ExxonMobil to Phase Out MTBE

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ExxonMobil to Phase Out MTBE

SAN FRANCISCO -- In a move that could result in price spikes and gasoline shortages Exxon Mobil Corp., operator of more than 5,000 convenience stores, became the latest major refiner in California to set an early date for phasing out a fuel additive that has contaminated groundwater.

The Irving, Texas-based company, which maintains a branded network of some 4,000 c-stores in California, said it would phase out MTBE and convert to ethanol by early 2003, nearly a year ahead of a deadline set by California Gov. Gray Davis in March.

In 1999, Davis banned MTBE after the suspected carcinogen was discovered contaminating groundwater supplies. Federal law requires that gasoline sold in the smoggiest regions in the country include one of the two additives to help gasoline burn cleaner, according to the Associated Press.

In March, citing fears of possible supply disruptions and resulting price spikes, Davis postponed his original phaseout deadline by one year to Dec. 31, 2003.

Earlier this year, major refiners BP plc and Shell Oil Co. said they would switch additives ahead of Davis's mandated Dec. 31 cutoff. With ExxonMobil's switch, more than half the state's gasoline will be affected, the report said.

With a daily consumption of 1 million barrels a day, California is the largest gasoline market in the United States.