Scrap fever: Unocal's effort to get jalopies off Southern California roads catches fire; widespread support show for smog-reducing program.

Scrap fever: Unocal's effort to get jalopies off Southern California roads catches fire

Widespread support shown for smog-reducing program

Unocal Corp.'s decision last spring to convert smog-belching junkers into scrap metal has attracted more than just the eye of skeptical environmentalists and envious public relations executives.

Since the Los Angeles-based oil company began the $5 million program in April, the owners of roughly 5,000 pre-1971 cars have exchange their vehicles for $700 each. The brisk public response, combined with new sources of funds, has prompted Unocal to revise the total number of cars it will scrap from 7,000 to 8,400.

Pre-1971 autos emit up to 30 times as much pollutants as new cars do.

Even the South Coast Air Quality Management District, which has tightened the regulatory screws on the petroleum industry during recent years, pledged $100,000 to Unocal's pilot project Aug. 3.

"Having regulatory agencies join private enterprise to do something immediate about air pollution is a hell of a deal," said Roger Beach, Unocal's president of refining and marketing. He said public reaction to the program has exceeded company expectations.

"We've tried to demonstrate to people and other companies that there are innovative ways to clean up the air ourselves. We've even had people sending in $700 checks saying, `Scrap one for me.'"

Unocal is riding its own environmental bandwagon, even though it still has not come out with a reformulated gasoline like Arco's EC-1. In June, the company announced it was sending a fleet of six tow trucks to assist drivers with car problems on Southland freeways every day. To date, the tow trucks, equipped with spare gas, air, water, have made 400 to 500 "assists" a week as part of the Unocal's "76 Protech Patrol."

The impetus for the patrol was twofold, Unocal officials say. Studies by Caltrans have shown that 70 to 80 percent of freeway tie-ups are caused by disabled vehicles and that idling cars emit more pollution than moving vehicles. Also, the tow trucks, which cost roughly $17,000 each, are hoped to generate potential new Unocal customers.

Unocal last month also began offering free smog checks to pre-1975 cars at 120 Protech stations. If the driver, eligible for smog checks in years not required by the Department of Motor Vehicles, fails the test, he or she is given a free low-emission adjustment. Unocal picks up 70 percent of the test and adjustment cost, averaging $55, with the Unocal dealers paying the rest. Company officials say they have already received 4,000 calls about the smog fighter program.

But it is Unocal's scrap-for-cash deal that has gotten the most notoriety and private sector support.

Last May, the California Community Foundation, a San Francisco-based non-profit group, announced it would donate $70,000 to Unocal's scrap program if the oil company matched that amount. Unocal did, enabling the removal of 200 additional cars.

Also jumping on board was the Ford Motor Co., which said last month it would give $700,000 to the program -- enough to scrap 1,000 cars. Ford's Southern California dealers followed suit, agreeing to donate an additional $63,000 to Unocal.

First Interstate Bank sweetened the pot. The Los Angeles-based bank began offering reduced downpayments and interest rates for auto loans, provided the borrower join Unocal's scrap program and agree to buy cars made after 1981.

Unocal, which takes the used cars to scrap yards owned by Hugo Nu Proler in Vernon and at Terminal Island, says as much as 6 million to 8 million tons of smog-forming hydrocarbons will be removed as a result of SCRAP -- South Coast Recycled Auto Program. Hugo Nu Proler pays Unocal less than $50 for each car, which is then junked and recycled to metal markets in Europe and Asia.

Obviously, the SCRAP program won't had much effect on the $11.4 billion (1989 revenues) company's profits. The company earned $165 million on revenues during the second quarter of 1990.

"SCRAP isn't doing much for the bottom line in the short term," Beach added. "Hopefully we are buying a perception by the public we care about the environment. In the long pull, it can't do anything but help. The feedback has been amazing."

One oil company analyst said Unocal's program, like Atantic Richfield's decision to introduce a smog-cutting leaded gasoline last August, shows how critical the environmental factor has become for oil companies, more than one year after the Exxon Valdez spill.

"The goodwill Unocal has engendered by its public lesson in environmental civics have burnished the impression that it is a very good corporate citizen," said Bernard J. Picchi, managing director of Salomon Bros. in New York. "That can only help the company in the long run, because firms that conduct their operations without being mindful of the environment are asking their shareholders to take a blind gamble."

Both Picchi and Beach say Unocal's efforts are also a gentle reminder that private sector approaches to air pollution can be as effective as more government measures.