California Stations Face Steep Enhanced Vapor Recovery Fines

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California Stations Face Steep Enhanced Vapor Recovery Fines

SACRAMENTO, Calif. -- California's air regulators have eased off threats to close gas stations that didn't meet yesterday's deadline to upgrade pumps to reduce toxic vapors, but compliance costs—about $11,000 per pump—still threatens to put hundreds of stations out of business, according to a report in the Vallejo Times-Herald.

Designed to further prevent gas emissions from entering the atmosphere while drivers fuel up, the mandated equipment is expected to cut the release of 10 tons a day in smog-producing compounds, the report noted. Under last-minute pressure from Gov. Arnold Schwarzenegger, local air officials said no gas stations will be shut down, although fines still will be imposed.

Local air districts may impose daily fines of as much as thousands of dollars, and shut down stations temporarily or permanently depending on levels of compliance. Even without the fines, state officials estimate 5 percent of California's 11,000-13,000 gas stations will close because they cannot afford the upgrades.

Most vulnerable are smaller, independently owned stations that have trouble getting financing in today's lending crisis, the report noted.

"I'm not sure if stations are willing to pay penalties to stay open," Jay McKeeman, of the California Independent Oil Marketers Association, told CSNews Online.

Hosain and Fatemeh Azizian told the newspaper they will spend $70,000 to bring into compliance their Valero station in Vallejo. The Azizians said they closed their Santa Rosa station two weeks ago due to the upgrade costs, and fear they'll ultimately have to close their Vallejo station too.

"I don't know how I'm going to pay," Hosain Azizian said. "The last two years, I borrowed against my house, my business, everything. I'm down to nothing. I'm borrowing against my credit card, my wife's credit card. I have no choice."

The regulation has been on the books since 2000, but many station owners waited until recently because of the expense, and possibly because they expected cheaper equipment to come on the market, said Dimitri Stanich, spokesman for the California Air Resources Board.

"They've been arguing that it's too quick, too costly, and they can't get things that they need," Stanich said. "The regulation is not a surprise to anyone, and they've had plenty of time to comply."

"We're in difficult economic times. Getting loans for this is not as easy as in the past so I sympathize with them," Stanich said. "But we're talking about people's lives. If you know anyone who has asthma or COPD [Chronic Obstructive Pulmonary Disease], they're having a very difficult time on a hot day just living."

But critics say there has been a shortage of equipment, a lack of regulators, long waits for installations, and a spike in prices because of the demand. The costs are expected to be passed onto motorists with a 1 cent-per-gallon increase, according to the report.

As complaints poured in from gas station owners and industry leaders, Gov. Schwarzenegger urged lawmakers to pass a bill by Assemblyman Ira Ruskin, D-Redwood City that would make $8 million in grants available for the upgrades. On Friday, the governor urged the California Air Resources Board to extend the deadline. Republican Sen. Dave Cox is pushing legislation to postpone implementation for a year.

Bay Area Air Quality Management District, charged with enforcing compliance, gets 200 calls a day on the issue, mostly from worried gas station owners, spokeswoman Lisa Fasano said. Brad Harmon of Walnut Creek's First Star Capital said his company has seen a huge spike in gas stations looking for funding after being turned down by banks.

Fasano said Tuesday that fines will range from $400 to $2,500, depending on the station's size and how far along they are in the process.

Although about half of the state's gas stations won't meet the deadline, as of Monday, 80 percent had the needed permits, Stanich said.

Alireza Shahidi, owner of Buskirk Gas Mart and Carwash in Pleasant Hill, said his retrofit would be complete a day before the deadline. He said he's one of the lucky ones. Because his car wash and large convenience store generate cash, he is not reliant on gas sales, and he could get an upgrade loan easier. But because of backlogs, he said he waited six weeks for his permits, and months to get financing and line up overbooked contractors for the job.

"When all is said and done, [the retrofit] will cost me 50 grand. We don't make enough money to drop 50 grand," Shahidi said.

With the economy driving up gas stations' overhead costs, and gas sales dropping, "I know a lot of people who aren't going to make it," he said.

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