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Open Letter to Governor Schwarzenegger to Cut the Gordian Knot on EVR

Bob van der Valk to Governor Arnold Schwarzenegger – Capitol Building – Sacramento, CA

April 1, 2009

Today anywhere from 1000 to 4500 gas station owners will have to make a decision to close down or pay hefty fines to their local air quality management districts. They did not meet the deadline imposed by the California Air Resources Board (CARB) mandate, which requires all service station owners in California to install new enhanced vapor recovery (EVR) nozzles and scrubbers to capture 98% instead of the current 95% gasoline vapor emissions.

A bi-partisan group of California legislators has already called on CARB and you to extend the deadline for compliance by one year to April 1, 2010.

The unfairness in the current CARB edict is that the technology had not yet been refined to meet this newly required standard when the mandate was passed the legislature in 2000. Then those same people decided that by delaying implementation until April 1, 2009 the petroleum equipment industry would eventually solve the problem for them and it would result in finding a solution to meet the stricter requirement.

Major oil companies and other service station owners, with the financial ability to do so, retrofitted their pumps with EVR Phase II nozzles and vapor scrubbers expending about $11,000 per dispenser.

Along with the rush to supply the demand product quality problems have been encountered including shoddy workmanship of the new EVR nozzles. Nozzle spouts can be twisted off by hand and nozzles malfunctioned causing the system to close down. The nozzles and scrubber system are under warranty for one year but after that the station owners are responsible for repairs or replacement of defective parts.

CARB needs to review the concepts of "benefit cost analysis" and "diminishing returns" when these EVR nozzles capture just another additional 3% of the gasoline vapors escaping while filling up our tanks. In this case the costs should also include shutting down businesses and workers losing their jobs.

Governor Schwarzenegger push is now coming to shove and about one-third of the station owners of the over 11,000 stations in California did not comply by the April 1st deadline for one reason or the other. It is estimated by conservative standard that an estimated 1,000 service stations in California will not be able to comply with the mandate at all. This will result in some, including those with major oil company brands, to shut down permanently and not be re-opened.

California Assembly Member Anthony Portantino sent you a letter on February 23, 2009 requesting that you issue an executive order directing CARB to extend the deadline for EVR Phase II compliance deadline date until April 1, 2010. This letter was sent on behalf of the Assemly Member’s constituents including independent service station owners.

That resulted in you belatedly sending regulators and legislative leaders a letter on March 27, 2009 urging a six-to-12-months delay in Enhanced Vapor Recovery (EVR) Phase II enforcement.

You wrote: “I am not writing to argue against the value or soundness of the measure,” to California Air Resources Board (CARB) Chairwoman Mary Nichols. “But I am writing to suggest that more time is needed before it can be successfully enforced without significant negative effects on our state's economy.”

The CARB board, appointed by you, pledged in response to “work closely with the air districts throughout the state to extend the April 1 enhanced vapor recovery enforcement deadline while still striving to meet our collective air quality goals."

Richard Cochrane on his "Conservatively Speaking" blog said that anything short of CARB granting that delay will result in:

• Closure of service stations serving the Inner City: Stations, who cannot meet the deadline, will be forced to shut down - creating a major a void in inner-city communities and resulting in dramatic prices increases at a time when our hardworking families can least afford new costs.

• Loss of revenue for the State and increased unemployment that is already shooting towards 12%: Service station closures will further hurt our struggling economy and aggravate an already dismal budget situation by putting more individuals out of work and reducing critically needed tax revenue - resulting in less money for the State's general fund and ultimately lead to further decreases in badly needed community, health and educational programs.

• Increased blighted areas and increased pollution: Station closures will become community eyesores, set back our efforts to revitalize our inner city community's and most ironically, likely result in increased pollution as individuals drive more to find an open gas station - undermining the original intent of the regulation.

• Hardship on minority owned small businesses: Major oil companies have divested some of their service stations to minority, disabled veterans, women and others individuals over the last several years. Without an extension of the compliance deadline, these small business owners will be financially ruined and their dreams of a better life for their families vanquished.

Governor Schwarzenegger it is time for you to cut this bureaucratically created Gordian knot by issuing an executive order to CARB to delay implementation of the EVR Phase II program. A thorough study should be made about the way this issue has been handled by an intransigent board appointed you and request Chairwoman Mary Nichols’s resignation for her intransigence in dealing with this very important issue.

The solution to avoid this crisis is very simple – issue the executive order extending the deadline by one year and give everyone a chance to catch their collective breaths.

You may contact me at: bvan@4refuel.com or phone (971) 678-2975

Bob van der Valk is the fuel pricing and petroleum industry analyst with 4Refuel LLC in Lynnwood, WA. 4Refuel provides on-site fueling and fuel management systems to businesses and governmental agencies in the State of California.

This letter was submitted to the Governor of California on his official web site at: http://gov.ca.gov/interact