Chevron to Eliminate MTBE From Its California Cleaner-Burning Gasoline in Southern California

MTBE Phaseout to Be Completed Statewide by Governor's Deadline

Chevron U.S.A. Inc., a subsidiary of ChevronTexaco Corp., announced that beginning this month, it will take another major step towards eliminating methyl tertiary-butyl ether, or MTBE, from all Chevron-branded gasoline sold in California.

Starting with the Southern California market in January 2003 and in a changeover that will be completed by May, Chevron will offer the third generation of California Cleaner-Burning Gasoline, which uses ethanol as an oxygenate instead of MTBE. Chevron will complete its statewide phase-out of MTBE in compliance with the December 2003 deadline established by California Governor Gray Davis.

"Our customers have told us they want MTBE out of gasoline, and we have been moving forward diligently and carefully with plans to eliminate MTBE from gasoline in California," said Dave Reeves, president of North America Products, a refining and marketing division of Chevron U.S.A. Inc.

To meet the regulatory requirement that oxygen be added to gasoline, Chevron made the substantial infrastructure changes needed to replace MTBE with ethanol in Southern California. Starting in 2004, ethanol is the only approved oxygenate for California Cleaner Burning Gasoline.

"We've made good progress with meeting the many difficult logistical, technical and permitting challenges that must be overcome to remove MTBE statewide," said Reeves. "We began in 1997 by making non-oxygenated gasoline at our Richmond refinery in Northern California, where we recently produced our four billionth gallon of cleaner-burning gasoline without adding MTBE or any other oxygenate. We're taking this important step in Southern California now and will complete the transition to gasoline without MTBE in Northern California later this year. In the meantime," he continued, "we remain focused on supplying our customers with gasoline in a competitive and reliable manner."

Chevron's cleaner-burning gasoline with ethanol will have more of the air quality benefits of today's gasoline, but without the water pollution concerns attributed to MTBE.

In the United States, Chevron markets gasoline, diesel fuel and other petroleum products. With six petroleum refineries and 8,200 Chevron branded retail outlets, it serves customers in 28 states, primarily in the West, Southwest and South and in the District of Columbia. In California, the company has 18 percent of the retail market share and two refineries -- El Segundo refinery (260,000 bpd) and Richmond refinery (225, 000 bpd).

Chevron U.S.A., Inc.

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