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TEXACO CAUTIONS NORTHEAST REGULATORS NOT TO RUSH INTO ADOPTING CALIFORNIA'S COSTLY, INEFFECTIVE FUEL MANDATES

 TEXACO CAUTIONS NORTHEAST REGULATORS NOT TO RUSH INTO ADOPTING
 CALIFORNIA'S COSTLY, INEFFECTIVE FUEL MANDATES
 WHITE PLAINS, N.Y., Nov. 26 /PRNewswire/ -- Texaco Inc. (NYSE: TX) President and Chief Executive Officer James W. Kinnear said today that the company is concerned with the California Air Resources Board's (CARB's) decision to mandate severely reformulated gasoline sold in that state for 1996 and beyond, despite the availability of data showing alternative, much more cost-effective methods to remove pollutants from the air.
 "The new California fuel mandates will place an enormous burden on the residents and taxpayers of that state, in terms of costs, jobs and general economic degradation," asserted Kinnear. "Now, taxpayers are in danger of having billions more of our dollars wasted by new government mandates that are based on politics, not on science or on economics. These are mandates that take a meat axe to problems requiring a scalpel.
 "This new California fuel will cost some 20 cents a gallon more, and will provide little benefit beyond the federally mandated formulation for gasoline in nine non-attainment areas -- including Los Angeles -- in 1995. California regulators would have you believe that the new fuel will reduce smog by some 30 to 40 percent. This is simply not true. What has not been made clear to the public is that this claimed reduction includes changes largely already mandated by the federal government for 1995. In effect, then, the new California fuels would only reduce smog by one to two percent, but at a cost a hundred times greater than alternative reduction strategies.
 "The issue is not whether we want cleaner air," Kinnear stated. "We want cleaner air -- as does the American public. The issue is how we get cleaner air."
 The Texaco CEO cautioned other states not to rush prematurely into adopting the inefficient, costly California fuels, which could remove pollutants at an incremental cost of as much as $500,000 per ton.
 "Regulators in several Northeast and mid-Atlantic states are already considering that strategy, before examining more cost-effective alternatives; and, without carefully looking at the loss of jobs and economic loss such adoption would bring." Kinnear noted that thus far, only Connecticut has declined to move toward adopting the California standards, based on the need for more economic and scientific data.
 "If California standards -- including Low-Emission Vehicles (LEVs) and the severely reformulated gasoline recipe (Phase 2 fuel) -- are adopted in the Northeastern region, we could see the loss of between 146,000 and 298,000 jobs in the year 2000, according to the economic consulting firm DRI/McGraw-Hill of Lexington, Mass. Putting the best- and-worst-case job-loss scenarios into perspective, they are respectively equivalent of the entire population of Hartford, Conn., being out of a job, or nearly all of Newark, N.J., standing on the unemployment line," related Kinnear. New York alone could lose as many as 66,000 jobs by the year 2000.
 The DRI/McGraw-Hill study also highlights falling employment and corresponding wage and salary loss throughout the region -- which includes the states of New York, Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, and Maryland. The resulting annual losses in wages and salaries for the region would be about $9.3 billion to $17.8 billion with the adoption of the California LEV program and the widespread use of severely reformulated gasoline by the year 2000. State and local tax receipts could fall as much as $2.1 billion in the year 2000, beyond reductions associated with federal fuel mandates. New York state, alone, would lose up to $700 million in additional tax revenues in the year 2000, almost as much as the current state deficit.
 "What is most troubling is that the depressed economy of the Northeast can ill-afford a further loss of jobs and tax revenues from a program that provides essentially no clean-air benefits, and hits hardest on those with fixed incomes."
 Kinnear offered other options which could cost far less per ton of pollutants removed when compared to the severely reformulated components of CARB's Phase 2 fuel, including:
 -- Enhanced inspection and maintenance programs -- at a cost of some $3,000-$8,000 per ton of hydrocarbon removal. The EPA is slated to issue a Rule Making on guidance for enhanced "I&M" programs for states shortly.
 -- Scrappage of older cars -- A recent study by the consulting firm DRI/McGraw-Hill concluded that removing the millions of vehicles dating prior to 1978 from the nation's roadways would provide one of the cheapest and fastest ways to cut pollution and oil imports, at a cost of less than $2,000 per ton, thus providing both an environmental gain and a conservation benefit to the consumer.
 -- 1995 federal formula fuel -- the federally mandated 1995 fuel, unlike CARB's Phase 2, has been shown to be reasonably cost effective.
 "As a nation, our aim should be to get the most benefits for the cost and to do it by finding the best balance among energy, economics, and the environment. That means taking the time to do the research and gather the facts to make decisions and intelligent trade-offs, based on science and economics," Kinnear said.
 -0- 11/26/91
 /CONTACT: David J. Dickson, 914-253-4128, or Anita Larsen, 914-253-4155, both of Texaco/
 (TX) CO: Texaco Inc. ST: New York IN: OIL SU:


CK -- NY029 -- 7210 11/26/91 10:31 EST
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Date:Nov 26, 1991
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