Ethyl Corp.'s expensive and controversial campaign to win federal approval for a new -- and potentially profitable -- gasoline additive has run into a roadblock.
Ethyl announced yesterday that it has temporarily withdrawn its application to the Environmental Protection Agency for approval of HiTec 3000, an additive the company claims would curb air pollution and improve engine performance. The company withdrew the application only a few days before the Nov. 5 deadline for the EPA to rule on the matter and said it would resubmit the application after it irons out discrepancies between its tests and EPA tests of auto emissions.
Richmond-based Ethyl claims the additive, which it would market to oil companies, boosts octane and reduces harmful emissions that contribute to urban smog.
However, environmentalists oppose the Ethyl application, claiming that HiTec 3000 contains manganese, an ore-like chemical that is toxic to humans. Ethyl has claimed that the amount of manganese that would be emitted would be "of no concern from a public health or environmental perspective."
Analyst Leonard Bogner of Prudential-Bache Securities Inc. in New York said he considered Ethyl's decision to temporarily withdraw its application as a delay, not a setback, and predicted that Ethyl had a "greater than 50 percent chance of winning EPA approval." Bogner estimated that, if approved, HiTec 3000 could represent a $350 million-a-year market for Ethyl.
The chemical and pharmaceutical company has waged an extensive advertising campaign for HiTec 3000, while the Environmental Defense Fund and others have attacked the plan with ads proclaiming its harmful effects.
Ethyl shares closed in trading on the New York Stock Exchange yesterday at $20.87 1/2, down $1.50.