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Regulations could raise gasoline manufacturing costs

Hydrocarbon Engineering,

The Environmental Protection Agency’s (EPA) proposed Tier 3 fuel regulations could raise refiners’ costs, provide little or no environmental benefit, and actually increase carbon emissions, according to Bob Greco, API Downstream Group Director.


‘There is a tsunami of federal regulations coming out of the EPA that could put upward pressure on gasoline prices,’ Greco said. ‘EPA’s proposed fuel regulations are the latest example. Consumers care about the price of fuel, and our government should not be adding unnecessary regulations that raise manufacturing costs, especially when there are no proven environmental benefits. We should not pile on new regulations when existing regulations are not working.

‘Implementing the new requirements would actually increase greenhouse gas emissions because of the energy intensive equipment required to comply,’ Greco continued. ‘We urge the administration to bring common sense back into the regulatory process. Unnecessary regulations just mean higher costs and lost jobs.’

Tier 3

According to analysis by Baker & O’Brien, the new EPA proposal would increase the cost of gasoline production by up to 9 cents/gal. If EPA adds a vapour pressure reduction requirement in a separate regulation, it would push the cost increase up to 25 cents. Separately, gasoline costs would also rise 30% by 2015 unless changes are made to federal ethanol mandates, according to a newly released study by NERA Economic Consulting. Greco also cited EPA’s upcoming proposal for new ozone standards that could further increase manufacturing costs.

Adapted from press release by Claira Lloyd.

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