What's going on here? Tree huggers and their mortal enemies in the oil business are suddenly working together. Both the Sierra Club and the American Petroleum Institute oppose an effort by corn growers and distillers to change clean-air standards to allow greater use of grain alcohol as a motor fuel. Environmental groups believe increased use of alcohol in fuel will boost emissions of volatile organic compounds, which contribute to smog. And oil companies, which have invested heavily in reformulated gasolines to meet clean-air requirements, don't want to lose business to gasohol.

At issue is a draft Environmental Protection Agency regulation that disqualifies most gasoline/ethanol mixtures from being new "clean" fuels required by the 1990 clean air law. Grain growers and processors, especially Archer Daniels Midland Co., are pushing hard for a waiver. They've managed to gain considerable backing on Capitol Hill, especially in the Senate, which the oil-environmentalist alliance is now trying to counter. But, lobbyists say, the linkup is purely a marriage of convenience. Declares American Petroleum Institute President Charles J. DiBona: "We're not suddenly taking up arms with a group we haven't traditionally been close to."

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