The politics of vehicle fuel bubbled beneath the surface at the American Petroleum Institute's annual meeting this month in Houston.
While API officials recommended partnerships within and among industries to pursue regulatory reform, automobile industry representatives called for a joint effort to produce a standard, low sulfur gasoline.
Their call comes as the U.S. refining industry completes its first year of compliance with federal requirements for reformulated gasoline and prepares for a scheduled toughening of fuel specifications under the Clean Air Act amendments of 1990.
U.S. refiners recently raised concerns in Washington, D.C., that proposals for a national standard for vehicles will lead to new fuel requirements applied nationwide.
AUTO INDUSTRY VIEW
U.S. automakers are standardizing vehicle models and designs worldwide and want a standard fuel for their new products.
"What quality really means is reduced variability in your products and in ours," Alex Trotman, chairman and chief executive officer of Ford Motor Co., told API members.
Trotman said a lack of communication between the "codependent" auto and oil industries has led to development of technologies that don't match.
While automakers converge models and move toward common designs, he said, "We're making investments without really knowing what's coming down the road from the petroleum industry...
"It's really the customer who's the ultimate regulator. If the customer is concerned with the environment, we need to be, too."
Keith B. Termaat, Ford strategic standardization manager, was more specific: "Experts tell me that high quality gasoline with a very low sulfur content - for example, 40 ppm - and no metallic additives would reduce auto emissions 15-20% immediately at a nominal consumer cost."
The fuel would improve catalyst efficiency, warranty, and vehicle downtime and save hundreds of millions of dollars a year, he said. New auto engines won't work properly unless "the quality of gasoline is improved and the variability of gasoline quality in the U.S. is tightened."
Both Ford executives criticized fuel standards procedures of the American Society for Testing and Materials (ASTM) as too bureaucratic and slow. Termaat urged oil companies to exceed fuel standards of the American Automobile Manufacturers Association (AAMA).
"These standards say nothing about reducing sulfur, which must be done for our mutual customers," he said.
Termaat urged extension of the auto-oil alliance established 4 years ago to provide data on auto fuel emissions in conjunction with development of reformulated fuel specifications. An extended alliance, he said, could set standards for high quality fuel with very low sulfur content and no metallic additives.
In Europe, he said, companies or groups can use a mechanism called publicly available specifications to function immediately while a formal specification awaits approval. A joint auto-oil effort could use the mechanism for a fuel based on AAMA speci- fications to bypass the formal standards system and win designation as an international standard, Termaat said.
REFINERS' WORRIES
Before the API meeting, the National Petroleum Refiners Association was voicing worries about a U.S. government initiative it fears will lead to a national fuel with sharply reduced sulfur content.
The initiative is the Environmental Protection Agency's October proposal for a national low-emission vehicle (LEV) under a program that would set new tailpipe emission standards for nitrogen oxide, carbon monoxide, formaldehyde, particulates, and non-methane organic gases.
EPA made its proposal after automakers objected to a petition by 12 northeastern states to adopt California's LEV standards in their effort to reduce ozone smog. The automakers don't want to have to sell cars in California and the Northeast different from the ones they sell elsewhere in the country.
EPA's proposal uses California Phase II gasoline as the certification test fuel for the national LEV program. The fuel has average sulfur content of 30 ppm and a specified maximum of 40 ppm. NPRA estimates the overall U.S. average sulfur content of gasoline is 300-400 ppm.
"Reducing sulfur content in gasoline is an exceedingly expensive proposition," said Robert H. Campbell, chairman, president, and chief executive officer of Sun Co. Inc., in testimony for NPRA on the EPA proposal (OGJ, Nov. 6, p. 23).
The stated concern about gasoline sulfur content is the malfunction indicator light for onboard diagnostic systems in California LEVs and their prospective national offspring. The lights are supposed to illuminate when emission systems don't work and to stay lit so inspectors can see them until problems are fixed.
Tests show that gasoline containing more than 40 ppm sulfur might make the lights turn on when there are no emissions problems.
Campbell called the light problem "a nuisance issue" that has nothing to do with cleaner air. Citing the regulatory reversals that complicated introduction of reformulated gasoline, he urged EPA to clearly state that its national LEV program will not lead to requirements for a new fuel.
The Sun chairman said Pennsylvania's last-minute decision to rescind its voluntary participation in the reformulated gasoline program cost his company nearly $50 million. Other companies, he noted, suffered similarly.
"Having burned our hand on that hot stove, we are unwilling to be burned again," Campbell said, adding, "A national low sulfur fuel makes last year's reformulated gasoline experience look like pocket change."
URGING PARTNERSHIP
API leaders didn't directly address the fuel specification issue but recommended partnerships such as the auto-oil alliance as a way to seek regulatory reform.
Charles J. DiBona, API president and chief executive officer, said the industry has had to adopt a defensive stance against regulation for 30-40 years but has a fresh chance to take the offensive.
"This is our long awaited opportunity to rationalize and streamline the processes of government," he said, asserting that government should restructure as companies have.
But the oil industry needs to work with other businesses to do the job, DiBona said. "We're facing a concerted effort (to avoid change in government), and we must respond with a concerted effort and concerted resources."
API Chairman Kenneth T. Derr, chairman and chief executive officer of Chevron Corp., related DiBona's message to the auto- oil alliance, which he said represents a way to respond to a persistent "antioil movement."
The alliance, he said, "has helped make the point-and strongly-that there is no better or more economical fuel system today or in the foreseeable future than the combination of new, efficient cars using reformulated gasoline."
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