ARB Grants Chevron Gasoline Variance
For immediate release
SACRAMENTO – The California Air Resources Board (ARB) today granted Chevron Products Company a temporary variance to sell gasoline that does not meet the state's clean air requirements for up to 45 days in Northern California and the Central Valley.
"The variance was granted to avoid a supply disruption caused by unforeseeable problems at Chevron's Richmond refinery," said Jerry Martin, ARB spokesman. "ARB's fuel regulations allow refiners to apply for short-term, temporary variances to assure California's fuel supply," he added.
Production at Chevron's Richmond refinery has been reduced because of an explosion Saturday at a gasoline-making unit. The refinery was already working at less than capacity because of an explosion and fire in March. The two events leave the refinery operating at a shortfall of about 80,000 barrels-per-day. There are 42 gallons in a barrel.
Without the variance, Chevron claimed it would have to begin reducing deliveries to all Northern California customers by the middle of next week. The variance has multiple conditions that will ensure that emission increases are minimized. Among the conditions, Chevron is prohibited from selling any non-complying gasoline in Sacramento or Southern California, areas that have the most severe ozone problems according to federal rules.
Today's action is the first time the ARB has granted such a variance for gasoline. However, similar variances were granted to several refiners in 1993 and 1994 to alleviate a shortage of diesel fuel. Today's agreement also requires Chevron to purchase the cleanest available gasoline whenever possible. Even variance gasoline will be cleaner burning than the majority of the fuel sold in the rest of the country.
As part of today's agreement, Chevron will pay 15 cents for each gallon of non- conforming gasoline sold; a fee that will reach $22 million if the entire 3.5 million barrels are sold. The money goes into an account used to reduce air emissions by funding repair or scrapping of older, high-polluting automobiles. Though there may be an increase in smog-forming emissions this summer, the auto scrap and repair program is expected to bring a 3-to-1 air emissions benefit in the future.