The American Petroleum Institute stated on Friday that "there is a tsunami of federal regulations coming out of the EPA that could put upward pressure on gasoline prices." According to the institute's Downstream Group Director Bob Greco, the new Tier 3 fuel regulations could raise refiners' costs while providing little to no environmental benefit. Here are the details.
* The EPA released its proposal on Friday that would involve new standards on tailpipe emissions, evaporative emissions, fuel, and emissions test fuel. The EPA estimates that the new standards will have an average cost of about $130 per vehicle in 2025.
* The American Petroleum Institute stated that analysis by energy consulting firm Baker & O'Brien indicates that the Tier 3 proposal would increase the cost of gasoline production by up to nine cents per gallon. A vapor reduction requirement would push the cost increase up to 25 cents a gallon and gasoline costs would also rise 30 percent by 2015.
* Further, Greco stated, the new requirements would actually increase greenhouse gas emissions because of the energy-intensive equipment needed to comply.
* Charles T. Drevna, president of the trade association American Fuel & Petrochemical Manufacturers, echoed the institute's concerns, stating that the new standards are "completely without merit given that the Agency has not previously offered any cost/benefit analysis to justify this onerous rulemaking."
* According to the association, another $10 billion in new infrastructure and $2.4 billion in operating costs will be the result of the Tier 3 regulations.
* However, the Association of Global Automakers praised the proposed standards, stating that the rulemaking will harmonize federal and California programs for both vehicles and fuels.
* The emissions standards included in the rule mirrors California's standards, the automakers association reported.
* According to the EPA, the standards will reduce pollution and help to avoid up to 2,400 premature deaths a year and 23,000 cases of respiratory ailments in children by 2030, in addition to 3,200 hospital admissions and asthma-related emergency room visits, and 1.8 million lost school days, work days and days when activities would be restricted due to air pollution .
* The EPA estimated that, by 2030, the total health-related benefits will be between $8 and $23 billion annually.
* "Today's proposed standards -- which will save thousands of lives and protect the most vulnerable -- are the next step in our work to protect public health and will provide the automotive industry with the certainty they need to offer the same car models in all 50 states," said EPA acting administrator Bob Perciasepe.
- Nature & Environment
- American Petroleum Institute