1998 ANNUAL REPORT
Fuels

Advocacy, Coalition Building Continue on MTBE Issue

As they have for several years, fuel issues dominated the agenda of WSPA downstream committees in 1998 and involved advocacy and coalition building at the local, state and national levels.

The debate over the use of MTBE and other oxygenates in gasoline continued unabated this year. The failure of the U.S. Congress to pass the Bilbray/Feinstein bills to allow refiners greater flexibility in manufacturing cleaner-burning gasoline was perhaps the greatest disappointment. WSPA’s MTBE Task Force launched an advocacy campaign to overcome opposition to amending the federal Clean Air Act and had enlisted the support of several environmental groups and nearly every air district in California. In addition, WSPA Board Member David O’Reilly and CARB Chairman John Dunlap testified before Congress on the need for the legislation, but the congressional session ended without resolution of the issue.

In California, WSPA forged a partnership with the Association of California Water Agencies (ACWA) to research the transport of MTBE in groundwater and to identify effective remediation technologies. Meanwhile, a series of state-mandated studies on the health and economic effects of MTBE use continued and WSPA participated in the process of establishing both primary and secondary drinking water standards for MTBE.

MTBE advocacy is expected to continue well into 1999 as the results of various studies are released and the new federal underground storage tank regulations come into force at the beginning of the year. WSPA has continued its support of rigorous source protection standards and endorsed legislation prohibiting deliveries of gasoline to storage tanks not in compliance with the regulations.

Nevada Joins the Debate on MTBE
WSPA also worked to educate representatives of the Clark County Health District as they considered a ban on MTBE in Las Vegas, Nevada. The District board passed a resolution calling for the State Environmental Commission (SEC) to analyze by March 1, 1999 the possible drinking water contamination impacts associated with summertime gasoline oxygenated with MTBE, before deciding whether the District should adopt new regulations. In addition, the resolution prevents the District from adopting reformulated summertime gasoline regulations which allow the use of MTBE until after this date. WSPA met with the SEC to review the multiple studies already underway in California. Mean-while, WSPA continued its 1997 legal challenge to the defacto Clark County ethanol mandate for wintertime gasoline.

Mobile Source Forum to Focus on Fuels/Vehicle Use
WSPA took the lead this year in organizing the western efforts on regional haze through its previous involvement in the Grand Canyon Visibility Transport Commission and now as co-chair of the Mobile Source Forum in the Western Regional Air Partnership (WRAP). A Fuel/Vehicle Subcommittee began operations this fall to identify and develop approaches to understanding such issues as emission standards, inspection and maintenance, low emission vehicles and other matters of essential concern to the industry. The results will be reported to the Mobile Source Forum. Other subcommittees have been formed to investigate a host of issues impacting mobile emission sources. WRAP’s goal is to assist the western states in preparing State Implementation Plans on regional haze.

Debate Over Vapor Recovery Continues
Numerous issues involving service station vapor recovery systems remained active throughout 1998. The controversy over onboard refueling vapor recovery (ORVR) and service station vapor recovery system emissions compatibility abated somewhat once testing conducted by the California Air Resources Board (CARB) suggested that any problems should remain insignificant for several years. However, serious problems were discovered with vapor recovery system equipment—vacuum assist Stage II systems in particular. Various air districts, through the California Air Pollution Control Officers Association, placed additional pressure on CARB to remedy the various problems, but their priorities were not always consistent.

In order to deal with the situation, CARB established a Vapor Recovery Executive Committee, of which both WSPA and the American Petroleum Institute are members. The purpose of the committee is to provide guidance by initially identifying and prioritizing all of the issues. The committee will also provide suggestions to improve and enhance CARB’s vapor recovery program.

Diesel Coordinating Task Force Established as Risks of Diesel Exhaust Particulates Explored
As the California Air Resources Board (CARB) moved forward with listing diesel exhaust particulates as a toxic air contaminant (TAC), a Diesel Issues Coordinating Task Force has been extablished by the RM&T Committee to oversee management of the issue for WSPA. CARB’s action came after two board hearings and extensive negotiations with the trucking industry, engine manufactures, oil industry, environmental organizations and public health advocates. A key aspect of the Board’s Resolution is the listing of particulate emissions rather than whole diesel exhaust as a TAC. WSPA participated in the California Chamber of Commerce coalition, "Californians for a Sound Fuel Strategy," whose advocacy focused on the scientific uncertainties of CARB’s staff report, the need for additional research on diesel fuel being used in California, and risk management for ambient, not source specific, exposures. Key issues included the form of the listing (the staff proposal contemplated "whole diesel exhaust"), and the potential for broader application of the cancer risk estimate. Included in the Board’s actions is the development of risk management guidelines for use by the air pollution districts, and a directive that staff pursue additional health studies and begin the risk management process.

We can expect that dialogue will continue throughout 1999 when CARB continues the risk management process for diesel exhaust particulates. As indicated at the Board hearing, CARB has established a Diesel Toxic Advisory Committee consisting of impacted industries, organizations and individuals, which will review and comment on the control measures considered by CARB staff throughout the risk management process. The true economic impact of California’s actions to list diesel exhaust particulate emissions will not be known until control measures have been implemented.

RFG is a Hot Ticket in the Las Vegas Area
The Clark County Health District (CCHD), Las Vegas’ air quality agency, proposed a series of cleaner-burning gasoline regulations in 1998, including one that would have required CARB reformulated gasoline (RFG) starting in the summer of 1999. WSPA successfully argued against an ozone season gasoline since the area is in ozone attainment. However the CCHD, acting on the belief that the area will not meet the new eight-hour ozone standards, ordered additional studies to justify a summer gas regulation next year. The push for summertime RFG also evolved into a variety of proposals for a wintertime carbon monoxide gasoline, with the final one containing low sulfur and aromatics specifications. It will be voted on next Spring.

This year WSPA also participated in the design of a "Consensus Building Program" by the Department of Comprehensive Planning which will inform educators, legislators and other decision-makers about air quality problems and solutions.

Air Quality Activities in High Gear in Phoenix
Ozone, particulate matter (PM) and carbon monoxide problems continued to escalate in the Greater Phoenix area this year, leading to legislative action and enhanced activity by WSPA member companies. The legislature adopted many of the 47 emission control measures recommended by the Governor’s Air Quality Strategies Task Force, including a wintertime CARB reformulated gasoline requirement beginning in 1999, with an ethanol mandate, RVP limit, and sampling/modeling provisions. Diesel fuel reformulation was not approved in this legislative session, but is expected to be proposed again next year. Throughout 1998, WSPA helped guide development of the State Implementation Plans for PM and carbon monoxide, while the U.S. Environmental Protection Agency finalized a PM Federal Implementation Plan.

"Sunset Review" Sought on Clean Fuel Outlet Mandate
At WSPA’s request, the California Air Resources Board (CARB) staff has begun the "sunset review" process on the Clean Fuels Outlet regulation, which requires retail gasoline stations to make available alternative fuels if 20,000 vehicles using that fuel are registered in the state. The sunset review process is an element of the state’s Regulatory Reform initiative, which specifies that all regulations must be reviewed periodically for continued effectiveness and relevance.

CARB has agreed that the regulation is poorly drafted and burdensome and has elected to work with the California Energy Commission to review it. CARB will hold a sunset review hearing on the mandate later this year and a WSPA working group is currently developing a more workable alternative.