press release

Chevron Press Release - Chevron Applies For Variance To Sell Conventional Gasoline In California

SAN FRANCISCO, July 13, 1999 -- Chevron today applied for permission from California officials to temporarily sell conventional gasoline in the state to avoid a supply pinch associated with lower production at the company' s Richmond Refinery.

"Industry inventories of California cleaner-burning gasoline are at a very low point and are unavailable immediately from other sources, so it's necessary to purchase conventional gasoline to tide us over the next three to four weeks," said Patricia Woertz, president of Chevron Products Co., which manages Chevron's U.S. refining and marketing network.

"Bringing in the conventional gasoline normally sold in adjacent states will do a lot to help minimize any potential for supply disruptions, and greater supplies should also lessen the price increases one might expect if a large supply shortfall occurred," she said.

"We apologize to our customers and the people of California for this inconvenience," Woertz added.

Conventional gasoline is in greater supply because it is sold in most other states, while California gasoline must meet unique guidelines set by the California Air Resources Board (CARB).

Chevron asked CARB today for a variance to allow sale of up to 3.5 million barrels (147 million gallons) of conventional gasoline for a maximum of 45 days. CARB is expected to hold a public hearing to consider the variance. If granted, the variance would require Chevron to pay a penalty of 15 cents a gallon, amounting to about $22 million if all gallons are sold.

Gasoline production at the Richmond Refinery was reduced over the weekend because of damage to a key gasoline-making unit. No injuries occurred, and the impact was imperceptible outside the refinery. However, the refinery was already operating at a reduced rate due to damage from a March incident.

The facility typically refines 240,000 barrels of crude oil a day, of which about half becomes gasoline. Production of gasoline has been reduced by about 70 percent.

Updated: July 1999