparagraph (B) of section 
211(k)(2) of the Clean Air Act and clause (v) of subparagraph (A) of 
section 211(k)(3) of such Act are each amended by inserting ``an 
average of'' before ``2.0 percent''.
    (b) Regulation Invalidated.--The provisions of section 80.41(b) of 
part 80 of title 40 of the Code of Federal Regulations establishing a 
per-gallon minimum oxygen content (percent, by weight) shall cease to 
have any force and effect on the date of the enactment of this Act.

SEC. 6. ANTI-BACKSLIDING.

    (a) Ozone Forming Potential.--Section 211(k)(1) of the Clean Air 
Act is amended by adding the following at the end thereof: ``No later 
than June 1, 2001, the Administrator shall revise the regulations under 
this paragraph as necessary to ensure that the ozone forming potential, 
taking into account all ozone precursors (including volatile organic 
compounds, oxides of nitrogen, and carbon monoxide), of the aggregate 
emissions during the high ozone season (as defined by the 
Administrator) from baseline vehicles when using reformulated gasoline 
does not exceed the ozone forming potential of the aggregate emissions 
from such vehicles when using reformulated gasoline that complies with 
the regulations that were in effect on January 1, 2000, and applicable 
to reformulated gasoline sold in calendar year 2000 and thereafter.''.
    (b) Aromatic Hydrocarbon Content.--Section 211(k)(2) of the Clean 
Air Act is amended by adding the following new subparagraph at the end 
thereof:
                    ``(E) Aromatic hydrocarbon content.--The aromatic 
                hydrocarbon content of the gasoline shall be not 
                greater than the average aromatic hydrocarbon content 
                of reformulated gasoline sold in covered areas for use 
                in such vehicles during the year 2000.''.

SEC. 7. DEVELOPING OXYGENATE ALTERNATIVES TO MTBE.

    The Secretary of Energy and the Administrator of the Environmental 
Protection Agency shall evaluate by December 31, 2001 and report to the 
President and the Congress on the potential for development of 
oxygenate alternatives to methyl tertiary butyl ether (``MTBE'') not 
otherwise identified in this Act, and shall evaluate what steps, if 
any, would be appropriate to foster development of such alternatives 
should they be found to be an acceptable substitute for MTBE.

SEC. 8. TRANSITION TO ETHANOL.

    It is the Sense of the Congress that the United States should 
promote renewable ethanol to replace methyl tertiary butyl ether 
(``MTBE'') and encourage oil refiners to make the transition from MTBE-
blended fuel to ethanol-blended fuel as soon as possible.

Summary: Clean Air and Water Preservation Act of 2001 - Amends the Clean Air Act to prohibit the use of methyl tertiary butyl ether (MTBE) as a fuel additive. Makes such prohibition effective three years after this Act's enactment date. Amends the Safe Drinking Water Act to require the Administrator to amend certain guidelines to require State source water assessment programs to be revised to prioritize groundwater areas and aquifers that have been contaminated, or are most vulnerable to contamination, by MTBE.Revises the oxygen content requirement for reformulated gasoline under the Clean Air Act to require the oxygen content to equal or exceed an average of two percent by weight (currently, equal or exceed two percent by weight). Invalidates Federal regulations that establish a per-gallon minimum oxygen content (percent, by weight). Limits the hydrocarbon content of reformulated gasoline to the average content of such gasoline sold in covered nonattainment areas during the year 2000.Expresses the sense of Congress that the United States should promote renewable ethanol to replace MTBE and encourage oil refiners to make the transition from MTBE-blended fuel to ethanol-blended fuel as soon as possible.