California, New York Retailers Await EPA Decision

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California, New York Retailers Await EPA Decision

By Alex Laracy - 05/05/2004
NEW YORK -- As the Environmental Protection Agency bides its time deciding upon California and New York's request for temporary exemptions from cleaner-burning summer gasoline standards, local retailers are wary of their chances of approval, and unsure whether the exemption would make a significant difference even if it were approved.

"Previous requests of a similar nature have been denied by the EPA, so I don't foresee a major shift in policy," Jim Calvin, president of the Albany-based New York Association of Convenience Stores told CS News. "But I guess we'll have to wait and see."

The two states claim the EPA's tough requirements permit fewer refiners to make the fuel, which makes gasoline more expensive. The EPA requires the two states to sell gasoline blended with ethanol or another additive that raises its oxygen content, making the fuel burn more cleanly with less exhaust fumes.

Granting the waivers would allow additional gasoline supplies, including imports, into the California and New York markets, which could possibly lead to lower pump prices.

"It would be better for my business if the prices dropped, but it's been affecting the consumer more than the retailer," said Mike Ali, president of Benicia, Calif.-based Fast & Easy Mart. "I support the EPA, but at the same time we have to consider that if the prices continue to rise, it'll be bad for the whole state economy. But my gut feeling is that we will be granted the request."

Service stations have to switch over to the cleaner-burning fuel, mostly with ethanol, by June 1. With U.S. retail gasoline prices now at record highs, there are concerns that prices could climb further as the two large fuel-consuming states switch to the special grade for the summer.

"Using ethanol is probably a pretty good idea because it helps reduce the gas consumption a little bit," John Buford, president of Hanford, Calif.-based Buford Oil Co., told CS News. "Whether or not this would make the refinery shortage problem any worse, it is hard to say."

Walter Dwelle, vice president of Auburn, Calif.-based Nella Oil Co., thinks the exemption would have little to no effect on the shortage problem.

"Basically the ethanol adds 5.7 percent to the gasoline supply pool, and we're so light on product right now, I think if they took away the requirement I don't think any of the refiners would change," said Dwelle. "The refiners I've spoken to have said it would not, because they just need the supply. I really don't think it'll make a lick of difference for us retailers either way."