U.S. Facing Dilemma Over Super-Clean Gas

The U.S. government is in a policy tangle over the upcoming launch of its new super-clean gasoline in about one-third of the nation, and the uncertainty is stoking oil prices. California is not involved in the June 1 roll-out of the new reformulated fuel because it has sold its own version of the cleaner gas since 1996. The government now faces a decision on whether to run the political risk of high gasoline prices this summer or to infuriate U.S. refiners, who have spent billions of dollars preparing for the new rules, by letting some areas opt out. Coinciding with concerns about meeting the peak summer demand are worries that U.S. refiners will not be able to make enough of the cleaner-burning fuel. The EPA has already issued a temporary waiver to supply-starved St. Louis, with more possible. The American Petroleum Institute told the U.S. Energy Department and the EPA that high gas prices do not justify waivers of the new rules. Supply uncertainty has deepened as the threat of royalty payments to Unocal Corp. for the patent it holds on the cleaner gasoline makes refiners wary of producing it.