ARB Adopts Rule for 30% Cleaner Gasoline : Pollution: Small refiners opposed the formula, to take effect by 1996. Price will rise 12 to 17 cents a gallon.

Gasoline, which fuels vehicles responsible for more than half the pollution in California’s smoggy skies, will be about 30% cleaner and 12 to 17 cents per gallon more expensive by March, 1996, under a formula adopted Friday by the state Air Resources Board.

“This is one of the biggest, most comprehensive rules that we’ve passed,” said ARB Chairwoman Jananne Sharpless. “But this is just getting us closer (to clean air). We’re not there yet and this one thing isn’t enough to do it.”

The board heard about 12 hours of testimony over two days, mostly from a divided oil industry, which will have to spend $2 billion to $5 billion to retool refineries to produce the cleaner gasoline. Companies expect the process to take about four years.

Two companies, Arco Products Co. and Ultramar Inc., supported strict gasoline specifications as the most cost-effective way to fight smog. They joined what ARB member Brian Bilbray jokingly labeled “an unholy alliance” with environmental groups, local air quality management districts and car manufacturers.

But small refiners said they may be forced out of business, even though those producing fewer than 50,000 barrels a day will have until 1998 to meet the new requirements. They sought an extension until the year 2000.

“Give us at least a fighting chance,” said Craig Moyer, counsel for the American Independent Refiners Assn. “This proposal will do what the antitrust laws have been preventing and leave the market to the major (oil companies).”

Lack of competition could end up costing consumers even more, Moyer said. And, he added, small refiners produce significant amounts of diesel fuel and military jet fuel. “Elimination from the marketplace could affect more than gasoline,” he warned.

In California, 10% to 13% of automobile fuel is provided by small refiners.

Other large oil firms, including Chevron, Unocal and Texaco, tried to get the board to relax the limits. They suggested other methods for cleaning the air that would still raise costs for consumers, but keep the burden off their industry.

For instance, Doug Youngblood, environmental health and safety director for Texaco, recommended buying up and scrapping older cars without smog controls, forcing owners to buy newer cars or use public transportation. He suggested a program financed by a 15-cent-per-gallon gasoline tax.

“That’s the game that’s being played,” Sharpless said in an interview after the vote. “It’s ‘Who pays?’ ”

The board is requiring substantial reductions in several components of gasoline that lead to pollution, including certain hydrocarbons, sulfur and benzene.

The board voted 7 to 1 to split the difference between its current staff recommendation of a 10-to-16-cent-a-gallon hike, and an earlier staff proposal that would have raised the cost 14 to 20 cents a gallon. The staff had changed its position after hearing oil industry protests.

The formula adopted by the board would provide more than 90% of the reductions in ozone, the major component of smog, that the original staff plan projected, and more than 95% of the decrease in total pollutants.

Board member John Lagarias, an air pollution control engineer, fashioned the compromise that would allow refiners to aim for an average over 90 days, rather than flat limits every day.

Arco Products Co. already has plans to market a clean gasoline by late 1995 that would comply with the new rule, company president George Babikian says, at a cost of about 16 cents per gallon over regular unleaded gas.

The huge investment required by industry, he said, could even be helpful to the state’s sluggish economy. “We’ll need new construction and that will provide jobs,” he said.

Most of the other oil companies, he acknowledged, “are sticking pins in our doll right now.”

“ARB stood up to the bullying and the empty rhetoric,” said Tim Little, executive director of the Coalition for Clean Air.

The reformulation would cut emissions by about 1,435 tons each day statewide, with about half the reduction in the Los Angeles region. That amounts to a 5% reduction in total air pollution. Potential cancer cases in California would be reduced by 35 cases per year from 1996 to 2010, the ARB predicts.

Car exhaust is responsible for about 50% of the smog and nearly all of the carbon monoxide fouling the air in California, home of the nation’s dirtiest skies. About 90% of the state’s residents live in areas that violate federal and state air quality standards. Los Angeles has the most polluted air in the United States.

Powering a car with gasoline releases major components of smog, including hydrocarbons and nitrogen oxides, which speed the aging of lungs, and carbon monoxide, which reduces the ability to carry oxygen, straining the heart. Also emitted is sulfur dioxide, which irritates the respiratory tract and leads to the formation of small particles that impair visibility.

Carcinogens such as benzene, acetaldehyde and 1,3 butadiene also flow from tailpipes.

The state has been attacking the problem by requiring changes in both vehicles and fuel.

But “we have also had a dramatic increase in the number of cars here and the number of miles they drive,” said ARB spokesman Bill Sessa.

By 1994, all new cars sold in California must be at least 50% less polluting than the models sold in the state today.

The first phase of the gasoline cleanup, adopted by the ARB last year, takes effect in January. No more leaded gas will be sold in California and the product at the pumps will include additives to keep fuel injectors clean. That reformulation--modest compared to the formula approved Friday--is expected to cost consumers about two cents a gallon, said Gina Nelhams, who monitors fuels for the Western States Petroleum Assn.

The second phase will make statewide standards even more stringent than those called for by the federal Clean Air Act for the most polluted regions in the country--among them, Los Angeles, San Diego and Ventura counties--by 1995. ARB staff members said they believe the fuel will also meet federal requirements for the year 2000.

The ARB believes that the new clean gas standards will add about half a penny to the almost 38 cents a mile that the average motorist pays to drive 12,000 miles a year, Sessa said.

The new formula requires:

- Cutting olefins by 50%. These are hydrocarbons that react readily with nitrogen oxides in sunshine to form ozone.

- Cutting aromatic hydrocarbons by 25%. These are also highly reactive hydrocarbons.

- Cutting sulfur by 80%. Crude oil from Alaska and the San Joaquin Valley, used to develop much of California’s gasoline, has a high sulfur content compared to crude from other sources.

- Cutting benzene by 50%. Benzene, a hydrocarbon, was the first compound identified by the state as a toxic air contaminant.

Auto manufacturers said, however, that they are not sure whether the new gasoline will be clean enough to prevent them from switching to designs for other fuels, such as compressed natural gas, methanol or electricity, in order to meet their industry’s requirements for cutting pollution.

“We’re right on the borderline,” said Harold Haskew, a General Motors executive who spoke on behalf of the Motor Vehicle Manufacturers Assn.

Haskew said the new gasoline should not affect car performance or mileage.