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California Gas Stations Threatened By Vapor Recovery Regulation

By Barbara Grondin Francella

SACRAMENTO, Calif. -- Gasoline marketers are hoping the California Air Resources Board will delay enforcement of the April 1, deadline requiring gas station owners to install enhanced vapory recovery equipment, after Gov. Schwarzenegger asked Friday for a six- to 12-month delay.

The mandate requires gasoline retailers to install equipment to capture 98 percent of vapor emissions, instead of the current 95 percent. Non-compliant retailers could face fines "in the thousands of dollars per day," according to Jay McKeeman, vice president of government relations and communications for the California Independent Oil Marketers Association. "This could be very severe for the state's gasoline [industry]."

One-third to one-half of the state's 13,000 gas stations are in danger of closing, McKeeman told CSNews Online. At press time, CARB had not answered the governor's request.

"The equipment upgrades called for in this regulation require a significant investment by small station owners," the governor wrote, after first reiterating his strong support for CARB's efforts to "face California's very real climate and air pollution challenges head-on."

Upgrades to the station's dispensers and vent lines would cost approximately $11,000 per dispenser. But "once you get into it and add permitting expenses, it is easily $50,000 to $80,000 per service station," McKeeman said.

In urging a delay, the governor cited the difficulty of obtaining financing in this tough economic climate and CARB's certifying some of the most coast-effective equipment available only six months ago.

"Local Air Quality Districts are threatening to impose daily and monthly fines in the tens of thousands of dollars for non-compliance," Gov. Schwarzenegger noted. "Even CARB's best estimates indicate as many as 50 percent of the stations in California will be unable to comply with the new regulations by April 1."

Though the regulation was passed in 2000, equipment that would let gas operators meet the requirements was not certified until 2005, McKeeman noted. Still, that equipment met the needs of only 10 percent of the stations in the state, he said.

"Not until 2007 was a work-around approved, but even that meant retailers had to rip pumps part and put in whole different vapor capture system that was very expensive," he told CSNews Online. "The system that applied to most of the service stations in the state was not approved until December 2008."

In August 2007, CIOMA asked CARB for a two-year delay and was refused. "CARB dragged their feet since then," he said. "This is a bureaucracy out of control—and you can quote me on that."

CIOMA then asked for an enforcement holiday for operators making a good faith effort to get the equipment installed. "But part of getting any leniency on enforcement requires operators to have the equipment purchased and contractors in place by this Wednesday," McKeeman said. "If someone can't get financing, they can't meet that requirement. We believe fully one-third of the stations are unable to meet the deadline or apply for an alternative compliance measure, whereby operators must have the equipment and contractors lined up and stick to a submitted plan."

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