U.S. BRIEFS

REFINING

ARCO PRODUCTS CO. is withdrawing its application to California's South Coast Air Quality Management District for emission reduction credits for introducing its cleaner burning EC Premium gasoline. It blames negative public reaction. ARCO planned to use emissions credits earned for its reformulated gasoline to expand its Carson, Calif., refinery to produce more reformulated gasoline. Environmentalist groups had complained EC Premium's air quality gains would be negated by ARCO's use of the credits.

AMERICAN PETROLEUM INSTITUTE says 134 U.S. refineries with a combined capacity of 2,493,988 b/d were closed during 1981-89. The closures were partially offset by reactivation of 32 refineries in the period.

SHELL OIL CO. will pay Illinois $550,000 to settle a lawsuit over alleged environmental violations at its refinery near St. Louis. The state attorney general accused Shell of 22 violations of state pollution laws. Shell agreed to make modifications at the plant and clean up 282,000 gal of gasoline that spilled in December 1989.

SUN CO. is examining options for its Tulsa refining/marketing operations as part of an asset performance evaluation throughout the company.

ALTERNATE FUELS

OGDEN MARTIN SYSTEMS INC., New York, is in final contract negotiations with Mercer County Improvement Authority for a 1,450 ton/day waste to energy plant to serve Mercer and Atlantic counties, N.J. The contract is to cover design, construction, and operation of a plant to process as much as 450,000 tons/ year of waste and produce about 50,000 kw of power.

TRANSPORTATION

NORTHWEST PIPELINE CORP. let contract to Davy McKee Corp. for engineering and procurement services on a 534 MMcfd expansion of its gas pipeline system. Davy will design compressor stations for sites at Mesa, Wash., and Sutherland and Stanfield, Ore., and revamp and expand compressors at stations in Sumas, Wash., and Little Valley and Owyhee, Ida. Northwest also plans to lay 612 miles of line and expects to begin service on the $446 million expansion in January 1993.

TRANSPORTATION DEPARTMENT'S Research and Special Programs Administration proposed a rule to extend hydrostatic testing to all interstate pipelines carrying hazardous liquids built before Jan. 8, 1971, and intrastate lines built before Oct. 21, 1985. The proposal, detailed in the May 22 Federal Register, aims to set an adequate margin of safety for pipelines for which federal rules have not set maximum operating pressure. Similar limits would be set for carbon dioxide lines.

SPOT MARKET CORP., Houston, plans a $1 0 million, 20 mile, 24 in. pipeline near Barstow, Calif., to connect with Kern River Gas Transmission Co., Mojave Pipeline Co., Pacific Gas & Electric Co., and Southern California Gas Co. systems. It soon will announce an open season for transportation capacity applications.

KERN RIVER GAS TRANSMISSION CO. and Mojave Pipeline Co. let contract to Scientific Software-Intercomp Inc., Houston, for gas applications programs, including a real time model with leak detection, composition tracking, linepack analysis, and station level modeling of compressors. Installation is expected by March 1992.

FIRST RESERVE GAS STORAGE INC., Greenwich, Conn., signed a letter of intent with Endevco Inc., Dallas, to buy the remaining 50% interest it doesn't own in the first two phases of the Hattiesburg gas storage project at Hattiesburg, Miss., for $8.25 million cash and about $19 million in debt assumption. Endevco will retain its rights to future Hattiesburg storage projects.

EXXON CORP. and Exxon Shipping Co. withdrew guilty pleas with Alaska's U.S. District Court in the federal criminal pollution case stemming from the March 1989 Exxon Valdez tanker spill off Alaska (OGJ, May 27, Newsletter).

HANOVER ENERGY INC., Dallas, owns 24% of United Gas Pipe Line Co. following acquisition of part of United's bank debt. The transaction reduced United's total debt to $285 million. In June 1990, when United began restructuring, its total consolidated debt was $800 million. The purchase was made possible in part by a $50 million equity investment in Hanover by GKH Partners LP.

COMPANIES

CHINA INVESTMENT & DEVELOPMENT CO. LTD., Tapei, bought 50,000 shares of preferred stock and warrants to buy as many as 5 million shares of common stock for $5 million from Exploration Co. of Louisiana Inc. (XCL). CIDC and XCL have been discussing investment opportunities since last year.

DRILLING-PRODUCTION

EQUITABLE RESOURCES INC., Pittsburgh, plans to buy the Appalachian basin oil and gas properties of ANR Production Co., including 200 wells, 220,000 net acres, and a 200 mile gas gathering and compression system. Most of the leases are in Virginia near Equitable's Southwest Virginia and eastern Kentucky operations.

PAN PETROLEUM MLP, Kansas City, Mo., agreed to buy acreage and 43 wells with estimated reserves of more than 50 bcf of gas and 1 million bbl of oil in Blocks 52, 53, 54, 55, 56, and 58 in West Delta area off Louisiana from ARCO, Conoco Inc., OXY USA Inc., and Texaco Exploration & Production Inc. Gross production is more than 18 MMcfd of gas and 300 b/d of oil and condensate.

GOVERNMENT

ENVIRONMENTAL PROTECTION AGENCY proposed that electric utilities be allowed to buy and sell rights to emit sulfur dioxide beginning in 1993, its first proposal of such emissions auction rights. The auction system, authorized under 1990 Clean Air Act amendments, is aimed at cutting emissions of suspected contributors to acid rain.

EPA issued a single set of summer gasoline volatility rules for Texas. It initially subjected East Texas to less stringent standards than West Texas, but state officials complained that caused supply disruptions. EPA extended the West Texas standard to the whole state, requiring a 9 psi Rvp standard during June-August.

BUREAU OF LAND MANAGEMENT wants to double fines for oil companies that violate federal operating requirements on federal and Indian oil and gas leases. BLM proposes a $1,000/day fine for failure to install proper well control equipment and drilling, deepening, converting, or abandoning a well without approval.