By ALISON SIDER
Valero Energy said the cost of complying with new pollution standards for gasoline will cost hundreds of millions of dollars in equipment construction and upgrades alone.
Valero spokesman Bill Day said Tuesday that the company expects to spend $300 million to $400 million building new equipment to remove sulfur from gasoline and to expand existing facilities. He said the company expects to incur additional operating costs each year, and those costs have yet to be determined.
The Environmental Protection Agency said most refineries will be able to comply with its plan to reduce the amount of sulfur in gasoline with little to no effort. The agency is proposing to cut the sulfur content to an average of 10 parts per million, down from the current standard of 30 parts per million.
Valero is the largest US independent refiner. The American Petroleum Institute has estimated that the new standards would cost refiners $10 billion in up-front capital expenditures, and an additional $2.4 billion in annual compliance costs.
"The EPA hasn't shown anything that suggests [the proposed standard] is going to have the benefits that would be worth the costs," Mr. Day said.
He said Valero isn't involved in discussions with the EPA on the proposal, though he said the industry has had some input at times.
Dow Jones Newswires