By MARK DRAJEM
Refiners say concessions offered by the US Environment
al Protection Agency in
an order issued to reduce smog-producing sulfur in gasoline
arent enough, and the rule will still result in higher
prices for consumers.
Known at Tier 3, the rule requires a two-thirds cut in sulfur
in the fuel to 10 parts per million by 2017 from a cap of 30
parts today. Refiners has fought the long-delayed plan,
saying it would be expensive to implement and set too tight a
timeline. The agency gave smaller refiners three additional
years to comply and offered larger companies a way to trade
credits to ease the sting of implementation.
We focused a lot on the flexibilities we could
provide, Janet McCabe, the head of the EPAs air
pollution office, said on a conference call with reporters.
The new regulations sparked years of conflict between
automakers, which support cleaner fuels that lower their
costs, and the oil industry, which will bear billions of
dollars in extra costs. Automakers back the rule because
individual states are starting to mandate changes and
low-sulfur gasoline will help them meet higher fuel-economy
standards. Sulfur occurs naturally in crude oil and can build
up on a vehicles catalytic converter, making the device
less effective over time.
Representatives of refiners such as ExxonMobil say complying
with the EPAs rules will cost them billions of dollars
and wont provide significant health benefits.
This rules biggest impact is to increase the cost
of delivering energy to Americans, making it a threat to
consumers, jobs, and the economy, said Bob Greco, head
of the downstream group at the American Petroleum Institute
(API). But it will provide negligible, if any, environment
al benefits. In fact,
air quality would continue to improve with the existing
standard and without additional costs.
The EPA estimates that the rules, once phased in, would raise
the cost of a gallon of gasoline by 0.65 cents and the price
of a new vehicle by $72. The total cost in 2017 will be $1.1
billion, which will be dwarfed by an economic accounting of
health benefits, according to the EPA.
Supporters of the rules, including the American Lung
Association and state clean-air agencies, say limits on
may be one of President
Barack Obamas most significant environmental
initiatives by cutting smog, which has been linked to asthma,
lung cancer and heart disease. It will help states and
localities meet federal ozone and other standards, while
cutting sicknesses and preventing 2,000 deaths a year,
according to the agency.
We know of no other strategy that will clean the air as
cost effectively as Tier 3, said George S. Aburn,
director of the Maryland Department of the Environment
The rules were also backed by automakers such as General
Motors, which says it will help them meet fuel-economy
standards and matches federal rules to those already in place
in California and 12 other states, allowing them to use one
type of technology
The benefit from our standpoint is that we get to do it
once, rather than several times, Mike Robinson, vice
president of GM, said on a conference call arranged by the
The EPA said its estimates of the costs of the rules were cut
since it first proposed the standards last year. It extended
the deadline for small refineries and the new credit trading
and banking system will let refineries focus investments
initially and phase-in their costs.
Also, with California and other states setting a standard for
sulfur at 10 parts per million, the additional costs for
refineries is less than previously estimated, according to
the EPAs analysis.
Refineries werent convinced by the EPAs olive
We still dont have any assurance that the supply
of credits into the system will be sufficient for refiners
that could delay compliance, Carlton Carroll, a
spokesman for API, said in an e-mail. EPA is
essentially saying trust us there there will be