31-01-2013

API raises concern over high cost of new government fuel regulations

EPA sent new fuel regulations to the Office of Management and Budget for final review that would raise costs, provide little or no environmental benefit, and actually increase carbon emissions, according to API Downstream Group Director Bob Greco.

“EPA’s new regulations would raise the cost of making gasoline by as much as 25 cents a gallon,” Greco said. “Pump prices are still high, and this is clearly not the time to add burdensome and unnecessary regulations on gasoline, especially when there are no proven environmental benefits and current regulations are working.”

Costs would increase by as much as 25 cents a gallon if EPA includes a vapor pressure reduction requirement, according to a Baker and O’Brien analysis. The Agency considered such a requirement and could still implement it before a final rule is published, even if it is absent from the proposed rulemaking. If EPA’s Tier 3 regulations only reduce sulfur levels, the per gallon cost of making gasoline would increase by up to nine cents, according to another analysis by Baker and O’Brien. Greco said that API has urged EPA to do a full cost-benefit analysis, with stakeholder input, before moving to a rulemaking.

“Implementing the new requirements would actually increase greenhouse gas emissions because of the energy-intensive equipment required to comply,” Greco said. “We urge the administration to reconsider imposing these new regulations and burdening the already heavily regulated refiners in America. Unnecessary and overly burdensome regulations translate into high costs and lost jobs.”

API is a national trade association that represents all segments of America’s technology-driven oil and natural gas industry. Its more than 500 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation’s energy. The industry also supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $86 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.