GAS FLOW PROBLEM

Ira Newman has run the same gas station and auto repair shop in Anaheim for 31 years. A small mom-and-pop operation, it employs not only him but his wife, son and seven other people. All of them could be out of work by Christmas, however, unless Newman finds a way around federal requirements for underground gas storage taking effect Dec. 22.

“I will have to quit pumping gas,” he said. “The feds don’t care--they have no heart and soul.”

The U.S. Environmental Protection Agency rules require gas stations nationwide to replace underground storage tanks built before 1984. The new, double-walled tanks are designed to prevent gasoline leaks that can contaminate ground water. In addition, owners must install leak monitoring systems and corrosion protection for underground pipes.

Newman did most of that work in 1986. What will sink him, he says, is the necessity of having his tanks tested for compliance, at an estimated cost of $12,000.

“My gross profit is only $6,000 or $7,000 a month,” he says, “and that doesn’t leave much money to invest in such a primitive marginal business.”

Other independent gas dealers will be hit even harder by the new requirements, which experts say could cost $185,000 to $200,000 for each gas station.

Eddie Cortez has operated a gas station and repair shop in Pomona for 25 years, offering services that are hard to find at most corporate-owned stations. Air and water are still free, and attendants gallantly pump gas for women and senior citizens, even at the self-serve island.

But Cortez, who is also Pomona’s mayor, says he can’t afford the $290,000 to upgrade his three underground tanks by the deadline.

Several hundred other independent gas station owners in Orange and Los Angeles counties are in the same boat. Although most of the stations owned by the oil companies have complied with the EPA requirement, the mandate is causing hardship among independent owners, who in Los Angeles County control a quarter of the 2,354 gas stations.

The owners of these mom-and-pop outlets are either scrambling to complete the costly work or, like Newman and Cortez, simply plan to shut down their pumps and offer only repairs.

Besides losing money, Cortez said, he also worries about longtime customers.

“All of my senior citizen customers will be hurt because there is no one around here that offers full service,” he said.

In Los Angeles County, the nation’s biggest fuel market, less than half of the 16,000 underground tanks meet the new standard, according to state estimates this month. That includes storage tanks owned by businesses and government agencies for private fleets.

After Jan. 1, all gasoline distributors will be prohibited from delivering to gas stations that do not comply.

Nobody knows how many independent stations will close or stop selling gas in the next three months.

But it does not look good, said Newman, a spokesman for the Automotive Trade Organization of California, an Irvine-based trade group that represents 1,500 stations in Southern California.

“The little guys will suffer and go out of business,” he said.

The Lundberg Survey, a Camarillo-based firm that reports on oil industry trends, made a similar prediction in a recent newsletter.

“The combination of falling retail margins and the underground storage tank deadline is the one-two punch that will inevitably knock out many smaller, older, less-efficient stations that have stayed afloat up to now,” the newsletter says.

It is the continuation of a trend stretching back to the gas lines of the early 1970s. Shrinking profits have closed hundreds of Southern California gas stations--mostly independents--over the last 25 years.

“The tragedy for our smaller members is that they are family-owned businesses that have been owned by three or four generations,” said Evelyn Gibson, a spokeswoman for the California Independent Oil Marketers Assn., a Sacramento-based trade group representing about 500 stations and distributors.

Not every independent station will close because of the new requirement. More than half of the independent station owners in Los Angeles County operate adjoining enterprises, such as repair shops and carwashes. Gas sales account for about 25% of their profits.

Industry officials say the new tank requirements give a further advantage to major oil companies and their retail chains, even though oil companies initially fought the requirement.

The EPA adopted the new standards, arguing that nearly one in four of the old tanks were leaking.

Although the agency gave station owners 10 years to comply, many waited until the last minute. Evidence of the rush to complete the work is found throughout the county. These are the fenced-off gas stations where contractors are digging massive craters for the new tanks.

Station owners deciding to do the work now may find it is too late.

“If they haven’t applied for approval of what they are going to do, they are not going to make the deadline,” said Carl Sjoberg, an industrial waste manager for Los Angeles County’s Public Works Department, which issues permits for the tank work in 75 of the county’s 88 cities. “All the contractors are busy up to their ears.”

The new requirement has made a lot of work--and profits--for licensed contractors and environmental firms that specialize in replacing and upgrading the underground tanks.

“Everybody who does this kind of work is swamped,” said one Long Beach contractor. “People are finally realizing that they are not going to change the law or move back the Dec. 22 deadline.”

There also is a two- to three-month delay for delivery of the storage tanks from manufacturers.

Joe Kejejian, owner of Del Mar Gas, a small service station in Pasadena, is still waiting for his contractor to finish the work. He is paying with a $150,000 home loan.

Kejejian would have completed the work earlier, he said, but was delayed by a legal dispute with a previous contractor. In anticipation of the work, he has not sold gas for three months.

“I don’t have any leaks, yet I have to replace the tanks,” he said. “It doesn’t make sense.”

After the deadline, motorists may have to drive an extra few blocks to get gas.

Jeff Spring, of the Automobile Club of Southern California, said the changes are expected to cause only minor inconveniences.

“In Los Angeles and Orange counties, there are so many gas stations that it won’t be hard to find another station,” he said.

Fabian Wheeler, a writer from Pomona, has been a frequent customer of Cortez’s shop since 1981. After Cortez stops selling gas, Wheeler will probably fill up at the self-service Texaco station across the street. But, he said, it won’t be the same.

“My main concern is that this man won’t be selling gas because of a bunch of bureaucracy,” he said as he filled the tank on his pickup.

Statewide, only 52% of underground tanks meet the new standards. The compliance rate is about 49% nationwide, according to the Lundberg Survey.

State and federal officials said they are worried about the low compliance rate but insist that they will not move back the deadline.

The California Trade and Commerce Agency has tried to help station owners meet the deadline by offering 10-year loans for 5.6% interest. But only 300 of the 11,200 gas stations in the state have taken advantage of the program.

The agency still has $15 million available, a spokesman said.

Mihran Hovhanessian, who has operated South Bay Petro in South Gate for 13 years, estimated that it will cost him up to $200,000 to replace the tanks at his service station.

He doesn’t think he can squeeze enough profits from his tiny business to afford such a loan, no matter how low the interest rate.

“I have no idea what I’m going to do,” he said.

John Sirob, owner of American Gas & Mini Mart on Rosemead Boulevard near Arcadia, said he cannot afford the $120,000 it would cost him to upgrade.

He plans to stop selling gas once his tanks run empty in December and live off repairs.

“It’s going to hurt my business,” he said, “but what can I do?”