Unocal Corp. appears to be stockpiling government-issued airborne emissions credits, as the company prepares to sell its Southern California oil refinery facilities to Tosco Corp.
The credits, which Unocal is buying up under the Regional Clean Air Incentive Market (Reclaim) program, would presumably be sold to Tosco as an important piece of the deal.
Under the Reclaim program, which is sponsored by the South Coast Air Quality Management District, 330 Southern California companies receive a fixed number of pollution credits each year, based on the size of their operations. All companies that emit more than four tons of pollutants each year must participate in the program.
Companies that pollute less than their quota can sell off their unused credits to companies that wish to exceed their allotment.
The program was designed to combine environmental protection with market-based incentives, enabling less-polluting companies to cash in, and enabling less-clean companies to pollute beyond their quotas for a price.
In the three years since the program began, El Segundo-based Unocal has spent $13.8 million to stockpile nearly 8,000 tons of emissions credits above and beyond its official allotment in the program.
Unocal spent $3.7 million in 1995, followed by $3.3 million in 1996. In just the first three months of 1997, Unocal has almost doubled its spending on emissions credits, shelling out $6.8 million to buy an additional 2,460 tons worth of credits.
One industry observer said Unocal's big purchase of Reclaim credits could be linked to the upcoming Tosco sale. He said Tosco probably "did its homework" prior to the deal and realized as did Unocal that the credits could be necessary to run the refinery safely and within environmental guidelines.
Unocal spokesman David Garcia acknowledged that Unocal plans to get out of the oil refining business. But he declined to elaborate on why Unocal has invested so heavily in emissions credits, calling the move a "business decision."
"We acquired these credits in the event we need them for our refining operations. But that doesn't mean we'll be emitting more. We can also sell the credits on the open market," he said.
Tosco officials were not immediately available for comment last week.
AQMD spokesman Sam Atwood said the Reclaim program was set up as an open market, and thus, companies should be able to freely purchase or sell as many credits as they want.
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