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EPA Proposes Cleaner Fuels and Cars Standard

The proposed Tier 3 fuel regulations are designed to ensure that future vehicle models reduce emissions, are more efficient and save money at the pump; however, members of Congress and the American Petroleum Institute disagree.
April 1, 2013

​WASHINGTON – Based on feedback from auto manufactures, refiners and states, the U.S. Environmental Protection Agency (EPA) last week proposed new Tier 3 standards for cars and gasoline “that will significantly reduce harmful pollution, prevent thousands of premature deaths and illnesses, while also enabling efficiency improvements in the cars and trucks we drive,” according to a press statement.

EPA says that these cleaner fuels and cars standards are an important component of the Obama administration’s national program for clean cars and trucks, which also include fuel efficiency standards. However, according to the American Petroleum Institute, the agency’s proposed Tier 3 fuel regulations could raise refiners’ costs, provide little or no environmental benefit, and actually increase carbon emissions.

“There is a tsunami of federal regulations coming out of the EPA that could put upward pressure on gasoline prices,” API Downstream Group Director Bob Greco said in a press statement. “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 working.”

The proposed ultra-low sulfur standards, according to EPA, will cost refineries less than a penny per gallon of gasoline on average once the standards are fully in place. EPA’s proposal would also reduce gasoline sulfur levels by more than 60% — down to 10 parts per million (ppm) in 2017, which API says is too costly and could increase the cost of gasoline production by up to 9 cents per gallon.

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

According to API, if EPA adds a vapor pressure reduction requirement in a separate regulation, it would push the cost increase up to 25 cents a gallon. Separately, gasoline costs would also rise 30% by 2015 unless changes are made to federal ethanol mandates. Greco also cited EPA’s upcoming proposal for new ozone standards that could further increase manufacturing costs.

Rep. Fred Upton (R-MI), chairman of the House Energy and Commerce Committee, said in a statement that the EPA’s new Tier 3 proposed rules would drive gas prices higher. “Increases in gas prices disproportionately hurt the nation’s most vulnerable individuals and families…Instead of raising gas prices, the Obama administration should focus on bringing stability and greater supplies to our energy markets by green-lighting projects like the Keystone XL pipeline…”

Rep. Ed Whitfield (R-KY), chairman of the Energy and Power Subcommittee, added that the committee will review EPA’s proposal “to make sure that it delivers air quality benefits at the least cost to the driving public while preserving auto and refining industry jobs.”

The Association of Global Automakers, meanwhile, praised the EPA’s proposed rules for Tier 3 vehicle emissions and gasoline standards: "With 15 million new vehicle sales a year, automakers need predictable national fuel quality at the retail pump," said Michael Stanton, president and CEO. "Ultra-low sulfur gasoline is already available in California, Europe and Japan and will enable automakers to use a broader range of technologies to meet the significant environmental challenges facing the industry."