Orr put together a brain trust. He launched Octane, teamed up with Shires and, over a period of years, raised more than a million dollars from dozens of investors. Some of the money went to Orr's personal expenses; a great deal went to patent battles and lobbying efforts. "The independent refiners were saying, 'Where the hell is your product? We need octane,'" Orr recalls. "But it took sixteen years to get the patent. I kept wondering, 'Is this innocent? Am I being blocked here? What the hell is going on?'"

The logjam seemed to break in the fall of 2000, when NAFF obtained a $3.6 million grant from Congress to test Orr's patented product. Bob Schaffer had nothing to do with the coup, Orr says; the earmark was put into an appropriations bill by a congressional staffer at the urging of other lawmakers who thought Orr's technology should be investigated.

There was one catch: The grant was to be administered by the EPA, an agency Orr had battled time and again. Just a few months earlier, Orr had sued the EPA over a new round of emissions rules that he believed would be ruinous to his product and to the independent refineries most likely to use it. As in the MTBE controversy a decade earlier, Orr accused the agency of bad science and fraud — but he admits that the lawsuit was about economic survival as much as anything.

Tiger in the tank: Bill Orr battled for sixteen years to patent his fuel blend. Then he took on the EPA.
anthony camera
Tiger in the tank: Bill Orr battled for sixteen years to patent his fuel blend. Then he took on the EPA.
Taking stock: Octane investor Bob Gathers still defends Orr and the "crap shoot" of small business.
anthony camera
Taking stock: Octane investor Bob Gathers still defends Orr and the "crap shoot" of small business.

Details

Read more about this case -- including the government's response to claims by Orr's lawyers that prosecutors engaged in underhanded tactics to win a conviction -- head to the Latest Word blog.

"The EPA had been jerking me around a long time," he says. "I'd had enough."


The EPA initiative that prompted Orr to file suit, the Tier 2 Vehicle and Gasoline Sulfur Program, has been touted by the agency as a groundbreaking approach to automotive pollution control. It requires automakers to implement tougher emissions standards between 2004 and 2009 that will make their vehicles run 77 to 95 percent cleaner than 2003 models. Because the manufacturers complained that the sulfur in gasoline would damage the new wave of sensitive emission-control systems, it also requires refiners to remove 90 percent of the sulfur found in their product.

Refiners were understandably alarmed by Tier 2. Unlike lead, which was added to gas to boost octane, sulfur is a natural component of gasoline. Taking it out of the fuel supply would require an investment of billions — industry sources estimated the cost at $5 billion to $20 billion — and could drive some smaller operations out of business. The removal process would shrink the overall gas pool and lower the octane of the resulting product; in addition, some foreign refiners would be unable to meet the standards. The overall effect of a shrinking pool, less capacity, lower octane and less available imports would be an inevitable increase in the price of gas, although industry and government estimates of the actual impact of the program varied widely.

Orr had other objections. On a purely economic level, Tier 2 would devalue his product, which he believed worked better with sulfur in the gas than without it. In fact, one of Octane's selling points was that the MMT additive "grabs" sulfur and produces manganese sulfate — that it was cheaper to remove the sulfur in the combustion chamber rather than the refinery. Orr also maintained that the new rules would contribute to global warming (sulfur may be the only component of car exhaust that actually serves as an atmospheric coolant) and have other harmful environmental effects.

His most basic objection, though, was also the most intriguing one. Orr claimed that the EPA had never adequately demonstrated that sulfur would damage the new emission systems. Melvin Ingalls, an engineer at the Southwest Research Institute, a widely respected nonprofit facility that specializes in emission issues, prepared a detailed analysis of the EPA's test data and found it badly flawed — or, in his words, "a forced manipulation to meet a pre-ordained conclusion." In a report that became an integral part of Orr's lawsuit, Ingalls explained that the EPA had relied on data from only four vehicles to study the effects of high sulfur fuel; that data from one of the cars, an SUV modified to meet the Tier 2 regulations, was assigned disproportionate importance in the final results; and that there had been no reported failures of Tier 2 vehicles that could be blamed on sulfur. In short, Orr charged, the EPA cooked the science to justify a costly new regulation.

EPA officials have never responded directly to Orr's allegations. (A request from Westword for comment received no response.) The legal challenges to Tier 2 by refiners' groups eventually faded away. In testimony before Congress, EPA officials have maintained that the health and environmental benefits of Tier 2 have far outweighed the cost to the consumer, which they insist has been only a few pennies per gallon of gas. Other analysts have disputed that figure, saying it fails to take into account such factors as the decline in refining capacity in the United States over the past two decades due to ever-stricter regulations, which have a direct effect on the price of gas.

Ironically, it's not even clear that the new regs have had a positive impact on pollution, especially ozone levels. While the tighter controls have lowered nitrogen oxide (NOx) emissions, some scientists contend that the ratio of NOx to hydrocarbons is what matters, since it's the interaction between the compounds in the atmosphere that generates ozone.

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