The van der Valk Gas Price Advisory for 4-3-09

Gas Station Owners Delt Blow on CARB's Enhanced Vapor Recovery Phase II Rules

This advisory calls for the Governor to ask for the resignation of Mary Nichols, Chairwoman of the California Air Resources Board, for her intransingence in dealing with the current EVR Phase II debacle, which is threatening to permanently close at least 10% of the California gas stations.

I sent the email below to John Myers, commentator for PBS radio stations in California, after hearing his pod cast this morning. I was listening to his broadcast in which he discussed the actions taken by CARB in an attempt to tone down the rhetoric created by station owners talking to the media about the predicament in which they have found themselves.

Most of the service stations owners are willing to comply with the regulation but have been unable to obtain the financing in time. Subsequently the equipment needed is now on back order and installers have been also been backed up with installation requests. The owners are now being written up with orders of violation that includes fines or worse yet being shut down by their local air management districts.

JMyers@kqed.org
Sent: 4/3/2009 12:11:05 P.M. Pacific Daylight Time
Subj: CARB Enhanced Vapor Recovery Phase II - Open Letter to Gov. Schwarzenegger

John:

I have been keeping updated with happenings in Sacramento on your Capitol Notes web site and have listened to your pod casts as well. During your discussions about this subject it was mentioned that non-compliance, with the EVR Phase II CARB imposed deadline, would be treated like a jaywalking ticket in New York City.

Instead the experience station owners are encountering is more like a cop handing out a ticket after someone goes through a red light. The violator is then told to take it to the judge if he wants to argue about whether the light was still green or orange when the car went through the intersection.

Some California air management districts will also see this as an opportunity to cull the herd of their miscreants by using selective enforcement on those who dare to protest their treatment.

CARB Chairwoman Mary Nichols that she would urge the use of restraint in enforcement by the Air Quality Management District in her April 1, 2009 press release. That CARB press release was issued by Dimitri Stanich apparently in response to last Friday's letter from Governor Shchwarzenegger to Mary Nichols seeking her to delay the EVR Phase II implementations date.

On April 2, 2009 the Ventura County Air District enforcement personnel did not use any restraint in their approach on enforcing the new regulation. They were out in force issuing misdemeanor orders of violation to station owners not yet fully in compliant with the EVR Phase II program.

The station owners were asked to sign an agreement with a date certain by which they would be compliant or face having the County close down their station in 10 business days. Personnel in that district have apparently not made aware or told to use restraint in their enforcement.

Two stations in Ventura County cited are independently branded and owned by my brother Andre van der Valk. Andre also leases two stations from Shell in the San Fernando Valley that are in compliance. In addition he owns a 76 station in Santa Monica that is not yet in compliance. He has all intentions to be and keep compliant at all of his stations.

The system installed at his two Shell stations since August last year is having numerous maintenance issues with breakdowns of the new nozzles and the scrubber system installed on the underground tanks. He is under warranty for one-year on the EVR Phase II equipment but becomes responsible for their upkeep after August 2009. The problem he is encountering is with replacement parts that are on back-order with the manufacturer for as much as six weeks leaving dispensers out of service for that duration.

I hope this information will assist you in getting a better picture of what is actually happening on the ground. Please feel free to contact either myself or Andre at jalidat@aol.com phone number (818) 970-9037 about this very important issue for the service station business community.

Below is my letter to Governor Schwarzenegger beseeching him to take immediate action.

Thanks,

Bob van der Valk
(971) 678-2975
tridemoil@aol.com

From: Tridem OilTo: governor@governor.ca.govSubject: Open Letter to Governor Schwarzenegger - EVR Phase II CARB Mandate

April 1, 2009 - 7:00 AM PST

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

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, April 1, 2009.

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."

On March 12, 2009 Senator Roderick Wright wrote in his letter to you that the result of this action will be that minority and inner city areas will be especially hit hard. Specifically:

· 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
Letter from State Senator Roderick Wright to Governor Schwarzenegger:

CAPITOL OFFICE -STATE CAPITOL, ROOM 5064SACRAMENTO, CA 95814(916) 651-4025FAX (916) 445-3712DISTRICT OFFICEONE MANCHESTER BLVD., SUITE 600INGLEWOOD, CA 90301(310) 412-0393FAX (310) 412-0996E-mail:senator.wrightl@sen.ca.govwww.sen.ca.gov/wrightCalifornia State SenateSENATORRODERICK D. WRIGHTTWENTY-FIFTH SENATE DISTRICTRepresenting the Communities of Alondra Park, Athens, Compton,Gardena, Florence-Graham, Hawthorne, Inglewood, Ladera Heights,Lawndale, Long Beach, Los Angeles, Palos Verdes Peninsula, SanPedro, Watts, Westchester, Westmont, and WillowbrookGOVERNMENTAL ORGANIZATION CHAIRBUDGET & FISCAL REVIEWBUDGET SUBCOMMITTEE #4on State Administration, General Government and CorrectionsENERGY, UTILITIES AND COMMUNICATIONSPUBLIC SAFETY SELECT COMMITTEES:CALIFONRIA’S WINE INDUSTRYCALIFORNIA’S HORSE RACINGINDUSTRY - CHAIREARTHQUAKE AND DISASTER PREPAREDNESSJOINT COMMITTEE ON RULES

March 12, 2009

The Honorable Arnold SchwarzeneggerGovernor, State of CaliforniaState CapitolSacramento, CA 95814

Dear Governor Schwarzenegger:

The California Legislative Black Caucus represents and advocates for the interests of Black people throughout California. Among our many valued and principled objectives is our commitment to reducing inequities and creating employment opportunities and economic security for African Americans. It is for that reason that we are writing to you to share our serious concerns about a pending regulation by the California Air Resources Board (CARB) that we believe could have major impacts on inner-city and minority communities.

The issue involves the looming enforcement by the CARB of the Enhanced Vapor Recovery Systems (EVR). It is our understanding that several years ago CARB adopted regulations requiring gas stations to install EVR upgrades by April 1, 2009 to help reduce air pollution levels – a goal we strongly support. However, our concern lies with that fact that due to major bureaucratic delays by CARB in approving products for use by station owners, coupled with extremely high fees and onerous regulations by local jurisdictions. Only 1 in 5 stations have to date been able to install these systems. With just 30 days until the enforcement deadline, more than 78% of California’s 11,000 gas stations will not be able to meet the standard and will be forced to shut down.

The result of this action will be that minority and inner city areas will be especially hit hard. Specifically:\
-Closure of Service Stations Serving Inner City: Stations that cannot meet the deadline will be forced toshut down – creating a major a void in inner-city communities and resulting in dramatic prices increases ata time when our hardworking families can least afford new costs.
-Loss of Revenue for the State and increased unemployment: Service station closures will further hurt ourstruggling economy and aggravate an already dismal budget situation by putting more individuals out ofwork and reducing critically needed tax revenue. This would result in less money for the State GeneralFund and ultimately lead to further decreases in badly needed community, health and educationalprograms.
-Increased blighted areas and increased pollution: Station closures will become community eyesores, setback our efforts to revitalize our inner city communities. Most ironically, it will also result in increasedpollution as individuals drive further to find an open gas station – undermining the original intent of theregulation.
-Hardship on Minority Owned Small Businesses: Major oil companies have divested most of their servicestations 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.

It is for all these reasons why we are respectfully requesting that you intervene on this critical issue.Specifically we request that you direct CARB to allow for a two year extension of the EVR installation mandate.

This request is consistent with Senate Bill 155 (Cox), which you signed. SB 155 granted rural gas stations a two year extension, postponing enforcement of EVR until April 1, 2011. Your support would allow urban gas stations the same consideration given to rural gas stations. Urban station owners should also have until April 1, 2011 to make these necessary upgrades. Without an extension thousands of stations going out of business resulting in major impacts to communities that can least afford to deal with all of the negative consequences.

Sincerely,

Senator Roderick D. Wright

CC: Members of the Senate and Assembly Black Caucus,Ms. Susan Kennedy, Chief of Staff to Governor Arnold Schwarzenegger, Ms. Mary Nichols, Chairwoman of the California Air Resources Board, Honorable Gil Cedillo, Chair of the Latino Caucus, Honorable Tony Mendoza, Vice-Chair of the Latino Caucus