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    Fed EPA Still Mulling CA-Requested Gasoline Waiver

    (June 1, 2004) -- Reuters News (to which links with permission) has reported that the federal Environmental Protection Agency is mulling a request (reported by in April) made by CA Governor Arnold Schwarzenegger for exemption from certain federal clean air rules for making gasoline...that the Governor says could help moderate price spikes, increase refiners' flexibility in producing gasoline and improve air quality.

    Reuters' report is at: EPA Still Mulling Calif., N.Y. Gasoline Waivers.

    On April 6, reported that Governor Schwarzenegger had sent the following letter to EPA Administrator Michael O. Leavitt:

    [begin text]

    The Honorable Michael O. Leavitt
    U.S. Environmental Protection Agency
    Washington, DC

    Dear Mr. Leavitt,

    I am heartened by the April 1, 2004, testimony of Energy Secretary Spencer Abraham before the House Energy and Commerce Committee, in which he stated that the Administration is seriously considering California's request for a waiver of the oxygen mandate in the federal reformulated gasoline (RFG) regulations. As you know, California has been seeking the waiver since 1999, and on February 2, 2004, the California Environmental Protection Agency sent you compelling additional analyses demonstrating the basis for an immediate waiver.

    Under the Clean Air Act, California qualifies for a waiver because the state has demonstrated that the oxygen mandate prevents or interferes with the attainment of the national ambient air quality standards for particulate matter and ozone. Even beyond the air quality benefits, a waiver can play an important role in moderating the gasoline price spikes that have been experienced recently in California. The waiver will increase refiners' flexibility in producing gasoline, enabling them to change gasoline formulations as needed to respond to changes in supply and market conditions. This can be particularly important as we approach the summer driving season.

    What is so important about the waiver is that it presents an all too rare win-win situation. It will improve California's air quality at the same time it moderates gasoline prices. The justification for a waiver is so strong that I believe the serious consideration your agency is now giving our request will necessarily lead to a grant of the waiver. I trust that it will come soon enough that it can have an impact on our current gasoline price situation.


    Arnold Schwarzenegger

    Further to follow as news develops.

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