California Reformulated Gasoline

                     Transition Subcommittee

                         Meeting Summary
                          August 2, 1995

                  California Air Resources Board

II.   Introduction

     The California Reformulated Gasoline Transition Subcommittee held a 
     meeting on August 2, 1995 in Sacramento, from 9:00 am to 12:00 pm.

     The key issues discussed were:

     o    Variance Guidelines Status Report
     o    California RFG Balance Update
     o    "What If" Scenarios - Robert Brown Refinery Model
     o    RFG Assessment Center 
     o    Compliance Plan Update

     Attached for your information are copies of the presentations which were
     made to the subcommittee, and a copy of the meeting attendance list. 
     Inquiries about this meeting summary should be directed to Mr. Greg Allen,
     Transition Subcommittee Secretary,
     at (916) 327-5599.
III.  Variance Guidelines Status Report
     ARB staff presented a brief summary of their August 1, 1995, workshop
     regarding final guidelines for variances from the standards in the
     California reformulated gasoline regulations. The guidelines are intended
     to clarify policy regarding variances and to promote efficient
     consideration of any applications.  Staff is recommending  a fixed
     mitigation fee of  $0.15 per gallon be required of  variance recipients
     while marketing non-complying gasoline. Although there has been interest
     expressed in establishing a flexible fee schedule which gives 
     consideration to overall quality of variance fuel, operating costs, and 
     other market factors, most workshop participants favored the fixed fee 
     approach.  Staff believes a fixed fee provides an element of certainty 
     which is desired by industry, provides for equitable treatment of 
     applicants, and encourages potential applicants to first look to the 
     market for solutions to short term production problems rather than seek 
     a variance.

     The final draft of the guidelines should be completed by the end of 
     August, at that point the document will be presented to the Air 
     Resources Board as an informational item.  There currently is pending 
     legislation which may require formal adoption of variance guidelines.  
     If not mandated, formal adoption is not anticipated and the guidelines 
     would simply be issued as a final draft.   

     Contact: John Courtis  (916) 322-6019

IIII.California RFG Balance Update
     On October 18, 1994, California Energy Commission staff presented an
     initial assessment of the RFG supply/demand balance to the Transition
     Subcommittee.  As additional information becomes available staff updates
     their analysis and presents results to the subcommittee.  Today, CEC staff
     presented the latest of these updates dated August 2, 1995 (copy 
     attached).  This update is based upon new information obtained from the 
     CEC/CARB Joint RFG Survey forms, updated CARB RFG Compliance Plans, and 
     ongoing communications with industry representatives. 

     The primary finding of this evaluation is that California refiners have 
     the ability to provide adequate volumes of RFG during the first full 
     year of the regulation, even under a worst case high demand scenario.  
     The analysis indicates that gasoline demand has been relatively flat 
     since 1992 and is not expected to approach the worst case high demand 
     scenario growth rate of two percent by 1996.

     Contact: Gordon Schremp  (916) 654-4887

IIV. "What If" Scenarios - Robert Brown Refinery Model

     Robert Brown, of Robert Brown Associates (RBA), presented an overview of  
     a refinery model which he developed and recently enhanced under contract 
     to the CEC.  The model is a feed-forward logical simulation of a typical
     modern refinery providing step-by-step volume, weight, and heat balances
     including subroutines for vapor equilibrium, phase separation, and
     distillation.  Presentation materials were distributed (copy attached)
     which describe the model in further detail.  Enhancements included 
     making the model more user friendly, accommodating reformulation, 
     incorporating utility variables, and providing for economic analysis.  
     The CEC intends to use this model to improve energy forecasts, perform 
     in-depth impact analyses (yields, energy, emissions, and economics) of 
     changes in crude input or product specifications, identify conservation 
     opportunities, and evaluate unplanned process unit outages.  

     For demonstration purposes, RBA attempted to use a base case 
     configuration of the model to evaluate the ability of a typical 
     California refiner to make RFG during an unplanned outage of a key 
     process unit. Several members of the subcommittee expressed concern 
     that the base case configuration provided too much operational 
     flexibility, resulting in an ability to produce greater volumes of RFG 
     than would be expected by individual refiners.   

     Contact: Tom Glaviano  (916) 654-4874

VV.  RFG Assessment Center 

     CEC staff presented an overview of the RFG Assessment Center (RAC) being
     developed to assist both industry and the public in a smooth transition 
     to the production, distribution, and use of reformulated gasoline.  The
     mission of the RAC is to obtain RFG related information, analyze the
     information to determine potential impacts, and provide state decision
     makers with accurate and timely assessments.  The presentation (copy of
     presentation materials attached) addressed issues of confidentiality, 
     time period of operation, general structure and function, type and 
     sources of information to be collected, and method of data collection.
     There was concern expressed by several subcommittee members regarding 
     the dissemination of the data collected.  It was quickly pointed out 
     that there will be very little, if any, dissemination of data.  The 
     results of the data collection and analysis will primarily be used to 
     keep ARB program management abreast of developing problems in the 
     system and to brief the Governor when necessary during emergency or 
     crisis situations. 
     Contact: Tom Glaviano  (916) 654-4874

VVI. Compliance Plan Update
     ARB staff provided a brief update on the status of  California Refinery
     Compliance Plans.  Since the quarterly submittals in March, the only
     significant item of change is the unfortunate loss of Pacific Refining 
     and Powerine Oil Company as expected producers of RFG.  The last 
     Quarterly submittals in June indicate that all refiners have obtained 
     most of the required permits and the various modifications necessary to 
     produce RFG are on schedule. 
     Contact: Mike Jaczola  (916) 327-1515

CBG Program Advisory and Subcommittee Activities