U.S. SECURITIES AND EXCHANGE COMMISSION

             LITIGATION RELEASE NO.  15822 / July 29, 1998

             SECURITIES AND EXCHANGE COMMISSION V. ENVIRONMENTAL ENERGY,
             INC.; ENVIRONMENTAL OPERATING, INC.; IRVINE SECURITIES,
             INC.; LARRY R. CROWDER; JOHN R. POWELL; CHRISTIAN R.
             HIGGINS; CHARLES L. POWELL; JAMES P. GALLAHER; DALE J.
             ENGELHARDT; AND TREY L. FRIEDMANN  Civil Action No. 98-6060-
             CM (BQRx) (C.D. Cal.)

             The Securities and Exchange Commission ("Commission")
             announced today that  on July 28, 1998, it filed a Complaint
             in the United States District Court for the Central District
             of California charging seven individuals and three
             businesses from Orange County, California ("Defendants")
             with securities fraud in a multi-million dollar scheme
             concerning oil and gas partnerships ("Partnerships").

             Named in the Complaint are:  Larry R. Crowder ("Crowder"),
             age 40, residing in Coto de Caza, California; John R. Powell
             ("Powell"), age 40, residing in Laguna Beach, California;
             and three Irvine, California based businesses --
             Environmental Energy, Inc. ("EEI"), Environmental Operating,
             Inc. ("EOI") and Irvine Securities, Inc. ("Irvine
             Securities").  Also named in the Complaint are five
             securities salesmen:  Christian R. Higgins ("Higgins"), age
             22, residing in Newport Beach, California; Charles L. Powell
             ("C. Powell"), age 45, residing in Huntington Beach,
             California; James P. Gallaher ("Gallaher"), age 44, residing
             in San Juan Capistrano, California; Dale J. Engelhardt
             ("Engelhardt"), age 33, residing in Trabuco Canyon,
             California; and Trey L. Friedmann ("Friedmann"), age 33,
             residing in Costa Mesa, California.

             According to the Complaint, from 1993 to the present,
             Crowder and Powell developed and ran the Partnership scheme
             through EEI, EOI and Irvine Securities, raising $15.7
             million from over 600 investors nationwide.  Partnership
             offering documents provided to investors represented that
             large percentages of the investor funds would be used to
             acquire oil and gas interests, and the offering documents
             sometimes explicitly stated that these acquisition
             transactions would be between EEI (directly or through an
             affiliate) and that EEI would make a profit on the
             transaction.  The offering documents, however, do not
             adequately disclose the extent of the profit that EEI made
             on the acquisition transactions.  The Complaint alleges
             that, in fact, EEI made massive profits that ranged from at
             least 159% to over 64,000% of the amount that EEI paid.
             Crowder, Powell, EOI and Irvine Securities also represented
             to investors that certain oil and gas interests would be
             purchased when, in fact, Crowder and Powell knew that they
             had lost the right to purchase those interests because their
             option contract had expired.

             The Complaint further alleges that the salesmen made
             material misrepresentations in their solicitations to
             investors by inflating the expected return on investment,
             overstating the actual return on investment, misrepresenting
             that they themselves had invested in the Partnerships (they
             had not) and misrepresenting the status of a related utility
             that was to buy gas produced from the Partnerships.

             The Commission seeks permanent injunctions and civil
             penalties against all of the Defendants.  It also seeks
             disgorgement of ill-gotten gains and prejudgment interest
             against Crowder, Powell, EEI and EOI.

             The Commission charged Crowder, Powell, EEI, EOI, and Irvine
             Securities with violations of Sections 5(a), 5(c) and 17(a)
             of the Securities Act of 1933 ("Securities Act") and Section
             10(b) of the Securities Exchange Act of 1934 ("Exchange
             Act") and Rule 10b-5 thereunder.  The Commission
             additionally charged Irvine Securities with violations of
             Section 15(c) of the Exchange Act and Rule 15c1-2
             thereunder.  The Commission charged Higgins, C. Powell,
             Gallaher and Engelhardt with violations of Section 17(a) of
             the Securities Act and Section 10(b) of the Exchange Act and
             Rule 10b-5 thereunder.  Finally, the Commission charged
             Friedmann with violations of Sections 17(a) of the
             Securities Act and Section 15(a) of the Exchange Act.