press release

Chevron Press Release - Chevron Says U.S. Fuels Policies Overlook Needs Of Customers

SAN FRANCISCO, March 23, 1995 -- Chevron's top refining and marketing executive today called the nation's vehicle fuels policies a "tangle of compromises, special-interest agendas and misguided philosophies" which have overlooked the needs of the driving public.

David J. O'Reilly, president of Chevron U.S.A. Products Company, also called for changing the oxygenate rule in federal reformulated gasoline (RFG), citing consumer concerns, unnecessary costs, questionable benefits and public doubts about the new fuel.

"Instead of being perceived as a friend to the public, this new fuel is now a suspicious character," O'Reilly told the World Conference on Reformulated Fuels and Refinery Processing here.

O'Reilly defended reformulated gasoline in general, noting that improved blends in recent years have effectively addressed certain air quality and health concerns. He endorsed the use of oxygenates in gasoline to enhance octane, and in colder months, to reduce winter carbon monoxide emissions in dozens of cities.

But he criticized the federal RFG rule which requires high percentages of oxygenates year-round. Because oxygenates have undermined consumer confidence in gasoline as a future fuel, he said, "My most important product is suffering a bad case of guilt by association."

In a wide-ranging speech, O'Reilly reviewed federal fuels policies, saying that all parties involved in the processes of making these policies "forgot about the customers, the driving public . . . or to be more honest, we left them out."

"We should refocus on customers and take a hard, fresh look at our policies," said O'Reilly. "And we should keep the parts that really provide value and get rid of the parts that don't."

He called for emphasizing the best gasoline reformulations, such as low-evaporation blends or winter oxygenates; phasing-out ethanol subsidies and refusing to allow government to mandate the use of ethanol in reformulated fuels; finding the best ways to make vehicle inspection and maintenance more customer-friendly; eliminating programs which "force" alternative fuels and vehicles -- such as electric cars -- onto the market before they're ready to compete; and making sure all fuels policies are clearly based in good science and cost-benefit standards.

Regarding oxygenates, O'Reilly noted that they cost extra and reduce fuel economy. But worse, he said, is that they play almost no role in the primary goal of the federal RFG program: reducing summer ozone.

The federal RFG formula attacks ozone, he said, by requiring lower-evaporation blends which reduce emissions of hydrocarbons, one of the primary elements (along with oxides of nitrogen and sunlight) in the formation of ozone.

Many cities, O'Reilly noted, have opted for low-evaporation gasoline -- instead of federal RFG -- as a more cost-effective approach to improving air quality.

O'Reilly acknowledged that many areas using federal RFG have not seen widespread customer complaints about oxygenates. But he told the fuels conference, "These customers apparently don't realize that they're paying for something which -- for most of the year -- contributes nothing to meeting clean air standards. I don't know how any of us could be proud of that."

"Unfortunately, some highly creative promotional efforts have convinced the public and a lot of government officials that oxygenates are the primary reason reformulated gasoline is cleaner," said O'Reilly.

"I hope we can correct that misunderstanding, because the real legacy of the year-round oxygenate rule is something else: wasted investments in infrastructure; unproductive added costs at the pump; reduced fuel economy; reputation problems for all reformulated gasolines; and dissatisfied customers."

O'Reilly acknowledged that changing the year-round oxygenate rule would require reopening the federal Clean Air Act.

"I know a lot of people think that if we reopen the Clean Air Act, we'll end up with an even more difficult law," he said. "Others worry that the new Congress will gut' the act."

"But I don't think we should be afraid to improve the established laws. The time to start is now, and this time, let's keep all the needs and expectations of the driving public -- our customers -- uppermost in our minds."

Updated: March 1995