You don’t have to drive an automobile to know that Chicago has the highest gas prices in the nation. President Bush thinks he has a solution for that, but it may leave us with the same sort of smog that hangs over Houston.

In March Bush ordered the Environmental Protection Agency to loosen emissions standards for gasoline that’s blended with ethanol. According to federal regulations, gasoline sold in areas with air pollution problems must contain an oxygenate, which makes the gas burn more cleanly. The two big oxygenates are a synthetic called MTBE (methyl tertiary butyl ether) and ethanol, the corn-based additive. As you might guess, ethanol is extremely popular in the farm belt: Chicago bans the sale of gasoline using MTBE, and Illinois refineries get big tax breaks for using ethanol.

But there’s a catch: gasoline that’s treated with ethanol evaporates more quickly than gas treated with MTBE, and therefore it releases into the atmosphere more volatile organic compounds (VOCs), which in turn produce ozone–one of the main components of smog. The problem is compounded during the summer, when high temperatures accelerate the evaporation rate. To slow it down and keep the ozone in check, refineries have to produce a special blend of “summer gas” that further reduces VOC emissions. The cost of these ethanol blends and the fact that they’re produced only at a few midwestern refineries are two factors that have given us such high prices at the pump. Bush’s looser emissions standards apply only to summer gas.

“If we get a really hot summer, you’re going to see more smog,” says Brian Urbaszewski, director of environmental health programs for the American Lung Association of Metropolitan Chicago. In a study released last week the lung association gave Cook County an “F” for air quality, specifically because of its high ozone levels. That makes the new emissions standard especially bad news for people with asthma or emphysema.

The EPA has justified the new standard by pointing out that ethanol reduces the amount of carbon monoxide emitted by gasoline. “Both pollutants play a role in ozone formation,” the agency says in a press release. “While there will be an increase in VOCs they will be offset by the concurrent CO reductions. Air quality will not be compromised by this change. The region will receive credit toward their carbon monoxide reductions associated with ethanol reformulated gasoline.”

But one prominent lobbyist for the oil industry is leery about trading one form of pollution for another. David Sykuta, executive director of the Illinois Petroleum Council, says that evaporation–not carbon monoxide–is the area’s leading cause of air pollution. “Chicago isn’t out of compliance for carbon monoxide,” he argues. According to Sykuta, refineries now have the technology to make clean-burning gasoline without using an oxygenate, which would reduce both prices and air pollution. But that would require a revision of the Clean Air Act and be vigorously opposed by politicians who want to protect the farming industry. “My hope is that ethanol will be an increasing part of our future,” says congressman Mark Kirk of Wilmette. The Republican legislator was standing behind EPA director Christine Todd Whitman when she announced the new policy.

Sykuta calls the EPA’s patchwork attempt to reduce local gasoline prices “an environmental step back…. We’re not in favor of environmental givebacks.” But ExxonMobil feels differently: the petroleum giant is already taking advantage of the looser standard at its Joliet refinery. According to spokesman Patrick McGinn, the refinery is now producing “several thousand more barrels a day,” a boost in production that “should increase supply, which will affect price.”

BP Amoco, which owns a refinery in Whiting, Indiana, will continue to produce the same blend it made last summer. “We don’t plan to use the waiver,” said company spokesman Tom Mueller. “We’re going to stick with the old standard. We as a corporation are committed to making cleaner fuels.” But later he qualified his statement: “In an emergency situation, we would certainly consider using that waiver.”

Everyone seems to agree that the savings to drivers will be minor at best. “I know it will make the air quality worse,” says Urbaszewski. “As far as prices going down, I don’t know about that one. Do we want to pay a penny less a gallon and have 20 more people wind up in the hospital? That’s not a good trade-off.”