CaRFG Advisory Committee Final Summary Introduction The California Reformulated Gasoline (CaRFG) Advisory Committee met on October 12, 1995, the fifth in a series of planned meetings (see Attachment 1 for the meeting agenda). The Advisory Committee's Chairman, Mr. John Lagarias, began the meeting by giving a brief overview of the Performance, Transition, and Public Education Subcommittee's activities since this Advisory Committee's last meeting on June 7, 1995. The Performance Subcommittee has met on ten occasions to date, the Public Education Subcommittee nine times as of October 12, 1995, and the transition Subcommittee has met eight times. There were no comments received on the draft meeting summary from the June 7, 1995 Advisory Committee meeting. It was, therefore, approved as final. Presentation on Performance Subcommittee Efforts Mr. Dean Simeroth of the ARB gave a presentation on the Performance Subcommittee's efforts since the last Advisory Committee meeting (Attachment 2). The CaRFG performance test program results were discussed. Reported vehicle incidents in the on-road test program were identified and classified (Attachment 3). An overview of the baseline failure rates developed by ARB staff was provided. Mr. Simeroth summarized the results of the data collected. Fuel economy was also evaluated as part of the performance test program. Specifically, adequate information to perform a comprehensive fuel economy analysis was obtained on 70 of the test vehicles. These vehicles had a total of approximately 724,000 miles driven. Results indicated that fuel economy loss was approximately 2-3 percent, with a 7-9 percent standard deviation in the results. These results are consistent with prior fuel economy studies and tests. The ARB is conducting laboratory dynamometer testing on four test vehicles to evaluate fuel economy of various types of gasolines (e.g., oxygenates, nonoxygenates, etc). The individual company testing programs found no statistically significant difference in the performance of CaRFG compared to conventional gasolines. However, the Chevron employee fleet test program, in isolation, did identify a slightly higher rate of fuel system incidents between its test and control vehicles (primarily older, higher mileage vehicles). The Chevron results, though, are still below the ARB's baseline failure rates, and are significantly lower when the results are incorporated into the overall CaRFG test program results. Results of the non-road test programs were summarized by Analisa Bevan of the ARB (Attachment 4). These programs include a wide variety of vehicles, engines, and equipment: utility and hand-held lawn and garden equipment, agricultural, industrial and construction equipment, personal watercraft, snowmobiles, motorcycles, and marine engines. The non-road test program is nearly completed and preliminary findings, to date, have found no performance or durability problems related to the use of CaRFG. At the Performance Subcommittee meeting held on October 11, 1995, the preliminary findings of the CaRFG test programs were discussed. One of the issues discussed was the identification of gasoline and oil seeps in vehicles, engines, and equipment participating in the CaRFG performance test program. Automotive manufacturer representatives on the Performance Subcommittee and the Technical Review Panel (TRP) who participated in an evaluation of the seeps determined that gasoline and oil seeps are considered normal regardless of the fuel used. The preliminary draft findings presented (Attachment 5), indicated that overall CaRFG was determined to perform as well as conventional gasoline in durability and performance. Fuel system incidents that were identified were in predominately older (pre-1991) and higher mileage vehicles. The historical repair rate (based on the ARB staff's repair rate study) for the fuel system components (identified in the test program) was a 10% overall rate versus a 3% overall rate for CaRFG test and control vehicles fuel system components. Chevron's representative, Al Jessel, commented on the statement in the test program's preliminary findings that Chevron used a "non-average CaRFG fuel formulation." Mr. Jessel indicated that he would prefer that this statement be changed to "a different CaRFG formulation." Jack Segal of ARCO indicated it would be impossible to test all fuel formulations. He explained that this was the reason for the Performance Subcommittee agreeing to a fuel formulation that represented an average for CaRFG fuel formulations. After some discussion, Chairman Lagarias and Advisory Committee members agreed that the overall performance test program preliminary findings were satisfactory. However, the Committee requested that the ARB staff and the Performance Subcommittee work together to clarify and agree on the final language in the findings. The Committee agreed that they thought this was the most effective approach to address the issues raised regarding the characterization of the test fuel formulations. Presentation on Transition Subcommittee Efforts Ms. Susan Brown of the California Energy Commission (CEC) presented an overview of the discussions of the Transition Subcommittee (Attachment 6). In summary: The CEC and ARB staff have been working closely with the Transition Subcommittee to continually reassess the CaRFG supply/demand balance. The current forecast is that CaRFG production (901,000 barrels per calendar day (BPCD)) will be more than adequate to meet the most likely demand estimate (861,000 BPCD) in 1996. Maximum refinery production capacity for CaRFG of 962,000 BPCD can provide adequate supply to meet a high demand case (approximately 2 percent growth rate versus current no growth rate) of 913,000 BPCD. The California Independent Oil Marketers Association (CIOMA) and other subcommittee members raised a regional issue related to the ability of terminals, small marketers, and distributors from out-of-state to provide CaRFG to some localities within California that are located near or adjacent to other states' borders. The Subcommittee continues to work on possible solutions to this regional issue. Ms. Brown indicated that the CEC has the capability and prior experience to monitor and analyze energy supplies and demand during major events or emergencies (e.g., earthquakes). The CEC is proposing to establish a CaRFG Assessment Center (RAC) to monitor California's gasoline refinery and distribution system during the 1996 transition to CaRFG. The CEC is working with the gasoline industry to identify contacts (primary and alternate) for each refinery and key points in the gasoline distribution system in California to work with on monitoring CaRFG via the RAC. Gary Patton, Planning Conservation and Conservation League, expressed concern that under the high demand scenario (2% growth rate), California's refiners could not provide adequate supply of CaRFG based on the most likely production level for 1996 (901,000 BPCD). CEC staff responded that if demand did increase above current estimates (e.g, CEC estimate 861,000) refiners do have the capability to adjust their most likely production level for 1996 to a higher level to respond to market conditions. Mr. Patton also expressed concern that after 1999 the CEC high demand forecast indicates that demand would exceed maximum CaRFG production capacity. Mr. Patton asked what plans are being made to address the forecasted potential supply after 1999. Ms. Brown responded to Mr. Patton's concern (above) that after 1996, market conditions will be extremely dynamic. As a result, refiners production plans will be subject to change. Also, to respond to an increase in demand, refiners have the flexibility to change their market slate (e.g., shift from diesel production to more gasoline production), and the possibility of refiners importing blendstocks from out-of-state sources to makeup for supply shortfalls. CEC staff also indicated that the forecasted maximum production capacity level identified for 1996 in the analysis was the only number available to use through 1999. Therefore, if refiners were asked for the year 2000 forecasted levels, those numbers would probably be different. Mr. Lagarias asked if refiners and distributors could work together to identify potential solutions to the regional issue of having adequate supplies of CaRFG for out-of-state distributors to nearby California in-state users. Ms. Brown indicated that antitrust laws prevent such an approach. However, CIOMA and pipeline industry have been working on a one-on-one basis with regional industry members that may be affected by this issue. Ms. Evelyn Gibson of CIOMA expressed frustration with antitrust provisions in preventing a cooperative approach to the out-of-state distribution issue. Ms. Gibson asked the committee to not underestimate the significance of the one percent statewide volume impact for particular areas of the state. She pointed out that for certain areas of California the out-of-state gasoline supply is a significantly greater proportion than one percent. Though the out-of-state supply may be low statewide, it can be very high in certain areas that are rural or near other states. Ms. Gibson also pointed out that it is not just transportation costs that affect the out-of-state fuel prices. Rack prices between distributors out-of-state and in-state can be significantly different and can explain why an out-of-state distributor may be selected as a supplier for an in-state user. As a result, particular localities in California could face rack prices and transportation costs different than other areas of California when CaRFG is implemented. Ms. Gibson also stated that particular areas in the state may not have an alternative source for their supply of gasoline because of prior contracts that could prevent new buyer/seller relationships. Ms. Gibson pointed out that this was not a simple issue with a simple solution but a complex distribution problem. Mary Morgan, Santa Fe Pacific Pipeline, Inc., discussed what her company has done to help with the out-of-state supply issue. Santa Fe Pacific sent a letter to all of its customers about product slate they will move in their pipelines. In the letter, information was requested on what the customers wanted in products by delineating their specific future needs. Santa Fe Pacific continues to talk with its customers and CIOMA about their concerns and needs. Ms. Gibson also clarified that "pipeline" transportation costs versus other transportation costs (e.g., trucking) do Not fluctuate because prices are set through government approval. Ms. Morgan indicated that ARB modifications to the CaRFG regulation of phasing in the compliance requirements over a longer period of time should lessen the problems of transition to CaRFG. Ms. Morgan also said she thought the CaRFG regulatory adjustments are the most significant improvements to address the potential short-term supply problems. Presentation on Public Education Subcommittee Efforts Mr. Peter Venturini of the ARB presented the Public Education Subcommittee's (PES) progress in developing an information outreach program (Attachment 7). In summary: The public outreach strategy was presented, which emphasizes the need to introduce CaRFG as a product with added value and communicate honestly and cooperatively with the public. Background was provided on the CaRFG public relations firm, Novak Communications; how the consultant was selected; and the role the public relations consultant has played in advising ARB and the PES on the development and implementation of the CaRFG public outreach program. Some background was also provided on the public opinion research conducted on CaRFG by Applied Management Planning Group (AMPG) a firm hired by the ARB. Ms. Susan Johnson of AMPG presented a video on the focus group meetings conducted statewide, and then discussed the overall results of the public opinion research. The public outreach plan was approved by the Public Education Subcommittee at its July 1995 meeting and is structured with four phases of outreach implementation. Phase One consisted of: 1) hiring a public relations consultant; 2) completing the public opinion research; 3) approving the public outreach plan; 4) initiating response planning for Phase Four; and 5) developing campaign messages. The program is now in Phase Two: 1) coordination with private sector outreach efforts; 2) preparation and implementation of a media outreach plan; 3) development of short and long-length brochures; 4) development of videos designed for general and mechanic audiences, and media footage; 5) installation of a CaRFG toll-free (800) information line with trained staff; and 6) formally beginning the external CaRFG public outreach efforts. Mr. Venturini indicated that Phase Three will be an expansion of the efforts initiated in Phase Two. In Phase Four, CaRFG will be available to consumers and the proactive approaches initiated in the earlier phases will continue. A rapid response team will be prepared to respond to media inquiries and events. In summary, Mr. Venturini indicated that the foundation of the CaRFG public outreach program is established and that outreach efforts are fully underway. Open Discussion and Comments Following the Presentations What kind of data on fuel economy has been collected? - Besides the fleets in the performance test programs, a select number of these vehicles will utilize federal test program (FTP) methodology for comparing conventional fuel and CaRFG to validate field information with data from a controlled setting. Also, the Department of Energy will be tracking long-term effects on fuel economy through high mileage (30K) accumulation. In addition, the Wisconsin RFG study on fuel economy is already included in the draft ARB paper on fuel economy. Are quality assurance procedures being used in the collection of the data for performance test programs? - ARB recently began development of a quality/assurance tool to check the data entered in the program's database. In addition, ARB inspection teams are working with the fleets to ensure that data acquisition and submittals are subject to quality control. Also, there are quality control checks and procedures for the collection of fuel samples. Finally, statisticians are working on this effort to recommend ways to handle data collection and analyses. What did the Wisconsin Study conclude on the health effects of MTBE in RFG? - The Wisconsin study could not directly relate health effects to MTBE. A similar study has recently become available from Maine. Other comments and questions raised : 1) Comment was made regarding the need to carefully distingish between vehicle failures and incidents. 2) Is there any information on the summertime benefits of oxygenates or at what level? Announcements Chairman Lagarias announced that the ARB electronic bulletin board is now operational, and a section is devoted specifically to CaRFG issues. Users can view and download CaRFG Advisory Committee and Subcommittee meeting agendas and summaries, as well as other information. This service is now on-line and can be accessed by calling: (916) 322-2826. Future Subcommittee meetings will be scheduled in December at the ARB Headquarters building in Sacramento. ------------------------------------------------------------------------------------------------------------------ THE NEXT MEETING DATE FOR THE ADVISORY COMMITTEE IS SET FOR WEDNESDAY, FEBRUARY 14, 1996 IN SACRAMENTO.
CBG Program Advisory and Subcommittee Activities