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CALIFORNIA ENERGY COMMISSION REJECTS AUTO/OIL INDUSTRY STUDY CLAIMS

CALIFORNIA ENERGY COMMISSION REJECTS AUTO/OIL INDUSTRY STUDY CLAIMS
 SACRAMENTO, Feb. 14 /PRNewswire/ -- Energy Commission Chairman Charles Imbrecht today rejected the claims made in the auto/oil media conferences in Washington and Sacramento that reformulated gasoline was more economic and as clean as methanol (M85).
 Imbrecht said: "While it is important that the automobile and oil industries work together to provide the public with clean fuels and vehicles, it is equally important that they provide useful, unbiased information. Clean, alternative fuels address two very important public policy goals: clean air and energy diversity. Reformulated gasoline can contribute to cleaner air quality but does virtually nothing to reduce our energy dependence on petroleum."
 Imbrecht identified four major concerns with the presentation on the results of the Auto/Oil Study:
 1. The economic analysis is by far the most subjective and least credible portion of the entire report for the following reasons:
 -- First, the Hahn study factors in a $400 differential cost
 for the fuel flexible vehicle (FFV) technology. Chrysler
 has already announced that their 1993 model FFVs will be
 available off the show room floor in September 1992 with
 no additional cost to the consumer. Despite the obvious
 competitive impact this will place on the rest of the
 industry, the study ignores numerous public statements
 from the auto industry that the differential cost would
 not exceed $300 and would most likely be $100 or less.
 -- Second, the Hahn study assumes a natural gas feedstock price
 for methanol production of $2.70 to $2.80 per million Btu
 (1992 dollars). Regardless of the fact that the current and
 projected price for natural gas per is $1.20 or less per
 million Btu.
 -- Third, the cost comparison in Hahn's analysis was between
 M85 and gasoline available today. This is a wholly
 inappropriate comparison since today's gasoline will not
 be sold in California after 1996. The more ethical cost
 comparison is between M85 and reformulated gasoline.
 Hahn's study suggests that mass produced M85 will cost
 12 cents more than a gallon of today's gasoline.
 The Western States Petroleum Association testified before
 the Air Resources Board that Phase II reformulated
 gasoline, (recently mandated by the Board for 1996),
 would cost 30 cents more per gallon than today's
 gasoline. The Board itself estimated 12-17 cents per
 gallon over today's gasoline. Therefore, despite today's
 rhetoric, the Hahn study demonstrates that M85 will
 either be at price parity or up to 18 cents per gallon
 cheaper than gasoline, if we are to believe the oil
 industry.
 2. The entire study is really a comparison of apples and oranges. In other words, it is a comparison of advanced reformulated gasoline and conventional M85, (with 15 percent dirty industry standard gasoline). Imbrecht said, "The only fair evaluation should use the best reformulated gasoline as the 15 percent component of M85 versus reformulated gasoline." Imbrecht called upon the oil industry to develop a reformulated M85 for their future studies.
 3. The FFVs promoted through the Drive Clean California Campaign have the most recent FFV technology advancements which far exceed the earlier prototypes used in the Auto/Oil study. Analysis of the current 1992 and 1993 model year data indicates that these cars (which are manufactured by General Motors, Ford, and Chrysler) will meet the Air Resources Board's Transitional Low Emission Vehicle levels for 1994. The technology used in today's FFV's is two to three times cleaner than the FFV's used in the Auto/Oil Study, which used first generation FFV technology.
 4. While the study found that toxic emissions from the 1989 gasoline fleet to be about the same as that of the M85 FFVs, the study failed to weigh the emissions of benzene, butadiene, formaldehyde, and acetaldehyde for their cancer causing potential. If they had done this, the study would have concluded that M85 fuel in these FFVs reduced cancer risk associated with the gasoline fleet toxics by over 50 percent. Unlike gasoline and benzene, methanol is not a cancer causing agent.
 Moreover, the new FFV transitional low emission vehicles will meet the 1993 Air Resources Board 15 milligram per mile formaldehyde emission standard which is the same as the current gasoline formaldehyde emissions.
 -0- 2/14/92
 /CONTACT: Claudia Barker of California Energy Commission, 916-654-4989/ CO: California Energy Commission ST: California IN: OIL SU:


RF -- SF015 -- 0458 02/14/92 21:31 EST
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Date:Feb 14, 1992
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