Bloomberg News

Refiners Push EPA to Scrap Gasoline Rule That Automakers Want

March 14, 2012

The Environmental Protection Agency is considering rules that would cut the average sulfur emissions for gasoline to 10 parts per million from 30 parts per million. Photo: Paul J. Richards/AFP/Getty Images

The Environmental Protection Agency is considering rules that would cut the average sulfur emissions for gasoline to 10 parts per million from 30 parts per million. Photo: Paul J. Richards/AFP/Getty Images

Refiners are pushing the U.S. Environmental Protection Agency to delay tighter pollution rules for gasoline, while automakers say they need the cleaner fuel.

The rules will probably be delayed beyond an EPA deadline of this month. The agency hasn’t sent them to the White House for review, a process that can take 90 days to complete. And EPA Administrator Lisa Jackson already pledged that the agency will limit its rules -- whenever they come out -- to a cut of sulfur in gasoline.

Despite the delay and rising gas prices, lobbyists representing Ford Motor Co. (F) and General Motors Co. (GM) aren’t backing down from the fight against refiners such as Tesoro Corp. (TSO), as they argue that cleaner gasoline is necessary to help them realize pledged fuel-economy improvements.

“Ever-cleaner cars will need even cleaner fuels,” Gloria Bergquist, vice president for communications at the Alliance of Automobile Manufacturers in Washington, said in an e-mail. Without cleaner fuels, an “unfair proportion” of the burden of meeting increased fuel-economy standards will fall on automakers, the group told the EPA last year.

The so-called Tier 3 standards would set pollution emission levels for gasoline. Tier 2 guidelines were issued in 2000, and phased in over a decade. The rules the EPA is considering would cut average allowable sulfur emissions to as low as 10 parts per million from the current 30 parts per million, according to a Oklahoma Republican Senator James Inhofe, who wrote EPA in January to try to head off the regulations.

Inhofe Objections

“With gasoline prices already high, and with so many Americans already struggling to make ends meet, we urge you to recognize that now is not the time for new regulations,” Inhofe and five other senators wrote Jackson on Jan. 12.

The American Petroleum Institute commissioned a study that said tight new EPA rules could increase prices at the pump by 25 cents a gallon. That study factored in standards for vapor pressure that Jackson has since told lawmakers the agency doesn’t plan to propose. The EPA estimated the rules would add 1 cent to the cost per gallon.

The Alliance of Automobile Manufacturers said sulfur in gasoline “poisons” emission-control devices, reducing their ability to cut tailpipe emissions. As a result, carmakers must “overdesign” the equipment to meet pollution standards, the group said in document submitted to the EPA.

‘Strategic Decision’

“We still expect the agency to push for a reduction in vapor pressure,” Patrick Kelly, senior policy adviser at the American Petroleum Institute in Washington, said in an interview. “It’s just a strategic decision on how they would get there.”

Getting there has taken a detour, as gasoline has grown in political importance.

Regular gasoline at the pump averaged $3.80 nationwide as of March 12, up about 3 cents from a week earlier, according to AAA data. Prices about 15 percent higher this year, generating angst among consumers in an election year and criticism from Republicans.

A Washington Post-ABC News poll published March 12 showed 65 percent of Americans surveyed disapprove of the way President Barack Obama is handling gasoline prices, with 26 percent expressing support. The poll of 1,003 adults taken March 7-10 has a margin of error of four percentage points.

A Bloomberg National Poll conducted March 8-11 found that 66 percent place more responsibility for rising prices on oil companies and Middle East nations taking advantage of tensions with Iran. Only 23 percent say the White House is more at fault.

‘Election-Year Limbo’

Still, gasoline fears make it unlikely the administration will issue the fuel rules anytime soon, Peter Iwanowicz, assistant vice president of the American Lung Association, said in an interview.

“The rule has gone off into election-year limbo,” Frank O’Donnell, president of Clean Air Watch in Washington and supporter of the new standards, said in an e-mail.

So far EPA is not backing off: “The agency continues to develop the Tier 3 vehicle and fuel standards -- engaging diverse stakeholders as part of that process,” Alisha Johnson, an agency spokeswoman, said in an e-mail.

And neither are automakers. They say Europe and Japan already have rules in place, and that the EPA needs to impose requirements similar to those being pursued by California.

“A manufacturer should be required to develop and produce only one version of a vehicle for the U.S. market, and that vehicle should be subject to one set of certification procedures,” Michael Stanton, president of the Association of Global Automakers in Washington, which represents companies such as Honda Motor Co. (7267) and Toyota Motor Corp. (7203), wrote in a letter to Jackson on Feb. 17. “Anything more wastes resources.”

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus