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Posted on  

April 5, 2002

Anti-MTBE campaign gets in gear

Despite Gov. Gray Davis's decision to delay banning the polluting fuel additive MTBE until 2004, environmental groups want to shame oil companies into removing the chemical from California gasoline by next winter anyway.

In a letter to international oil giant BP, which owns the Arco retail gasoline chain, 37 environmental and pro-ethanol groups said they are considering a campaign "to inform Californians which companies are supporting MTBE."

Consumers then could choose to buy gasoline from companies that have replaced MTBE with ethanol, a fuel additive made largely from corn.

Amid predictions that gas prices would soar up to $3 a gallon, Davis decided last month to delay banning MTBE (methyl tertiary butyl ether) until the start of 2004.

Nevertheless, two of the state's six large oil refiners -- ChevronTexaco and Shell Oil -- say they are planning to eliminate MTBE at the end of the year if Kinder Morgan Energy, the state's main owner of pipelines and tanker truck terminals, can accommodate the change.

The refineries then would have to replace MTBE with ethanol in much of their gasoline production. Ethanol, would be blended into gasoline at Kinder Morgan's truck-filling stations and stations owned by the refiners themselves.

Phillips Petroleum already has switched from MTBE to ethanol at its Rodeo refinery, but is re-evaluating whether it can continue with the phaseout.

If BP, ChevronTexaco and Shell all commit to the switch, the other oil companies would likely follow, said Brooke Coleman, director of the Renewable Energy Action Project, a coalition of environmental and pro-ethanol groups.

Coleman said he is targeting BP because the United Kingdom-based company touts itself as an environmentally sensitive energy company.

When BP purchased Arco in 1999, the company told Davis that it would try to remove MTBE -- a suspected carcinogen that has polluted water supplies -- from California gasoline one year early.

The company did not accomplish that goal.

"They're talking the talk about environmental protection and social responsibility, but in California they're not walking the walk," Coleman said. "This is an opportunity to show that they're serious about protecting their own consumers."

BP is the largest California user of MTBE, according to California Energy Commission statistics.

Company spokesman Paul Langland said the company is continuing upgrades to its Southern California refinery that will allow it to ultimately eliminate MTBE.

"We support the governor's decision but we're looking at all of our options," said Langland. "To bring disruptions to the California gasoline market is not in anyone's best interest."

Because oil refiners share Kinder Morgan's pipeline system and truck terminals to transport their gasoline, "it's impractical for a single company to act alone in this huge complex distribution system," said ExxonMobil spokeswoman Jeanne Miller.

ExxonMobil did not take a position on delaying the MBTE ban, but said it would continue to upgrade its refinery to eliminate MTBE.

After Davis announced the delay, Kinder Morgan decided to halt all modifications to its terminals that fill up gasoline tanker trucks.

The company is not willing to spend money on the upgrades unless it is sure that it gets a return on its investments, spokesman Rick Rainey said.

"We've seen no clear indication as to which direction they're headed," Rainey said. "As soon as they let us know what their plans are, we're more than willing to respond."

Steve Hall, executive director of the Association of California Water Agencies, said the state should encourage Kinder Morgan and the refiners to eliminate MTBE as soon as possible.

"We think that the best way to solve the logistical problems is to start tackling them," he said.

Valero Energy, which supports the governor's decision, said it may move to ethanol if the rest of California's refiners do so.

"There's just a whole lot of uncertainty in the industry now about what will actually occur," said company spokeswoman Mary Rose Brown. "if everybody moves to ethanol, we may have no choice than to move to ethanol early."

Tesoro Petroleum, which will take over the Golden Eagle refinery near Martinez at the end of April, declined to comment until the refinery acquisition goes through.

Business Writer Alan Zibel can be reached at (925) 416-4805 or azibel@angnewspapers.com.
 

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