AMOCO CITES LOWER COST OF REFORMULATED FUELS APPROACH

Reformulated fuels will be a less expensive approach to improving U.S. air quality than alternate transportation fuels such as methanol, Lawrason D. Thomas, executive vice-president of Amoco Corp., told the annual meeting of the National Petroleum Refiners Association last week.

April 2, 1990

2 min read

Modifying the nation's refineries to produce enough reformulated gasoline that can be used in more than 100 million vehicles in the U.S. could cost the industry as much as $20 billion. However, introducing methanol as a transportation fuel in only a portion of the U.S. auto fleet could cost more than $100 billion, Thomas said.

The effects of reformulated fuels and alternate fuels on air quality may be only modest, Thomas warned. That's because there is little scientific data to support much of what is being proposed in new, clean air legislation.

SOLVING THE PROBLEM

Despite the modest effects, industry must solve the air quality problem.

"The industry always has been willing to spend money on measures that will bring cost effective improvements in air quality," Thomas said.

During 1978-87, for example, joint auto/oil industry efforts resulted in a reduction of airborne lead emissions of 88%, a decline in sulfur dioxide and carbon monoxide emissions of 32% each, and a reduction in ground level ozone of 16%.

Those reductions have been costly to the industry.

For example, the current summer Rvp specifications on gasoline in the U.S. have been estimated to cost the industry about $1 billion/year. Further Rvp reductions slated for 1992 are expected to cost refiners another $1.5 billion/year.

Proposed low sulfur diesel fuels could cost the industry $3 billion in capital investment plus $1 billion/year in operating expenses.

Thomas urged the government to move cautiously in developing alternate fuel programs and to wait for results of a joint research effort by three major auto companies and 14 oil companies to gather data on various fuels and vehicle designs that will reduce emissions.

If the pace, scope, and cost effectiveness of clean air legislation now before Congress are wisely framed, environmental progress will be achieved without sacrificing economic growth, Thomas said.