Yearning To

By John Greenwald

Over the years, California has given the rest of the country everything from health food to a taxpayers' revolt. Now it has bequeathed another far-reaching legacy to its sister states: a clampdown on auto-emission standards that could help transform the American car and the fuel that makes it run. To the discomfort of U.S. automakers, a House Energy and Commerce subcommittee voted unanimously last week to adopt California's strict limits for the 1990s as the law of the land. The measure, which seemed certain to win House approval, would cut existing levels of tail-pipe pollutants as much as 60% from 1994 to 1996 and could phase out much of the remainder by 2006. The Senate is considering an even stronger bill.

The House proposal brought a swift protest from U.S. carmakers, who contended that the clean-air standards would raise car prices and strain technical resources. The companies argued that auto exhaust is already 96% cleaner than it was before pollution-control measures were introduced two decades ago. Noting that the House limits would be tougher than those President Bush put forward in his clean-air package last summer, General Motors President Robert Stempel asserted, "For our business it would be extremely tough. It went further than the President proposed, and we're deciding how to handle it."

As predictable as the grumbling from Detroit was the calm reaction in Japan, whose share of the U.S. market has climbed from 15% in 1979 to 25% today. "It's not that tough technologically, but we'll need some lead time," said a Japanese auto-company official. He added that the new standards would raise sticker prices "only marginally" because Japanese firms typically rely on thinner profit margins than their U.S. counterparts.

The House vote marked a truce between feuding Democrats John Dingell of Michigan, a dogged opponent of auto regulation, and California's Henry Waxman, a champion of even stricter standards for clean air. The compromise proposal would cut emissions of nonmethane hydrocarbons, a key ingredient in smog, which can now average no more than 0.41 gram per mile for a carmaker's fleet. The House action would place a limit of 0.25 gram per mile on all cars by 1996; the output of nitrogen oxide, another source of smog, would be required to fall from 1 gram per mile to 0.4 gram. Unless the Environmental Protection Agency ruled otherwise, automakers would then be ordered to slash the reduced levels in half by 2006.

Car companies could meet such standards by upgrading their current pollution controls rather than developing expensive new systems. For example, the bill would require that catalytic converters, now guaranteed to be effective for 50,000 miles, be beefed up to last 100,000 miles. Other alterations would range from adding a microchip to monitor a car's pollution controls to expanding a charcoal canister that catches evaporating gasoline fumes when a car's engine is off. The EPA estimates that such improvements could raise car prices as much as $200 by 1996 and $500 more by 2006.

Although Detroit railed against the proposed standards, the fact is that some cars already meet or exceed part of the requirements. Reason: automakers have complied since 1983 with California's pollution laws, which are the strictest in the U.S. and will become even tighter in the 1990s, when they are to serve as models for the rest of the country. Such 1989 cars as the South Korean-built Pontiac LeMans and Japan's Nissan Maxima emit less than 0.2 gram of nitrogen oxide per mile. At the same time, Chrysler sells its California dealers a $100 pump that helps cars meet restrictions by recirculating exhaust through the engine and catalytic converter to reduce toxic emissions.

Nonetheless, U.S. automakers insist that California standards would become burdensome if adopted nationwide. GM's Stempel argued that the stricter requirements would raise car prices in regions that are free of smog. Declared a Chrysler spokesman: "If you lived in Resume Speed, N. Dak., you would be paying for a piece of equipment that you simply did not need to keep your air clean."

A clampdown could create conflict between automakers and the oil industry, as each side seeks to pass responsibility for meeting the standards on to the other. "The carmakers want to say 'reformulate the gasoline,' " says William Randol, an oil-industry analyst for First Boston. "But who will make the investment to do this?" He noted that Shell Oil has estimated that it would cost billions of dollars to develop new clean-burning gasolines.

Oil companies may have little choice. While the House subcommittee did not take up the question of alternative fuels last week, it is expected to do so this month. On the table is a White House proposal that would require automakers to start selling cars that run on gasoline substitutes by 1995. Car companies would be told to produce 500,000 such vehicles the first year and 1 million units a year beginning in 1997. Among possible substitutes: methanol, a high-octane alcohol derived from wood; ethanol, or "gasohol," a blend of gasoline and grain alcohol; and compressed natural gas.

So far, most oil companies have seemed more eager to denounce the alternative fuels than to develop new products. Mobil has run ads attacking methanol as polluting, expensive and more dangerous than gasoline if accidentally swallowed. Although the fuel produces far fewer smog ingredients than gasoline, it releases more formaldehyde, a suspected cause of cancer. Cars would get less mileage from methanol because it burns faster than gasoline. Yet Indianapolis 500 racers have used methanol for years because it boosts horsepower and is less flammable in accidents; U.S. automakers have developed experimental cars that run on both methanol and gasoline.

Other alternative fuels are gaining popularity around the world. In smog- choked Sao Paulo, Brazilian drivers tank up with an ethanol blend that is 78% gasoline and 22% alcohol distilled from sugarcane. According to Illinois- based Archer Daniels Midland, ethanol blends account for 8% of all U.S. motor fuel. The mixture is readily available in parts of the Midwest at stations that display the gasohol symbol, an ear of corn.

To the north, more than 20,000 Canadian vehicles are powered by compressed natural gas, which virtually eliminates the sources of smog. The relatively low price of the fuel -- some 80 cents per gal., vs. $1.75 for gasoline -- tempts bus and taxi owners to pay the $2,500 that it costs to convert a vehicle to natural gas. In Washington the American Gas Association calls the fuel "a viable option for fleets." One drawback: to carry the gas, vehicles must be fitted with bulky tanks. In a cross-border experiment, Canada's Ontario Bus Industries and Brooklyn Union Gas are testing two gas-fueled buses in Brooklyn, N.Y.

U.S. oil companies have been slow to respond to such initiatives. Atlantic Richfield was the first in Southern California; last summer it introduced a clean-burning unleaded gasoline designed to power older vehicles built to use leaded fuel. The Los Angeles-based company said the new brand, Emission Control-1, has been favorably -- if not overwhelmingly -- received since it replaced Arco's leaded gas last month. Edward Reilly, senior vice president for marketing, said EC-1 sales were slightly ahead of previous levels for leaded gas, although the two fuels cost the same.

Ironically, some California air-quality officials have raised strong objections to last week's House vote. They complain that a fine-print , provision in the federal action would end California's right to impose even tougher standards on off-road vehicles such as lawn mowers, dune buggies and construction equipment, which account for an estimated 16% of the state's smog. Says a spokesman for the California Air Resources Board: "While the bill applauds California's leadership, it ties our hands to control pollution in our own backyard."

Ultimately, the fate of the proposed federal standards depends on the public's concern over the air people breathe. Even corporate giants recognize that they can no longer simply dig in their heels and resist demands for clean air. Chrysler vice chairman Gerald Greenwald noted in August that automakers had hurt their credibility by stubbornly opposing most new regulations. And while GM's Stempel attacked the House vote last week, he acknowledged that the subcommittee had at least cleared up confusion over what the new tail-pipe standards would be. For all its past intransigence, Detroit may be ready to concede that compromise is a two-way street.

CHART: NOT AVAILABLE

CREDIT: TIME Diagram by Joe Lertola

CAPTION: THE CLEANER CAR OF THE '90S

With reporting by Glenn Garelik/Washington and Joe Szczesny/Detroit