On June 1, 1996, all gasoline sold in California must meet the requirements of the California
Phase 2 reformulated gasoline (California RFG) regulation.  To plan for the introduction
of less-polluting gasoline, Governor Wilson
asked the California Air Resources Board
(ARB) to form the Phase 2 Reformulated
Gasoline Advisory Committee -- a group of
more than 60 representatives from industry,
public interest groups, and government agen-
cies.  For the past four months, the commit-
tee has worked with the ARB to help ensure
a smooth transition to California RFG.

    The committee, chaired by the ARB Chair-
woman Jacqueline Schafer, wrestles with key implementation issues in its quarterly meetings.  These include California RFG's compatibility
with existing vehicles and equipment, adequate
supply, and public acceptance. Subcommittees
are already at work on these issues.

    The Performance Subcommittee has helped
the ARB design fuel testing plans to evaluate
the performance of California RFG in motor
vehicles, fuel storage systems, and other
equipment.  The Subcommittee includes
technical experts such as Dr. Gerald Barnes,
Manager of Alternative Fuels and Heavy-
Duty Activities for General Motors Corpor-
ation, and Jack Segal, Manager of Fuels Dev-
elopment for ARCO Products Company, who
both made presentations at the first Advisory

Committee meeting in July.

    The Transition Subcommittee works with the California Energy Commission and the ARB to develop a technically-sound approach to
estimating gasoline supply and demand.  The
Public Education Subcommittee advises the ARB
on how to best inform the general public, industry, and other government agencies about California
RFG.  The three subcommittees will work closely
with the ARB through the implementation of the
regulation in June 1996.

    At the opening meeting on July 19th, Chair-
woman Schafer highlighted the primary benefit
of California RFG -- less air pollution. "Over the
next 5 years, this one measure will provide
California with its greatest source of emission
reductions."   The next meeting of the Advisory
Committee will be in Los Angeles on February 1.

    With cleaner-burning gasoline due in June
1996, the California Air Resources Board
(ARB) plans to thoroughly evaluate the perfor-
mance and compat ibility of California RFG in
motor vehicles, fuel storage systems, and other
gasoline-powered equipment.  A $1.8 million
testing program is scheduled for February
through August 1995.

    Test plans, drawn up in cooperation with
gasoline refiners, auto makers, and other relat-
ed industries, are nearly complete.  Over 1000
vehicles will be tested

Energy Commission Forecasts Gasoline
Supply and Demand

Can producers meet the demand for California
Phase 2 reformulated gasoline in 1996?  The an-
swer is yes -- according to the preliminary find-
ings of a joint California Energy Commission
(CEC) and Air Resources Board (ARB) study.

    As the mandate for the cleaner gasoline incre-
ases the complexity of bringing fuel to the mar-
ket-place, it also raises concerns about meeting
consumer demand.  To help ensure adequate
supply, the CEC and the ARB are working with
the oil companies and the Phase 2 RFG Trans-
ition Subcommittee to estimate gasoline supply
and demand through the year 2000.

     In the study, the CEC and the ARB used in-
formation provided by gasoline producers, along
with growth rates developed by the California
Department of Transportation and the CEC, to
forecast supply and demand of California RFG
for March 1996.  Supply is estimated to be
between 860,000 to 1,100,000 barrels per day,
with demand estimated at 840,000 to 920,000
barrels.

    The CEC will continue to update their esti-
mates as they receive more information.  In
October, the CEC sent a more detailed survey
form to all California gasoline producers to
gather information for a more complete analysis. The CEC asked oil companies to respond by
December 9 so that the new information can be
presented at the January Transition Subcommit-
tee meeting.

For additional copies of California RFG Forum, California RFG Fact Sheets, or questions about RFG, call (916) 322-6020
or fax (916) 445-5023.

 
Antitrust and Confidentiality Issues

    Oil refiners and others have expressed serious concern over the potential for antitrust violations for those who participate in the Transition Subcommittee.  According to Susan Brown, discussion leader for the subcommittee, the CEC and the ARB are well aware of the problems and are arranging the structure and operation of the subcommittee to avoid sensitive
activities such as the open discussion and
exchange of information regarding company
specific production capacity, production
costs, pricing, and product distribution.  No
company specific data will be discussed in
the subcommittee.  The ARB and the CEC
will handle confidential materials as required
by California law.

Subcommittee Stresses Need for
Broad Outreach Campaign

Who needs to know about California
Phase 2 reformulated gasoline?  According to
members of the California Phase 2 Public Education Subcommittee, "Almost everyone."

    The subcommittee, with over twenty members, is charged with helping the Air Resources Board (ARB) get the word out on cleaner gasoline.  At the first committee meeting, one of the members summed up the importance of a California RFG outreach program stating that "it needs to be a downtown effort."

    As recommended by the subcommittee, the ARB will be requesting proposals from public relations agencies to help plan its California RFG public education campaign.  The ARB is also looking at ways to pool resources to finance the campaign.  A number of organizations and companies represented on the committee are interested in participating in a joint campaign.

    The ARB will publish this quarterly news-
letter along with a series of fact sheets on Calif-
ornia RFG.  Because the purpose of California RFG Forum is to serve those who need infor-
mation on RFG, we invite your comments and
suggestions for future articles.

ARB Board Member Looks Forward to
Driving with RFG

by Jack Lagarias-As a member of the Air Resources Board since 1986, I have been involved with a number of air quality regulations.  The California Phase 2 re-
formulated gasoline (California RFG) regulation stands out, however, because it will immediate-
ly help improve air quality by reducing emissions
from all cars on the road.  In 1991, when the
Board adopted the California RFG regulation,
a federal RFG regulation for the nation's smog-
giest regions was already set to start in 1995.
We were aware that different federal and
California regulations could cause confusion.
However, the state needed greater emission
reductions to help meet clean air standards.

    California RFG, required statewide in 1996,
will reduce volatile organic compounds, nitro-
gen oxides, sulfur, and particulate emissions
more than federal RFG.  With these reductions,
California and local air districts will be better
able to comply with federal and state air qua-
lity standards for ozone.  Car manufacturers
can more readily meet the low emission vehicle
and ultra-low emission vehicle requirements
with a cleaner, less corrosive fuel.  California
RFG will be more cost-effective compared to
other control measures for industry.  And
California refiners will create over 20,000 con-
struction jobs and hundreds of new, permanent
jobs in producing California RFG.

    From our experiences with the introduction
of reformulated diesel fuel last fall, we know
that regulating new fuel specifications requires
careful planning.  Even a technically sound regu-
lation can bring unexpected difficulties.  After a
rough start, it is now apparent that reformulated diesel is fine.  Even the California Trucking
Association -- the regulation's most vocal critic
-- now recommends that California diesel fuel
specifications be adopted as a national standard.

    For the implementation of the California RFG, we have formed an advisory committee to identify, address, and prevent possible start-up difficulties.  An extensive testing program is underway with experts from the oil and automotive industries working closely with ARB staff to help ensure that the new gasoline performs well and is compatible with existing vehicles and equipment.  In addition, other subcommittees are checking on gasoline supply and determining how to best notify the public and all interested parties about RFG.

    In adopting this measure, the Board has acted prudently:  California RFG will be good for California because it is technically sound, cost effective, provides industry with flexibility in formulation, and will reduce harmful air pollu-
tants.

Jack Lagarias is Vice-Chair of the California Phase 2 RFG Advisory Committee.  He is a physicist and registered professional engineer.

with what the subcommittee believes to be a typical blend of Califonria RFG.  Control vehicles for the study will run on conventional gasoline.  Testing will include agricultural equipment, lawn and garden, off-road recreational, and construction equipment.  The ARB will announce the results of the test program as the data are analyzed.

     In addition, other test programs will supple-
ment the ARB's findings.  Manufacturers of utility engines, such as Tecumseh and Briggs and Stratton, have begun field testing their products. General Motors will evaluate the effect of California RFG on materials found in engines and fuel sytems.  GM's tests will include a wider range of fuels including those with ETBE (an oxygenate) and very low aromatic hydrocarbon content.

     Based on previous test results using new fuels similar to California RFG, experts from both industry and government don't anticipate any problems.  But with over 24 million gasoline
-powered vehicles in the state, the testing
will help prevent any surprises when the new
fuel goes on sale in June 1996.

Gasoline purchased (1993) --------13.5 billion gallons

Range of prices for regular unleaded gasoline (1993)

    S. Calif.------------------------$1.16-1.30 per gallon

    N. Calif.------------------------$1.17-1.31 per gallon

*Source:  Calif. Energy Commission and Air Resources Board

California Wintertime Oxygenated -----------November 1992
   Program

Federal Phase 1 RFG (S. Calif. only)---------January 1995

California Phase 2 RFG Test Program--------Feb.-Aug. 1995

California Phase 2 RFG implementation

    Refineries-----------------------------------March 1, 1996

    Terminals-----------------------------------April 15, 1996

    Service Stations----------------------------June 1, 1996