Venezuela last week said it will file a protest against congressional votes that will limit Venezuelan gasoline exports to the U.S.
It said the basis of its appeal, under the General Agreement on Trade and Tariffs, will be that the U.S. is discriminating against non-U.S. gasoline.
In a 222 148 vote last week, the House of Representatives joined the U.S. Senate in denying the Environmental Protection Agency funds for a rule facilitating Venezuelan gasoline imports.
EPA's reformulated gasoline (RFG) rules require each U.S. refiner or products importer to keep their conventional gasolines as clean as the gasoline produced or imported in 1990. The aim is to prevent refineries from dumping "dirty" gasoline byproducts from the RFG refining process into conventional gasoline.
The quality of a refinery's gasoline in 1990 will be its baseline until 1998, when all refiners must comply with a "complex model" for RFG.
U.S. refiners will use baselines established by test data on 1990 gasoline. Because EPA could not verify the baselines of imported gasoline manufacturers, it assigned importers a baseline that approximated the average quality of 1990 U.S. gasoline.
Venezuela objected, saying the rule would unnecessarily limit its unleaded regular gasoline exports to the U.S. Northeast.
EPA then proposed a rule that would allow non U.S. refiners to petition for their own baseline if they had supporting data. Exemptions would be subject to a number of conditions.
HOUSE DEBATE
In the House floor debate, opponents of the EPA rule said it would give Venezuela a special advantage.
Rep. Joe Barton (R Tex.) said, "Let Venezuela challenge under GATT. GATT specifically says each nation can set standards for safety, health, and environment."
Rep. John Dingell (D Mich.) complained the administration struck a deal with Venezuela. "The State Department entered into agreements with the Venezuelan government to promulgate such a rule in order to provide Venezuelan refiners an alternative baseline which could be less environmentally sound and give an advantage to the Venezuelans over domestic refiners."
Rep. Phil Sharp (D Ind.) took a more pragmatic view. He said he did not particularly support Venezuela, but allegations that Venezuelan gasoline would be "dirtier" than the U.S. product were simply untrue.
He said, "What is going to happen is about 3 4% of the supply of gasoline for Americans next January will not be available unless American refineries can outperform themselves and produce it."
Sharp warned the potential shortages could cause price increases of 10 50cts/gal.
"If you don't believe what I am saying, look at what happened last January when we phased in the first part of clean diesel for a much smaller market in this country."
Copyright 1994 Oil & Gas Journal. All Rights Reserved.
