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TIER II--CLEANER CARS AND CLEANER FUELS FOR THE 21ST CENTURY

Release Date: 12/21/99
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CLEANER CARS AND CLEANER FUELS FOR THE 21ST CENTURY
                         December 21, 1999

Today, President Clinton is announcing the next step in providing Americans with cleaner air, cleaner cars, and cleaner gasoline.  The new Environmental Protection Agency standards are designed to reduce harmful air pollution, like smog-causing nitrogen oxides, in flexible and cost-effective ways that give Americans the cleaner air and the consumer choices they desire.

Cleaner Cars.  EPA is issuing tougher tailpipe emissions standards that take effect beginning in 2004 -- the first time both cars and light-duty trucks are subject to the same national pollution control system.  The new standard is 0.07 grams per mile (gpm) for nitrogen oxides, a 77 percent reduction for cars and up to a 95 percent reduction for trucks and sport utility vehicles (SUVs). Vehicles under 6,000 pounds will be phased in between 2004 to 2007, and passenger vehicles weighing from 6,000 to 10,000 pounds will be phased in through 2009.  Current standards range from 0.6 gpm for cars to 4 grams per brake horse power hour (g/bhp-hr) for the heaviest SUVs and vans.  Estimated costs are, on average, less than $100 per car and $200 per SUV.

Cleaner Gasoline.  For the first time, EPA is addressing tailpipe emissions and gasoline as a single system to achieve cleaner air efficiently and cost effectively.  Sulfur in gasoline impedes the effectiveness of catalytic converters -- the devices that reduce pollution from tailpipes. The new rule requires the nation's gasoline suppliers to meet an average sulfur level of 30 parts per million (ppm) by 2005, down from the current average of nearly 300 ppm.   Small refiners have additional time and flexibility to meet the sulfur standards. EPA estimates the cost at just under two cents a gallon, or about $12 dollars per year per car.

Maximum Flexibility. To ensure that the automobile and oil industries meet the new standards
cost-effectively, the rule includes several flexibility mechanisms:

   ∑    Averaging:  Auto makers and refiners can meet the final standards by averaging to allow
   maximum cost-effectiveness.  For example, auto makers can manufacture vehicles that meet a
   range of emission limits, not to exceed 0.2 gpm, as long as the average nitrogen oxide
   emissions of the entire fleet remain at 0.07 gpm,.  The nation's refiners and importers of
   gasoline will have the flexibility to manufacture gasoline within a range of sulfur levels as long
   as the annual average is 30 parts per million (ppm).  Starting in 2006, the maximum amount of
   sulfur in most gasoline can not exceed 80 ppm.

   ∑    Phase-In:  Beginning in 2004, 25 percent of lighter vehicles will be required to meet the new
   0.07 gpm standard each year until the phase-in is completed in 2007.  Larger passenger
   vehicles, from 6,000 to 10,000 pounds, will also be phased in to meet stricter standards
   beginning in 2004 until completed in 2009.   Most refiners will have until 2006 to meet the new
   sulfur standard; small refiners meeting certain criteria will have an additional two years. Interim
   standards will apply to gasoline in the Rocky Mountain states and Alaska through 2006.

   ∑    Credit for Early Action: The new rule allows companies to gain credits for early pollution
   reductions. As early as 2001, auto manufacturers can obtain credits for later use for vehicles
   produced at or below the 0.07 gpm standard. Refiners and importers of gasoline also will be
   allowed to generate, bank, and trade sulfur credits for use in a later year or to sell to another
   refiner.  The result of these market mechanisms is reduced costs to industry and cleaner air
   faster for the American people.