APPENDIX

The Minority Opinion


With regard to Motion No.83 that, notwithstanding Rule 98, the Standing Senate Committee on Energy, the Environment and Natural Resources present an interim report, before submitting its final report on the Bill C-29, to regulate interprovincial trade in and the importation for commercial purposes of certain manganese-based substances, relating to its findings on the following questions:

(1) Is MMT-based petroleum the cause of OBD malfunctioning?

(2) Does MMT in gas cause a health hazard to Canadians?

(3) Does MMT in gas cause direct damage to the environment?

Pursuant to this motion, the majority of the Committee has adopted an Interim Report. The Interim Report was written before the transcripts of the testimony of the Minister of Environment were available for a careful and considered review of the evidence he supplied. A minority of the members disagree with the content and the conclusions of that report. We therefore present this minority opinion. The enclosed comments constitute the opinion of:

________________________ ________________________

Senator John Buchanan Senator Ron Ghitter, Q.C.

(Nova Scotia) (Alberta)

________________________ ________________________

Senator Ethel Cochrane Senator Noël A. Kinsella

(Newfoundland) (Fredericton-York-Sunbury)

Submitted this day, 4th March, 1997, to the Standing Senate Committee on Energy, the Environment and Natural Resources.

Introduction

As a part of its consideration of Bill C-29, the Senate of Canada passed the following motion on February 4th, 1997:

That, notwithstanding Rule 98, the Standing Senate Committee on Energy, the Environment and Natural Resources present an interim report, before submitting its final report on the Bill C-29, to regulate interprovincial trade in and the importation for commercial purposes of certain manganese-based substances, relating to its findings on the following questions:

(1) Is MMT-based petroleum the cause of OBD malfunctioning?
(2) Does MMT in gas cause a health hazard to Canadians?
(3)Does MMT in gas cause direct damage to the environment?

Is MMT-based petroleum the cause of OBD malfunctioning?

At the core of the government's rationale to pass Bill C-29 is the question of whether MMT causes or contributes to the failure of automobiles' on-board diagnostic systems (OBD) systems. If a car's OBD system does not function properly, a motorist may be unaware if his/her car is emitting an unacceptable level of pollutants resulting in reduced air quality.

During the first hour of the Committee's hearings, Mr. Tony Clark, Assistant Deputy Minister, Environmental Protection Service, Environment Canada, stated that there were no direct health or environmental reasons which would allow the government to ban MMT. Environment Canada admitted that it had not, nor had any other department of government conducted itself, nor contracted an objective third party to conduct independent testing on MMT and its effects, if any, on OBD systems.

It has been suggested by Environment Canada Official Frank Vena that: "In essence, what we have seen is that in a limited number of tests that data is still inconclusive¼ We don't have a lot of data on which to say a definitive yea or nay." The basis, however inclusive, of the government's rationale for Bill C-29 is the claim of auto manufacturers that MMT damages automobiles' OBD systems – the equipment which monitors pollution leaving the vehicle.

In background material provided to the Committee by Environment Canada in December 1996 it was noted that:

"The automotive industry is so convinced of the detrimental effects of MMT that they are conducting a $10 million test program in the U.S. in order to obtain definitive evidence to support their position."

The Government is not interested in knowing the results of this "definitive" study before proceeding with Bill C-29. This is irresponsible. It is not clear why Environment Canada officials maintained that they saw no value in an independent expert panel study of the issue. The conclusions of the U.S. EPA on this matter did not convince Environment Canada to reassess their initiative to ban the importation and interprovincial trade of MMT. The conclusion of the U.S. Environmental Protection Agency on the scientific evidence presented to it, by both Ethyl and the auto manufacturers, is recorded in the United States Federal Register, Volume 58, No.235, Thursday, December 9, 1993, p.64761:

"...the EPA Administrator has determined that Ethyl has demonstrated as required (under the Clean Air Act) that use of HiTEC 3000 (MMT) at the specified concentration will not cause or contribute to a failure of any emission control device or system (over the useful life of any vehicle in which such device or system is used) to achieve compliance by the vehicle with the emission standards with respect to which it has been certified."

Officials from the Province of Nova Scotia registered their dismay before the Committee that all provincial attempts to get MMT evaluated, either at the ministerial or operational levels of the Canadian Council of Ministers of the Environment, were rejected by Environment Canada. Mr. John Donner, Executive Director, Environmental Affairs, Department of Energy, Government of Alberta added that:

"In both April of 1996 and April of 1995, Minister Ty Lund expressed concern about MMT, and specifically requested that this go through the CCME process. At the officials level, I do know we were informed that the bill would proceed. There was no opportunity to discuss its merits. It was presented as a fait accompli. It would be introduced and there was nothing we could do to discuss it or investigate it or change it."

Further evidence of widely held concern is apparent in correspondence circulated to the Committee. The Honourable Stephen Kakfwi, Co-Chair of the CEM indicated in a letter dated September 20th, 1996 to the Minister of Natural Resources that the CEM supported an impartial review process of MMT– a binding process suggested by the Canadian Petroleum Products Institute on September 11th, 1996.

Ethyl Canada , the manufacturer of MMT, presented the Committee with data indicating that MMT is compatible with the latest in OBD technology and that it serves to improve air quality by reducing automobiles' emissions of nitrogen oxides (NOx), a key component of urban smog, by significant amounts. They cited the U.S. EPA decision and were open to the idea of providing the Committee with proprietary information concerning their business interests if an in camera meeting could be arranged and if the auto manufacturers would do the same.

The Environment Canada officials stated that they had sufficient evidence from the auto manufacturers to make a determination that MMT causes OBD malfunctioning. Mr. Clark said: "The government chose to act on the basis of available information." This "available information" was not made available to the Committee. However, it is clear that Environment Canada officials are not privy to all pertinent information pertaining to this matter. Environment Canada officials appearing before the Committee had not received and were not aware of a copy of General Motors Service Bulletin #57-65-71, dated November 1995. This particular GM bulletin was issued only days after the hearings finished in the House of Commons and it goes to the heart of the assertion by the auto manufacturers that MMT is the cause of OBD malfunction. The GM Bulletin is a list of several causes of OBD malfunction. Reasons for OBD malfunctions include, but are not limited to: low fuel levels; failure to properly secure the gas cap after refueling; electronic interference caused by routine equipment such as cellular phones, stereo systems and anti-theft alarms; excessive vibrations; environmental conditions such as winter, flooding, altitude; and mud on portions of the wheels.

Additionally, that the Minister of Environment, during his appearance before the Committee, was unaware of what Ford Company executives had stated on December 12, 1996 before the California Air Resources Board (CARB) is of equal if not greater cause for concern. Ford Motor Company officials asked to have a delay on the satisfactory implementation of OBD systems until the car model year 2004 because of problems with OBD malfunctioning. Mr. John Trajnowski, speaking for Ford Motor Company, said: "...it's essential the (CARB) board revise the OBD II regulation to allow up to two monitoring deficiencies per vehicle without fines through the 2003 model year and one deficiency per vehicle without fines thereafter." The key point is that MMT is not used in California's reformulated gasoline. Therefore, the OBD malfunctions in California could not possibly be related to MMT use.

Evaluation of the Evidence

Despite the various claims we heard, there is strong evidence to support the conclusion that MMT does not cause OBD systems to malfunction. The following is a description and analysis upon which we base our conclusions and recommendations.

Under the US Clean Air Act, Ethyl Corporation was required to obtain a waiver from the EPA to permit the use of MMT in unleaded gasoline. Section 211 (f)(4) of the Act outlines the specific burden to be met by any applicant for a fuel additive waiver:

The Administrator...may waive the prohibition...if he determines that the applicant has established that such fuel additive...and the emissions products of such fuel or fuel additive...will not cause or contribute to the failure of any emission control device or system...to achieve compliance by the vehicle with the emission standards with respect to which it has been certified...

This meant that, Ethyl was forced to prove that MMT does not negatively affect auto emissions and/or pollution monitoring equipment before MMT could become available for use in American unleaded gasoline. To satisfy this requirement, Ethyl Corporation conducted what has been termed "the most extensive series of tests ever undertaken on a gasoline additive." The testing program was designed with the assistance of the EPA and US auto makers to evaluate and document the effect of MMT on automobile emissions monitoring systems. Over 120 vehicles representing a broad cross-section of automobiles driven in North America, including vehicles that meet California's low emission requirements and those equipped with the latest OBD technology were used and accumulated over 16 million kilometres for the test. For each pair of vehicles, one car used a base fuel while its twin used the base fuel plus MMT. This provided a direct comparison for evaluating the effect of MMT on OBD system's components and for rigorous statistical analysis of the data.

Following extensive review of the comprehensive fleet testing data, the EPA issued a Federal Register Notice on December 9th, 1993 stating that MMT:

...will not cause or contribute to the failure of any emission control device or system (over the useful life of any vehicle in which such a device or system is used) to achieve compliance by the vehicle with the emissions standards with respect to which it has been certified.<1>

Several witnesses including the Minister of the Environment, and indeed several Senators on the Committee, suggested that the EPA's conclusion was flawed, lenient or based on a mere technicality. However, a closer examination of the facts suggests the opposite. The EPA received and reviewed hundreds of comments and studies in coming to this evaluation, including numerous submissions from the auto companies. In arriving at this conclusion, the EPA rejected every one of the auto makers' claims that MMT harms OBD systems.

In a similar fashion, the American Automobile Manufacturers Association's (AAMA) arguments against the EPA's waiver decision were soundly rejected by the United States Court of Appeals for the District of Columbia Circuit. The Court held that:

...[t]he Administrator's analysis of the data submitted by Ethyl was careful and searching; the AAMA did not come close to proving that the Administrator's analysis of the data was arbitrary and capricious.<2>

As to the purported leniency of the EPA's analysis, the Court responded to the AAMA that the EPA had imposed new, "stringent criteria," requiring that "the additive cause no statistically significant increase in emissions."<3> Applying these stringent criteria, the Court upheld the EPA's inability to "discern any real emissions increase at all – that is, no increase that [it could] not reasonably attribute to sampling error."<4> It is also important to note that the courts did not force the EPA to grant Ethyl a waiver for MMT. Rather, it was the EPA's own independent, voluntary determination that MMT "does not cause or contribute" to the failure of emissions systems which obligated it to grant the waiver. Equally significant is the fact that under section 211 (c)(1) of the Clean Air Act, the EPA has the power to prohibit the use of any fuel or fuel additive even if it is already approved and in use. The EPA, therefore, has the power to remove MMT from the American market at any time had it credible evidence that MMT harmed the operation of emissions monitoring equipment or resulted in air pollution which adversely affected public health. No such action has been taken by the EPA.

Ethyl has also tested MMT in Canada on a small group of six 1995 Toyota Camrys purchased and driven by salespeople in Ontario. These vehicles were designed to meet the equivalent of the proposed Canadian 1998 emissions standards as published in the Canada Gazette of June 8, 1996. All of these vehicles accumulated mileage under normal everyday driving conditions, received normal maintenance, and were transported to ECS Roush Laboratories in Livonia, Michigan, an EPA approved facility, for periodic testing. Although the results of this test are anecdotal in that no comparison is made to similar conditions on MMT-free gasoline, this test did show that for this particular model, no problems were incurred in the functioning of OBD systems or in meeting the 1998 emission standards.

Buttressing Ethyl's scientific evidence is the 1996 MMT testing program conducted by ORTECH Corporation and Protect Air Inc. for the Canadian Petroleum Products Institute (CPPI). The objective of the study was to determine if MMT caused any emissions problems or if it had any effect on vehicles' emissions monitoring systems. The investigation tested 1994 to 1996 model vehicles equipped with the latest emissions technology. The test vehicles had an aggregate mileage of 11.4 million kilometres accumulated by their owners under Canadian driving conditions.

While it would be unreasonable to expect the CPPI's more limited tests to yield conclusive evidence, it is reasonable to expect sufficient information to validate claims about MMT's impact on OBD systems. Further, the CPPI proposal to accept as binding the conclusions of an independent expert panel such as the Royal Society of Canada added credibility to their position. In November 1994, over two years ago, draft `Terms of Reference' were negotiated between Béatrice Kowaliczko, Executive Director of the Royal Society of Canada (RSC) and Kerry Mattila, Vice-President of Operations, CPPI were quite fair. The objective was to review and assess the existing scientific information on the gasoline additive MMT to determine if the presence of the additive in motor gasoline has an impact on the operation of vehicle emission control components (OBD-II) and an impact on tailpipe NOx emissions. The mandate was delineated in the following manner:

1. Assemble a panel of no more than 5 persons with expertise that will include, but is not limited to, vehicle emissions testing, catalyst engineering, fuel formulation, environmental science and statistical analysis.

2. With the full cooperation of the sponsoring partners, gather all relevant testing and research data that will assist the panel.

3. Analyze the data to determine if the presence of MMT in motor gasoline has any significant impact on the operation of vehicle emission control components in the OBD-II systems and if use of the additive results in significant reductions in tailpipe NOx emissions.

4. Prepare a report on the findings and recommendations of the Panel for submission to the sponsoring partners.

The Royal Society was asked to submit its report within three months. If that process had been accepted by members of the Motor Vehicle Manufacturers Association (MVMA), or embraced by the then Minister of the Environment, the study would have been completed approximately two years ago. It is not reasonable that such a balanced approach to a contentious issue was given such short shrift. It is inconsistent that Health Canada recently commissioned an independent panel of international experts, assembled by the Royal Society of Canada, to consider the quality of the risk assessment of asbestos contained in a report by France's Institut national de la santé et de la recherche médicale (INSERM) and not commission a panel on MMT. It is unacceptable that in two recent instances senior federal Ministers and the Prime Minister himself have expressed support for the RSC panel process but have not acted on the MMT controversy in a similar, balanced fashion.

On January 16th, 1997 the Minister of International Trade and the Minister of Natural Resources, in a Press Release entitled "Canadian Government Satisfied With Findings Of Independent International Expert Panel On Asbestos Risk Assessment," expressed support for the Royal Society and noted its role in advising and providing the government and others with a knowledge base with respect to intellectual, scientific or policy issues. On February 10th, 1997, in the House of Commons, Prime Minister Chrétien expressed complete satisfaction with the RSC process and commended his Ministers for engaging such a well respected and reputable organization in a complex technical matter with both health and trade implications.

In keeping with the unexplained discrepancies permeating Bill C-29, contrary to the auto makers' assertions, the test vehicles' OBD systems showed problem free performance in 184 of 185 vehicles. One vehicle had a problem related to a faulty spark plug but there was no evidence to suggest that its failure was due to MMT. The test vehicles' emissions control performance was also excellent. The entire fleet was well within the Ontario test standard for emissions which covers hydrocarbon, carbon monoxide, and nitrogen oxides.

Problems with Claims Against MMT

In contrast to Ethyl Canada's data, the very limited information submitted by the government and the auto makers to support their allegations against MMT must be questioned – for several reasons.

First, both the government and the auto manufacturers have refused to allow Senators full access to the data used to justify their claim that MMT harms OBD systems. Indeed, these two parties are presently involved in a court case to prevent the public from having access to these data. In light of the fact that no regulatory body or court anywhere has ever accepted the auto makers' allegations against MMT, there is good reason to doubt the validity of these claims and to question why the Government of Canada has so readily accepted them. Overall, we find the absence of data supporting affirmations against MMT to be of great concern.

Given that over twenty auto companies have publicly stated that MMT damages emissions systems, one would have expected them to easily provide information to convince the EPA, US Courts, the petroleum industry, and this Committee of their position. Until Senators have full and reasonable public access to these data, allegations that MMT negatively affects automobiles' pollution monitoring equipment cannot be properly evaluated.

Particularly worrisome is the incomplete and seemingly skewed information provided to Committee members from Environment Canada in the package entitled, "Category B: MMT and Its Alleged Impact on Vehicle Emissions Control Technologies." Despite the fact that it was the most extensive testing program conducted on a gasoline additive ever, there is only one Ethyl document from its MMT waiver effort included in Category B. In contrast, the package is filled with auto company documents and letters, many of which do not even mention OBD systems and none of which refers to any scientific testing the car makers have conducted to back up their claims.

Just as the science basis for the bill is not clear, the policy basis for the bill is not clear. In his testimony the Minister said:

"These two industries have known about the problem for many years and have not been able to come up with a solution. In the spring of 1996 after taking on this portfolio, I personally asked the refiners to provide Canadians with a choice of fuels: A pump with MMT additive, and a green pump without the chemical additive."

The industry refused based on the enormous cost associated with duplicating a nation-wide distribution system to manage another fuel formulation. As suggested by Minister Marchi, his predecessor at the Department of the Environment, the Honourable Sheila Copps had made a similar offer. On Second Reading in the House of Commons she said:

"...[W]hy would the Ethyl Corporation not accede to the demand of the government that it offer the consumers a choice? Why would the CPPI producers not arrive at a gas station and let people have the choice? If this is such a fantastic product why not let the consumers decide? Why did the company refuse my offer made to them in person to have only one pump in gas stations across the country which would be MMT free?"

However, in our view, it is surprising that such an offer would be made by government. The government policy supposedly underlying this legislation cannot be viewed as consistent with the government's offer to sanction continued use of MMT. This product is now suddenly deemed by the government to be so harmful that immediate legislation is required to eliminate it from the Canadian marketplace. These contradictory positions cannot logically be reconciled.

Significant problems exist, as well, with the very limited warranty data the auto makers provided to the Committee to justify Bill C-29. Unlike the testing data which withstood the evaluation of the EPA and US courts, the warranty information submitted by the auto makers is not scientific and has not been independently evaluated. Rather, it is anecdotal and cannot be replicated. It is non-testable and largely secret. Even if the Committee was given full access to the auto makers' technical data they would not help us in our evaluation of the question at hand due to the fact that they have not undergone any independent, third party expert analysis.

Mr. Doug Bethune, an automotive technology instructor at the Nova Scotia Community College was most helpful in his analysis of MMT and its presumed effect on OBD systems, spark plug misfires and catalytic converter problems. With regard to OBD systems he noted that they were simply "post-oxygen sensors". He suggested that OBD sensors do not affect emissions. They only check the oxygen storage capacity of catalytic converters. Regarding the claims of General Motors, in particular, he said:

"...the MMT issue was raised when General Motors began putting a base metal in their catalytic converter called cerium, which has the unique property of absorbing oxygen when it is in plentiful supply and giving up oxygen when it is deficient. This is when the concern arose for MMT. It is not what MMT has that is the problem, it is what it does not have."

With regard to spark plug `misfire' he said:

"The manganese oxide on the spark plug is not a conductor. Oxides are insulators rather than conductors. It is the carbon which causes the fouling of the spark plug... It is not MMT or the residue that is causing the spark plug fouling; it is carbon."

Clearly, what is needed is an independent examination and evaluation of the auto manufacturers' warranty data to see if they support their claims and the basis for the government's legislation.

A third reason to question the claim that MMT damages OBD systems is that the very limited warranty data made public by the auto companies do not support their position. Mr. Bethune testified:

"...one would expect to find the greatest number of complaints in Canada where the average concentrations of MMT in fuel were the highest. No such correlation exists. As a matter of fact, average use of MMT in British Columbia is nearly twice as high as in Atlantic Canada. General Motors' own warranty figures show that the incidence per 1,000 vehicles rate for B.C. is nearly four times lower than it is in the Atlantic provinces."

The US EPA determined that misfires can cause deterioration in catalytic converters due to raw fuel entering the catalyst resulting in failure of emissions standards. In particular, General Motors raised spark plug misfire as a matter of great concern based on warranty comparisons between Canada and the United States. Some corroded spark plugs displaying the reddish tinge which comes from the use of MMT were offered as exhibits to us as proof of these claims.

GM's own 1994 warranty data, when correlated with the use of MMT in Canada, shows there is no relationship between the use of MMT and spark plug misfires. If the auto makers' claim was true one would expect, as Mr. Bethune suggested, that the frequency of misfires would increase with the use of MMT. Indeed, average use of MMT in Ontario and Quebec was about the same as the Atlantic provinces, but warranty claims for the Atlantic provinces were ten times higher.

It appears that there is no relationship between spark plug complaints and the amount of MMT in gasoline. Thus GM's spark plug misfires would not be caused by MMT use. Further, substantial differences in warranty terms and administration make a comparison of Canadian and US warranty claims experience a meaningless exercise in evaluating GM's claim.

Moreover, the only testing relied on by the auto makers before the Committee to back up their case that MMT damages OBD systems comes from a one car test Ford conducted in 1994. In that test, Ford thermally degraded the catalysts on the test vehicle to a point that the catalyst monitoring dashboard light illuminated showing a failed catalyst. Ford then commenced mileage accumulation on MMT-based fuel to see if the dashboard light would extinguish due to the presence of MMT. After more than 40,000 miles of operation, the light remained illuminated. Ford then changed the speed at which the catalyst monitoring check took place and the dashboard light immediately went out and Ford immediately stopped the test. Based on this result, Ford asserted that "severely deteriorated catalysts were erroneously measured by the OBD catalyst monitor system to be 'good' solely as the result of MMT-gasoline being consumed in the vehicle."<5>

Replication of the test by Ethyl has shown that the speed at which the vehicle operates for the catalyst monitoring test, and not MMT, caused the light to extinguish. Using a degraded catalyst never exposed to MMT and fuel without MMT, Ethyl exactly replicated the Ford test result (i.e. having the dashboard light extinguish) simply by changing the vehicle's speed during the catalyst monitoring test.<6>

Testing data provided to the government from Toyota also cast doubt on the claim that all twenty auto companies have found that MMT negatively affects the functioning of OBD systems. In fact Toyota found MMT has no effect on catalyst monitors. As reported in an internal Transport Canada briefing note of July 19, 1994 to Mr. D Hrobelsky, Chief, Energy and Emissions, Transport Canada, a witness before the Committee:

"Toyota has monitored the OBD-II codes on 24 Canadian and 10 US 1994 model year vehicles to determine whether MMT had significantly impacted the capability of the catalyst monitoring function in Canada. Toyota did not find any evidence that false detections made by the catalyst monitoring system occurred as a result of using MMT. Although the monitoring process did not assess the effects of MMT for the full useful life of the vehicle, Toyota is confident that the test results indicate that their OBD-II system could compensate for any potential MMT effect as more mileage is accumulated."

Toyota Canada has provided no additional test results to Transport Canada which would change their experience with MMT, although they claimed before the Committee that they had found MMT to cause OBD malfunction.

Evidence presented before the Committee seems to indicate that there are a wide range of problems being experienced with OBD systems which are entirely unrelated to MMT. Indeed, it appears as if the auto makers are presenting conflicting stories as to the causes of their OBD difficulties in Canada and the United States. In Canada, we were told that MMT is the root cause of their OBD problems. However, in the US where MMT only became available in December 1995, they have blamed individually and in combination: high altitude, temperature, sulfur, poor fuel quality, fuel vaporization, road conditions, customer driving habits, and extreme environmental conditions. Rationalizations given us by witnesses from General Motors and Toyota were unsatisfactory.

Equally unsatisfactory is the answer given to the Committee by the MVMA when asked about the extent of these problems in the United States. Speaking on behalf of Mr. Mark Nantais of the MVMA, Mr. Roger Thomas of General Motors of Canada told the Committee that: "We have had some minor teething problems, and I do stress the word minor" with the functioning of OBD systems in the United States. However, this statement appears to be incongruent with what is actually occurring in the United States. The EPA recognized in 1995 that the auto makers are experiencing significant technical difficulties with their OBD systems. The EPA Administrator stated:

...manufacturers have expressed and demonstrated difficulty in complying with every aspect of the OBD-II requirements, and such difficulty appears likely to continue into the 1996 and 1997 model years.<7>

As stated previously, the car companies have divulged similar problems in California where MMT is not in use. Recently, they have complained about false dashboard lights and petitioned the state for regulatory relief from OBD-II requirements. On December 6th, 1996, Mr. John Trajnowski speaking for the Ford Motor Company before the California Air Resources Board (CARB) stated:

...although we certified our entire 1996 model year Ford product line with only a few OBD-II monitoring deficiencies, we had to later limit the operation of the misfire monitor on most of our vehicles due to the – to an unusually high number of malfunction indicator lights coming on in the field. After which the misfire condition could not be repeated, and thus repaired when the vehicle was returned to the dealership. As a result, we had to use the deficiency provisions for the misfire monitor across most of our product line, and that's being used for both '96 and '97.<8>

Deficiencies across a full product line for both the 1996 and 1997 model years hardly constitute "minor teething problems." Rather, the auto companies documented their difficulties sufficiently to be successful in their campaign for regulatory relief from the State of California.

The government has argued that it attempted to gain a negotiated settlement between the auto and petroleum industries before introducing this legislation in May 1995. However, by promising to ban MMT should the talks prove unfruitful, former Environment Minister Sheila Copps prejudiced the negotiations from the outset – the auto industry had no incentive to reach a reasonable settlement on the issue nor accept an independent expert panel review.

This legislation raises the possibility of lost jobs for Canadians. The Government knew that Bill C-29 would have the effect of causing a loss of substantial sales revenue to Ethyl Canada and its Corunna, Ontario plant. A memorandum entitled "Business impact of loss of MMT use," dated February 24th, 1995, from David Head, Industry Canada to Frank Vena, Environment Canada concludes:

"The sale of MMT represents some 50% of Ethyl Canada's total sales revenue. Loss of this business would result in a loss of a few tens of millions of dollars per year. The Corunna plant employs approximately 40 people. [...] The loss of 50% of sales revenue is a major loss and could cause the parent company to reevaluate maintaining a Canadian operation."

Justification for a loss of jobs is necessary. Bill C-29 raises numerous complex issues which require a high level of technical expertise to fully comprehend.

Conclusion

Taking into consideration the entire body of evidence presented to the Committee, it is possible to conclude that MMT does not harm the functioning of OBD systems. It is not possible to conclude the opposite. Both the U.S. EPA and the U.S. Courts have thoroughly considered the evidence presented by both Ethyl Corporation and the car companies. Both independently rejected the claims of the auto manufacturers in supporting the conclusion that MMT "does not cause or contribute" to the failure of OBD systems. We also agree that, based on the evidence presented during our hearings, that the auto makers and the government have "not come close" to proving otherwise. The small amount of warranty data they did provide was not subjected to any independent third party review.

The auto companies are experiencing significant problems with their OBD systems but no scientific proof has been provided to the Committee that these difficulties are caused by MMT.

The question of whether MMT causes or contributes to the failure of automobiles' OBD systems is key to the principle of this Bill. Based on a thorough examination of the testimony and evidence before the Committee we conclude the following:

1.The auto makers are experiencing significant problems with the functioning of their OBD systems;

2.The evidence strongly suggests that OBD malfunctions are unrelated to the use of MMT-based petroleum.

Recommendation

The issue of how best to reduce vehicle emissions is of utmost importance to Canadians. It is essential that environmental legislation be based on facts rather than speculation. Based on our conclusion that the evidence strongly suggests that MMT-based petroleum does not cause OBD systems to malfunction an independent, third party review of the evidence should be undertaken.

We recommend that the Royal Society of Canada undertake a thorough assessment of all information pertinent to Bill C-29 and report its findings back to the Committee at its earliest opportunity.

Does MMT in gas cause a health hazard to Canadians?

The stated rationale of the current Minister of the Environment, the Honourable Sergio Marchi, for Bill C-29 is: "We cannot take chances with people's health. We cannot take chances with the air that we breathe." Health Canada officials concurred with Bill C-29 but were unequivocal in regard to the matter of the alleged health impact of manganese emitted from vehicles as a result of the combustion of MMT. They have done four separate studies on MMT since 1978 and on each occasion Health Canada came to the same conclusion. Before the Committee, Mr. Daniel Krewski, Acting Director, Bureau of Chemical Hazards, Health Canada restated Health Canada's position:

"Many of you are aware that in December 1994, Health Canada completed a risk assessment on the health implications of the manganese combustion products of MMT. The main conclusion of this assessment was that the manganese emissions from MMT are unlikely to pose a risk to health for any sub-group of the population."

Evaluation of the Evidence

In a series of responses to questions asked by the Chair of the Committee on a document released by the Health Protection Branch, Health Canada, entitled, Issues: MMT - Gasoline Additive, the matter is made clear – MMT in gasoline is not a health hazard to Canadians.

The Chairman: In the document you ask some questions and give some answers. The first question you ask in this document is: `Is the manganese in MMT likely to cause the same health problems as lead did?' Your answer is:

`No. Although lead and manganese are both heavy metals, there are important differences between them. Manganese is a necessary nutrient, required by the body everyday for good health. On the other hand, there are no known beneficial effects of lead. Manganese is also a much more abundant element -- the 12th most common on earth.'

Is your answer today the same as it was in 1992?

Mr. Krewski: Yes. I think several of those points were included in my opening remarks, Mr. Chairman.

The Chairman: You then go on about MMT and Canadian health issues and you state:

`Based on current evidence, experts at Health and Welfare Canada are confident that the risk to human health from MMT-derived manganese is extremely small: there is clearly a wide margin of safety between the current intake of manganese from MMT and the lowest concentrations of airborne manganese known to cause any health effects.'

The Issues sheet states that `...it is only in industrial settings like certain mines and metal refineries that concentrations of manganese are great enough to cause toxic effects' and points out that `Industrial sources, such as iron and steel foundries' -- I take it that would be in the Hamilton and Windsor areas -- `are in fact, responsible for about 90% of airborne manganese.' Is that still your position today?

Mr. Krewski: Those facts are still valid, yes.

The Chairman: You then go on to state:

`This danger simply does not exist in the case of manganese: there has always been far more manganese than lead in the soil -- more than could possibly be deposited through the use of MMT -- and yet children have not experienced any ill effects from it.'

Is that still your position today?

Mr. Krewski: Yes, it is.

The Chairman: The question is: 'Can manganese be toxic?` Your answer is:

`Yes, like many useful substances, manganese can be toxic if absorbed in large enough amounts. But it is only in industrial settings like mines and metal refineries that concentrations of manganese are great enough to cause toxic effects.'

Is that still your evidence today?

Mr. Krewski: Yes.

The Chairman: The next question is: `Is manganese more toxic when inhaled rather than ingested?' Your answer is: `No.' Is that still your answer today?

Ms. Grace Wood, Evaluator, Air and Waste Section, Monitoring and Criteria Division, Bureau of Chemical Hazards, Health Canada: I would change the answer to `yes'.

The Chairman: Would you explain that, please?

Ms. Wood: Manganese when inhaled is much more absorbed than manganese when ingested. Ingested manganese results in about 3% absorption average, and with inhaled manganese we count up to 60%.

The Chairman: Thank you. The next question was: `Why is MMT not used in the United States?' You have a description, and towards the end you indicate:

The EPA does agree, though, that MMT significantly reduces nitrous oxide emissions, which are known to cause smog. Interestingly enough, the levels of manganese in Canadian and American cities are about the same -- 0.03 or 0.04 micrograms per cubic mere -- despite the difference in MMT use between Canada and the U.S.'

Are you still of that view today?

Ms. Wood: Yes.

Mr. Chairman: From your department's point of view, even with MMT being used in Canada and not being used in the United States, the levels of manganese in the cities of the United States and Canada are relatively the same and are within areas which are not harmful to Americans or Canadians; is that a fair comment?

Mr. Krewski: I think that is a fair summary.

Of serious import, Health Canada has noted that there are significant man-made sources of manganese being emitted into the atmosphere from steel-producing industries. Mr. Krewski stated that:

"Hamilton and Sault Ste. Marie ... do have elevated levels of manganese. Our data suggests that perhaps half the population might be above the reference level of 0.1 micrograms per cubic mere... However, that is not due to manganese from vehicle emissions but due to manganese derived from industrial activity such as steel mills."

The Committee was led to believe that this obvious environmental problem and health concern is not receiving governmental attention. When asked about what the government is doing to control the steel-emission problem, Mr. Krewski said: "I believe the industry is doing everything it can to control emissions, but I do not think there is any regulatory action being taken." To Senator Ghitter's question:

"Has Health Canada issued any warnings about Hamilton in that respect? Have any of these 'Issue' documents gone out about Hamilton?"

Mr. Krewski replied: "I do not think so." It appears that a verifiable health issue and environmental concern of major proportion is being disregarded by both Environment Canada and Health Canada. This represents a failure of the federal government to provide legislation in the public interest.

In addition to Health Canada, the Committee sought the advice of Professor Joseph Zayed from the Department of Occupational Medicine and Environmental Health, who has done extensive research in the Montreal area on the exposure of high risk individuals and the general public to MMT combustion. His research showed that atmospheric concentrations of manganese in Montreal are safe and that the high atmospheric conditions of manganese observed until 1990 was attributable to certain industrial activities unrelated to MMT use.

The concern about manganese levels emanating from industrial sources was also noted by Mr. Frank Vena from Environment Canada who appeared before the Committee twice. In a memorandum to the Minister of the Environment dated October 24th, 1994 and entitled "Removal of MMT from Canadian Gasoline" he noted that:

"With respect to health impacts of manganese, there are areas in Canada for example, near steel making facilities in Hamilton and Sault Ste. Marie, where airborne manganese levels sometimes exceed the concentrations that Health Canada would consider safe. These elevated levels of manganese are not caused by MMT in gasoline...".

MMT was considered synonymous with lead by several proponents of the Bill, including Minister Marchi and Elizabeth May of the Sierra Club of Canada. Representatives of Pollution Probe and the Learning Disabilities Association of Canada also expressed uncertainty and fear about the possible effects of long-term, low-level exposure to manganese on Canadian children. However, Health Canada officials maintained, based on scientific evidence, that although lead and manganese are both heavy metals, there are important differences between them. Manganese is a necessary nutrient, required by the body for good health. On the other hand, as stated by Mr. Krewski, there are no known beneficial effects of lead. He said: "[L]ead was added to gasoline in amounts about 16 times higher than the amount of manganese additive, leading to higher airborne lead and higher ground deposition."

Conclusion

There appear, at this point, to be sufficient data to conclude that MMT in gasoline does not pose a public health problem. Based on the scientific based testimony of Health Canada we accept that MMT use in Canada poses no danger to Canadians.

* * *

Does MMT in gas cause direct damage to the environment?

Committee members were asked to assume that MMT is the cause of OBD malfunction -- despite the decision rendered by the U.S. EPA. Concerns were raised that without functioning OBD systems harmful hydrocarbons and carbon monoxide would be released into the Canadian environment in increasing amounts. The other side of the question is that removal of MMT from gasoline would lead to increased NOx emissions.

Evaluation of the Evidence

In their appearance before the Committee, Ethyl Corporation officials took the position that, rather than increasing harmful emissions, the use of MMT actually reduced NOx emissions significantly. They put before the Committee their research that appears to indicate that MMT lowers average NOx emissions by between 15% to 20% compared to vehicles not using MMT.

This particular matter was of great concern to the Province of Nova Scotia. Both the Premier of Nova Scotia and the Minister of the Environment for Nova Scotia expressed concern in their correspondence with the federal government about the trans-boundary ground level ozone problem that afflicts that province's environment. Peter Underwood, Deputy Minister, Department of the Environment, Government of Nova Scotia stated:

"...the elimination of MMT will cause an increase in NOx emissions at somewhere between 8% and 20%. The other thing we do know is that the NOx that impacts on Nova Scotia does not come from Nova Scotia."

The officials from Nova Scotia also said to the Committee that they supported the precautionary principle, although they believed that if the federal government was properly invoking that principle they would ensure that MMT remained in the gasoline -- as it is known to decrease NOx emissions. The principle as accepted in the Canada-Wide Accord on Environmental Harmonization approved by the Canadian Council of Ministers of the Environment on November 20th, 1996 states:

Governments agree that their environmental management activities will reflect the following:

[W]here there are threats of serious or irreversible environmental damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation (precautionary principle).

On this matter and how it relates to the environmental concerns of Nova Scotians, Mr. Underwood said:

"...While there is some debate over the level of NOx reduction achieved, there is no debate over MMT's ability to realize a higher level of NOx reduction than offered by any other replacement additives. This not only poses an increase to Nova Scotians, but it also contradicts the federal environment department's own position on the necessity to control NOx emissions set out under the 1990 CCME management plan for nitrogen oxides and volatile organic compounds."

In similar fashion, Mr. John Donner, Executive Director, Environmental Affairs, Department of Energy, Government of Alberta suggested that MMT is a help, not a hindrance, to a better Canadian environment. He, too, suggested that proponents of the bill have misused the concept of the precautionary principle as it relates to environmental matters and cautioned : "Let us not make real environmental problems worse while pursuing phantoms." He continued:

"The precautionary principle is that scientific uncertainty should not be used as an excuse to avoid action in order to avoid a potentially serious and irreversible environmental outcome. In this case, we are talking about detectors, not about the environment directly."

Frank Vena of Environment Canada agreed that there is a NOx benefit in using MMT, but suggested that the level of benefit was lower than that suggested by either Ethyl, CPPI or the U.S. EPA. It is unclear which scientific report Environment Canada has conducted to support Mr. Vena's suggestion that the NOx benefit is 5%. The approximate NOx reduction benefit we accept is based on data produced by Mr. John W. Holley, Chief, Data Management and Analysis Section of the U.S. EPA and cited by representatives of Ethyl Canada. Mr. Holley noted that:

"The test data for NOx show a more substantial and more consistent decrease for this pollutant than was the case for CO. The average across models was 0.08gpm or 8% of the standard. The largest decreases were seen in the 1992 Ford Mustang 5.0L model and the 1988 Ford Crown Victoria 5L (each showing a 0.30 gpm decrease or 30% of the standard). Other models with substantial decreases were the 1988 Ford Taurus (0.22 gpm or 22% of the standard) and the 1992 Buick Regal 3.8L (0.19 gpm or 19% of the standard)."

Environment Canada also noted that this benefit from MMT had to be weighed against the benefits expected to be gained from a properly functioning OBD system. The Committee was told by Mr. Vena that:

"...if there is a NOx benefit and you are in a policy decision then the question which must be asked is 'Are there trade-offs here?' The rationale here is one that is protecting pollution control equipment and ensuring that it works well. Obviously, if it does, then that benefit must be greater than this potential increase."

The issue of hydrocarbon and carbon monoxide increases was of concern to the U.S. EPA, over the course of the four MMT waiver applications made by Ethyl Corporation, as well. The U.S. Federal Register of December 9th, 1993, p.64764 was cited by Ethyl Corp. officials when confronted with this key issue. The EPA noted succinctly that: "EPA has determined that the increases in hydrocarbon emissions observed in the entire fleet of 1992 and 1993 vehicles tested by Ethyl ...are not statistically significant."

It seems possible that the removal of MMT from Canadian fuel will cause an immediate increase in vehicle NOx emissions. It concerns us that even if the OBD systems were to work properly the continuing environmental benefit gained through use of MMT and its associated reduction of NOx emissions would be lost.

Conclusion

The technical data reviewed by the EPA might lead the members of the Committee to conclude that MMT does not increase hydrocarbons and carbon monoxide. However, until a definitive study is conducted, the question cannot be answered with certainty. Given the preponderance of the evidence on this matter, and at this stage in our examination, it is not apparent that MMT causes direct damage to the environment. It remains that the evidence relating to a negative impact of MMT use on emissions of hydrocarbons, and carbon monoxide, and consequently on the Canadian environment, is contradictory, inconclusive and speculative.

* * *

<1> United States Federal Register, Volume 58, No. 235, December 19, 1993, p. 64761,

<2> Ethyl Corp. v. Browner, 51 F.3d 1053, 1065 (DC Cir. 1995) emphasis added.

<3> Id. At 1064-1065.

<4> Id. At 1065.

<5> Letter to the EPA from Ford (EPA Air Docket A-93-26, No. II-D-91).

<6> Automobile Company Alleges MMT Adversely Affects On-Board Diagnostic System Operation are Based on Flawed Testing, Ethyl Corporation, (May 1996).

<7> US Federal Register, 15244, March 23, 1995.

<8> CARB Transcript, December 12, 1996, p.157-158.


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