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CHEVRON SUSPENDS METHANOL PROGRAM DUE TO LOW DEMAND, RENEWED AIR QUALITY CONCERNS AND THE PROMISE OF OTHER FUELS

 CHEVRON SUSPENDS METHANOL PROGRAM DUE TO LOW DEMAND,
 RENEWED AIR QUALITY CONCERNS AND THE PROMISE OF OTHER FUELS
 SAN FRANCISCO, April 1 /PRNewswire/ -- Chevron announced today that it is suspending its program for building more methanol pumps at service stations in California because of very low demand for the fuel, renewed concerns about methanol's impact on air quality and the strong promise of other fuels.
 The company will continue, however, to operate its ten existing methanol facilities, and will proceed with current plans to add methanol pumps at four more service stations. With ultimately 14 retail outlets, Chevron will have more methanol facilities than any other fuel marketer in the state.
 "We originally envisioned building as many as 25 methanol outlets, which were intended to support about 5,000 flexible-fuel vehicles that the California Energy Commission expected in service by now," said Dave Hoyer, president of Chevron U.S.A. Products Co. "However, the methanol fleet has remained constant at about 600 vehicles, and as a result, our sales average only 18 gallons a day per station. Our 14 outlets should be more than enough to meet current demand."
 In addition, new research has shown that flexible-fuel vehicles (FFVs) operating on either M85 or gasoline worsen air quality in terms of ozone compared to a conventional auto running on average gasoline. That's because FFVs cannot be optimized for either fuel. (FFVs are capable of running on any combination of gasoline and M85 -- 85 percent methanol and 15 percent unleaded gasoline).
 Extensive testing has shown that reformulated gasoline, when used in current production autos, is the only fuel to have clearly demonstrated substantial improvements in air quality. The research is funded by the auto and oil industries, which have joined together in an unprecedented effort to find the optimum combination of vehicle and fuel that will reduce air emissions.
 Other fuels, such as natural gas, are beginning to show strong potential to meet strict low emissions standards imposed by the California Air Resources Board. Chevron will install a compressed natural gas fueling facility at a Sacramento station soon, and the company is actively seeking more sites.
 But methanol still has major questions about its toxicity, cost and limited range, as well as its impact on ozone formation.
 Chevron entered into an agreement with the California Energy Commission in March 1988 to help determine the commercial feasibility of methanol as an alternative fuel. Chevron notified the commission by letter yesterday of its decision to suspend expansion of the methanol program.
 "Since methanol will probably cost much more and do nothing for air quality, it is hard for us to understand what justifies government attempts to shift society toward methanol," said Hoyer. "We see no rational reason why the consumers of California should be forced by rule of law or enticed at taxpayer expense into ineffective solutions to the state's air quality problems."
 To date, Chevron has invested about $4.5 million on the methanol program, including fuel research by Chevron and the auto/oil consortium.
 Chevron opened its first retail methanol pump in June 1989 in Anaheim. Other Chevron outlets are in Diamond Bar, Fairfield, Fresno, Oakland, Rancho Cordova, Santa Cruz, San Diego, Santa Nella and Stockton. Four more outlets are planned in El Monte, Riverside, Santa Fe Springs and Santa Monica.
 -0- 4/1/92 R
 /CONTACT: Mike Libbey of Chevron Corp., 415-894-4440/
 (CHV) CO: Chevron Corp. ST: California IN: OIL SU:


GK -- SF002R -- 3970 04/01/92 15:02 EST
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Date:Apr 1, 1992
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