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ARCO OPPOSES PROPOSED VARIANCES TO STATE'S CLEAN DIESEL REQUIREMENTS

 SACRAMENTO, Calif., July 27 /PRNewswire/ -- ARCO told the California Air Resources Board (CARB) today that it strongly opposes the granting of variances to three California refiners who say they cannot meet CARB's Oct. 1 deadline for providing cleaner-burning diesel fuel throughout the state.
 The CARB requirements, which were established in November 1988, call for major reductions in diesel fuel's sulfur and aromatic hydrocarbons content to eliminate the formation of soot-like particles and reduce emissions of nitrogen oxides, precursors of urban smog. New federal EPA diesel requirements also take effect Oct. 1, but state standards are tougher.
 Chevron, Unocal and Ultramar, which together represent 50 percent to 80 percent of the state's total diesel supply, have applied for variances to extend the deadline, even though they might be required to pay a special fee for every gallon of non-complying diesel sold after Oct. 1.
 ARCO, which last week had two new cleaner-burning diesel formulas certified by CARB, has already completed a two-year, $70 million modification at its Los Angeles Refinery. This will enable ARCO to produce approximately 15,000 to 20,000 barrels per day of complying diesel by Oct. 1.
 In a letter to CARB made public at a hearing in Sacramento today, David A. Smith, manager of Environmental, Health and Safety Issues for ARCO Products Co., said ARCO has shown it was possible to meet CARB requirements in a timely fashion. He also cited four reasons for opposing the variance proposals:
 1) The variances will not require applicants to minimize the environmental impact of their non-complying diesel. None of the applicants is offering to take a single step to close the gap between their EPA fuel specifications on Oct. 1 and those required by CARB. That gap, if approved, will result in more than 5,000 tons of extra emissions during the last three months of this year. And, by paying a fee, the applicants end up creating a "surcharge" of at least $15 million that is likely to be passed on to consumers, who will then pay extra at the pump for no environmental improvement.
 2) CARB's executive office does not have the authority to exempt 50 percent to 80 percent of the state's motor vehicle diesel fuel supply from CARB's rules. ARCO believes it was the original intent of the CARB board to use the variance provisions to address only those isolated situations where companies were unable to comply with the law because of equipment failures or other events beyond their control. No elected official or board policy vote has endorsed this radical change in the use of the variance provisions.
 3) Governmental actions should not set or manipulate the marketplace price of any product. Because the variances would cover 50 percent to 80 percent of the total diesel supply in California, CARB's proposed fees would directly interfere with the free market by fixing the spread between the prices of federal EPA diesel and state CARB diesel.
 4) The applicants have not explained why they are in a differential position from companies who will comply on time. Until they clarify this, ARCO contends that they do not qualify for a variance.
 -0- 7/27/93
 /CONTACT: Annie Reutinger of ARCO public affairs, 213-486-3181


CO: ARCO ST: California IN: OIL SU:

LM-MF -- LA011 -- 6257 07/27/93 13:03 EDT
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Publication:PR Newswire
Date:Jul 27, 1993
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