California Gas May Get Even Cleaner

CALIFORNIA, the nation's laboratory for pollution control, is considering far-reaching new regulations on gasoline to help clean up America's dirtiest skies.The state that already controls everything from underarm deodorants to lawn mower emissions will decide this week whether to mandate changes in the formulation of gasoline that would result in the cleanest such fuels on earth. The rules could add 10 to 15 cents a gallon to prices at the pump. Environmentalists laud the proposed move, but oil companies, although not entirely opposed, worry about the costs of meeting the strictures. "Our view is it would be extremely expensive," says William Dickinson, vice president of engineering and technology for ARCO Products Company. "But we are under a mandate to clean up the air in California." The proposed changes by the California Air Resources Board, which will be discussed at hearings here today and Friday, underscore the state's leading role in pushing environmental regulation in new - and often controversial - directions. It is a role born of necessity. Despite some improvements in smog levels, the vast majority of the state's residents live in areas that violate federal and state air-quality standards. The four-county Los Angeles area, harboring the nation's foulest skies, isn't expected to meet federal clean-air rules for a couple of decades, if then, despite having the world's most ambitious anti-pollution program. The latest rules also highlight the growing emphasis on changing the content of gasoline to help fight smog, rather than just the vehicles themselves. Although other power sources, notably electricity and methanol, will be important elements of future smog-busting programs, gasoline will still be the dominant fuel for years to come. Thus, environmentalists and regulators want to make it as clean as possible. The federal Clean Air Act includes specifications for gasoline, but the new Air Resources Board ( ARB) rules would go well beyond these. "The standards that get pioneered here tend to get Xeroxed around the country," says Tim Little, executive director of the Coalition for Clean Air. "Chances are the reformulated gasoline standards are something everybody is going to look at." The ARB's proposed rules, the second phase of a state reformulation program, seek to make gasoline 30 to 40 percent cleaner than today's blends by 1996. This would be done by reducing hydrocarbons and nitrogen oxides in gasoline that contribute to smog, as well as toxic elements such as benzene. Car exhaust accounts for about 50 percent of California's air pollution. "These rules would give California the cleanest gasoline in the world," says Bill Sessa of the ARB. "This has as much clean-air potential as three of our other biggest programs combined." The oil industry isn't against reformulating gasoline, but it questions the stringency and some of the specific rules. The ARB estimates that oil companies will have to spend $2 billion to $5 billion to retool refineries. The agency predicts gasoline prices will jump 8 to 12 cents a gallon as a result. The Western States Petroleum Association (WSPA), an industry group, puts the capital costs at $6 billion to $10 billion; it believes pump prices could jump more than 20 cents a gallon. WSPA claims that the rules will cost California 80,000 jobs by the year 2000 - figures environmentalists and state regulators vehemently refute. "It means four years worth of large capital investment at a time when the California economy is not strong," says Gina Nelhams, a WSPA fuels specialist. With some modifications, she says, "80 percent of the emission reductions could be met at half the cost." ARCO's Dickinson says his company will push for minor changes. The company's EC-X blend, scheduled for release in late 1995, is expected to meet the specifications, though it will cost up to $1 billion to bring it to market. At a time when jobs have become a dominant issue in California, and air-quality regulators have come under fire for contributing to a "sour" business climate, this week's hearings will be an important political test.