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.

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THE NEXT MEETING DATE FOR THE ADVISORY COMMITTEE IS SET FOR
WEDNESDAY, FEBRUARY 14, 1996 IN SACRAMENTO.

CBG Program Advisory and Subcommittee Activities