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Arco Parent Pledges Early MBTE End

November 12, 1999

SACRAMENTO (AP) _ BP Amoco’s chief executive pledged Thursday that gasoline prices at Arco stations will remain lower than competitors’ in most California markets when Arco is taken over by the British petroleum giant.

Sir John Browne also said he would work to ensure that Atlantic Richfield Co. beats by one year a December 2002 state deadline to phase out MTBE, a fuel additive that cuts air pollution but taints groundwater.

BP Amoco announced April 1 that it was buying Arco, which has a strong presence in California. BP has virtually no gas stations in California, and Amoco has none.

If the sale receives regulatory approval, BP Amoco would continue to sell gasoline under the Arco brand name.

Browne’s promises followed a meeting in London last month with Gov. Gray Davis, who pressed Browne on a variety of issues. At the time, Browne was noncommittal on MTBE.

A few days later, Browne sent Davis letters promising to increase charitable giving and accelerate the phase-out of MTBE, and Browne and Davis met in the governor’s office Wednesday to cement the agreements.

``These are performance commitments that we have to meet, so you will see us doing that,″ Browne said after the meeting.

Davis said he would monitor the company’s progress.

``I’ve lived long enough to know that people can talk a good game and I’m into results, I’m into accountability, so I’ll be watching closely to make sure that BP-Arco _ assuming the merger is approved _ honors its commitments,″ he said in his office, sitting next to Browne.

``Having said that, Sir John has a very good reputation as running a cutting-edge company with a strong environmental bias,″ Davis added.

Russell Long, a spokesman for the San Francisco-based environmental group Blue Water Network, lauded Browne’s announcement.

``I think this is a very positive development because it will be extremely beneficial for protecting water supplies in California. We hope other petroleum companies will match BP Amoco’s commitment,″ he said.

Browne acknowledged that he wasn’t certain what the company would use to replace MTBE. Ethanol is the likely choice, he said.

Currently, up to 20 percent of Arco gas sold in California is MTBE-free, depending on the availability of ethanol, said Tom Markin, an Arco spokesman.

Arco is known for low prices at the pump, and Browne said that won’t change.

Browne told Davis that when Arco attempted to raise pump prices in the past, customers fled.

``It’s a winning formula to be the price leader in California, and that’s a formula that we want to adopt,″ Browne said, adding that Arco’s pump prices would remain lowest in most markets.

Arco’s sale will mean the elimination of about 600 jobs at its downtown Los Angeles headquarters, Browne said.

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