EPA Tier III rulemaking promises higher gasoline costs

03 22, 2012 by American Petroleum Institute

Citing an analysis by energy consulting firm Baker and O’Brien, API’s Group Director for Downstream and Industry Operations Bob Greco told reporters this afternoon that EPA’s rulemaking on Tier III could substantially increase the cost of making gasoline without any proven environmental benefits:

“A new analysis for API by Baker and O’Brien shows a Tier III rule reducing sulfur … would increase the per gallon cost of manufacturing gasoline by between six and nine cents. Including a vapor pressure reduction, which EPA considered, could increase the costs of manufacturing by as much as 25 cents per gallon. With the pump price of gasoline already above $4 a gallon in some parts of the country, this added burden clearly makes Tier III the wrong regulation at the wrong time.

“More importantly, EPA has yet to demonstrate any air quality benefits from reducing sulfur in the amount proposed. And, as the Baker and O’Brien analysis also shows, implementing the new requirements would increase greenhouse gas emissions because of the use of energy-intensive hydrotreating equipment to remove sulfur from the gasoline.

“We urge the administration to take a step back on Tier III and its other proposed rules. We must be sure that new regulatory proposals are necessary, properly crafted, practical, and fair to allow US refiners to remain competitive, preserve good paying refinery jobs, and ensure our energy security.”

API represents more than 500 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.