NEW YORK (CNNMoney.com) - A shortage of ethanol could drive gasoline prices up this summer, according to congressional testimony.

Guy Caruso, the administrator of the U.S. Energy Information Administration, told a Senate committee Wednesday that switching to ethanol this summer as the gas additive to comply with environmental regulations could cause shortages and higher prices for many drivers.

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The problem is due to the switch this year to ethanol by most oil companies away from an additive known as MTBE that had been used in the past to meet environmental standards that go into effect every summer. But MTBE itself causes ground water pollution and last year Congress voted to eliminate its use over four years. But the oil industry, due to concerns about liability, is moving to drop MTBE immediately. Caruso said that rapid change could translate into higher pump prices starting later this spring.

"The rapid switch from MTBE to ethanol could have several impacts on the market that serve to increase the potential for supply dislocations and subsequent price volatility on a local basis," Caruso said in his prepared testimony to the Senate Environment and Public Works Committee.

"Both capacity and transportation issues imply a very tight ethanol market for at least the first part of the year," he added. He said about 130,000 additional gallons of ethanol a day are needed to meet the increased demand.

"Although planned ethanol capacity could fill the additional...requirement, these new facilities will not start soon enough to meet 2006 demand needs as companies are making changes during the first quarter 2006," he said in his prepared testimony.

But Bob Dinneen, president of the Renewable Fuels Association, said any shortages this year are merely a short-term issue that can be dealt with through increased imports.

"There is no question that the dramatically accelerated removal of MTBE has challenged the marketplace," said Dinneen in his testimony. "But the ethanol and petroleum industries have done this successfully before in New York, California and Connecticut. We know we can do it again."

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