Document J3ZBDD0ewd1R5bnoLgKRNra

,' -N WILLIAM J. DRIVER Prtildint MANUFACTURING CHEMISTS ASSOCIATION AVENUE, N. W.* WASHINGTON, D. C. 20009 * (202) 483-6126 1970 September 10, 1970 TO MEMBERS OF THE MCA BOARD OF DIRECTORS Subject: Letter to the Chairman of the House Ways & Means Committee on the Proposed Tax on Lead Additives in GasoLine. Gentlemen: Enclosed for your approval or comment is a draft of a letter to the Chairman of the House Ways and Means Committee opposing the Administration's proposal for a tax on lead additives. This letter was prepared by the MCA Tax FoLicy Committee. Hearings before the Ways and Means Committee on this tax proposal began yesterday with Administration witnesses urging passage of the measure. The Committee will receive testimony from public witnesses on Monday, September 14, 1970. Our statement must reach the Committee by Septem ber 18, 1970, May I have your comments or concurrence, by wire, telephone, or letter, prior to that date. _ AP00037302 DRAFT Honorable Wilbur D. Mills Chairman Committee on Ways and Means U. S. House of Representatives Washington, D. c. 20515 Dear Mr. Chairman: The Manufacturing Chemists Association wishes to take this opportunity to present its views on the President's proposal for a tax on lead additives used in the refining of gasoline. The Manufacturing Chemists Association is a nonprofit trade associa tion of 170 United States member companies representing more than 90 percent of the production capacity of basic industrial chemicals within this country. The legislation in question would impose a tax of $4.25 per pound on lead used in motor fuel additives. The objective of the tax, according to the secretary of the Treasury, is "to create an immediate, effective incentive for the rapid conversion to gasoline with a low, and eventually lead-free content." The proposed tax is called a vital element in the Administration's priority program to reduce air pollution. This Association recognizes that the problem of controlling air pollution is of major concern to all--State and Federal governments, industry, and the public at large. Extensive hearings AP00037303 DRAFT Honorable Wilbur D. Mills -2- on this subject have been conducted by committees of this Congress and previous Congresses. Almost three years ago Congress enacted the Air Quality Act of 1967, which dealt comprehensively with the entire problem of air pollution, including the subject of fuels and fuel additives. In June of this year the House of Representatives passed H.R. 17255, the Clean Air Act Amendments of 1970, which would tighten controls further. The Senate Public Works Committee now has a related version of this measure under consideration, and passage of this legislation in this session of Congress is likely, we believe that this is the proper way to address the issue of air pollution control--not by a piecemeal measure which singles out one alleged pollutant and attempts to tax it out of existence by a tax which is 450 percent of the present sale price of lead used in gasoline. The chemical industry is not opposed to strict air pollution controls; in fact, it is strongly in favor of the development of a sound approach to accomplish this objective. We believe that legislation concerning the subject of motor fuels and additives should be considered along with all related air pollution problems. For example, a determination should be made of the consequences of shifting to lead-free gasoline. In a May 1970 report, the Interior Department released the results of a study which showed that the AP00037304 DRAFT Honorable Wilbur D. Mills - 3- removal of lead from gasoline would seriously worsen the major pollution problems of automobiles rather than remove them. This study showed that the photo-chemical reactivity of automotive emissions was found to be increased by as much as 25 percent when V /;/ fuel was changed from typical U. S. leaded gasoline to prototype^ unleaded gasoline of comparable octane quality. The increase was attributed to characteristics of the blending components that w used to obtain the required octane quality without using lead. The basic justification offered for proposing the elimination of lead alkyls from motor fuel is that more effective and longer lasting emission control devices could then be developed for general use. However, catalytic mufflers that could benefit from the use of lead-free fuel are not now available. Thus the immedi- ate effect of lead reduction would be to increase all emissions (except lead), with a resultant increase in air pollution, as indicated in the above-mentioned interior study report. The purpose of this tax proposal is to encourage each gasoline refiner to accomplish the transition from leaded gasoline to unleaded gasoline as soon as possible. This is done by imposing this tax so as to increase the cost of formulating gasoline with a lead additive. It is estimated that the proposed tax will result in a first year revenue gain of approximately $1.6 billion, AP00037305 Honorable Wilbur D. Mills 4 which will diminish as the incentive takes effect and lead-free or low-level lead gasoline is marketed in greater volume. But this tax is eminently unfair. It is imposed on only one fuel additive--lead--and leaves alone any other fuel components without imposing any tax on them. This is a discriminatory tax which has a unique purpose behind it. Generally/ taxes are designed to raise revenue. This tax is designed to raise revenue only for a short period of time after which it is hoped that all of the gasoline refined in this nation will be unleaded? thereafter no revenue would be received under these provisions. As has been noted by many people commenting on this particular tax, if the tax does accomplish its objective then there will be no revenue gain as a result of this imposition. On the other hand, if it does produce the desired revenue, it will have been a failure as a means of pollution abatement. The chemical industry is in favor of taking steps to protect our environmental resources and to repair the results of past neglect. However, this Association believes that the proposed tax would be discriminatory as a revenue producing measure and in effective in achieving significant improvement in the quality of our air or the health of our citizens. In our opinion, it is a AP00037306 DRAFT Honorable Wilbur D. Mills -5 - piecemeal approach without a proper evaluation of the adequacy or the need for legislation in this area. Sincerely, W, J. Driver AP00037307 p F. FOX & CO,, INC. V. J){(JOURNAL OF COMMERCE, Friday, September 4, Internal Combustion Engine Tops in Race By MABVEC B. MACK a ceramic honeycomb structure PASADENA, .Calif., Sept. 3-|co**s222 ja.-a. stainless--eteel The internal combustion engine spreadeagled the field In the hniiglwg T |<j plnrtAd-UMv-lli^ WIK. tomobile as dose al nnsslhlf to the exhaust manifold. The hy- clean air car race'. Awards for the transcontinental clear air ide in the exhaust are reduced car race -were announced here to water and carbon dioxide tonight at a banquet at the Cali fomia Institute of Technology, which sponsored the race with by the action.of the platinum catalyst. Richard C. Cogau, president of Engelhard Industries, said. the Massachusetts Institute of following1 We announcement of Technology. the awards: ' Belying on Engkhard Indus "Automobiles, trucks and bus tries* "PTX" catalytic convert es account for more than half ers ing as up a key element their exhaust, in the clean inter of all the country. In air the pollution cities, it in this is up to nal combustion engine came out 90 per cent. on top, outperforming its con "We, hope the Engelhard ex temporaries--steam, electricity, haust gas purifier makes a con propane, alcohol, and turbine, tribution toward cleaning up diesel and hybrid engines. the air in our cities and coun Public Is Winner' tryside. We are working toward David Begone, chairmen of that end." the jidging committee, who is Winners the dean of the D. Thayer A 1971 Capri entered by School of Engineering at Dart- Wayne State University, Detroit, mouth, in announcing the win was named the overall winner ners said: over 33 lew pollution vehicles. "The public Is another of the The driving team of the Ca winners of this race." He add pri, which was powered by an ed that the dedication on the Internal combustion engine burn part of the students and the en ing unleaded gasoline, was Brian gineering ingenuity which went Geraghty, Mike Riley, John Ka into the race will point the way rol and Alden Raquepau, a 11 toward a near '`pollution-free" Wayne State students. environment. It was tiie consensus here thal Performance, and pollution elapsed emission time were the race demonstrated! computed to determine the win No substitution for the Inter ner. Class winners were: nal combustion engine horizon. is on the --Internal combustion, propane gas, Worcester liquid Poly More than 50 per cent of the technic Institute, 1970 Nova, pdlutants can be removed from Stephen Hunter, Edward C. the combustion engine by sim Lowe, Edward Kaleskas. ply developing technology. --Internal combustion, other Points the Way single fuels, Stanford University, The. precious metal exhaust Stanford, 1970 Gremlin burning gas purifier is a clear leader alcohol, Dana Andrews, Henry in the race to develop devices Adelman, Sid Wax, Robert Byer. which will accomplish this --All electric, Cornell Univer clean up. "* -- sity, Ithaca, N.Y. 1970 EFP se - Englchard exhaust gas puri dan, Mark Hoffman, Jane Hers- fiers were on 26 of the 37 en- ey, Foster Hinshaw, Peter Lord. .tries which finished and on all --Gas turbine MIT, 197G the Internal combustion entries Chevrolet C-10, Michael L. Beni which were winners. nett, Stanley Bone, George W The getalytio- Converter Is a Negoro, Dieter R. Herrmann. atinurn catalyst deposited on --Steam no entrants finished. <2<? '.vT. HCfr AP00037308