EPA Proposes Changes for Cleaner Gasoline by 2017, Oil Industry Complains
March 29, 2013 10:34 AM
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The petroleum industry opposes the EPA's sulfur reduction plans
Typically when we we're talking about the Environmental Protection Agency and gasoline, we're talking about the EPA's push to
increase the amount of ethanol
in gasoline used around the country or its efforts to increase fuel efficiency. However, the ethanol mandate isn't the only fuel agenda that the EPA is pursuing. The EPA is now proposing rules for cleaner gasoline that would go into effect by 2017.
This time around, automotive manufacturers are backing the new clean gasoline rules. The EPA has reportedly been working on the new rules for over 18 months and the rules would eventually require a two-thirds reduction of sulfur in gasoline by 2017.
According to the EPA, that sort of reduction in sulfur content in gasoline would be the equivalent of removing 33 million cars from the highways around the country. Automotive manufacturers also say that reducing the level sulfur in gasoline will improve vehicle performance.
Automaker associations supporting the new rules said in a meeting concerning the proposed regulations, "Reducing sulfur yields immediate and future public benefits. Ultra-low sulfur gasoline is already available; costs to implement nationwide are overstated."
Sulfur byproducts in gasoline reduce the effectiveness of catalytic converters and increase tailpipe emissions according automakers. The rules would also boost the durability of catalytic converters.
Refineries are already producing ultra-low sulfur fuel for use in California, the European Union, and Japan.
Predictably, the oil industry is opposing the proposed rules. Industry officials say that these changes would require capital investments of between $10 billion and $17 billion and would result in recurring annual costs of between $5 billion and $13 billion. The net effect according to the petroleum industry would be an increase in the cost of fuel per gallon of between $.12 and $.25.
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12 cents isn't chump change
3/29/2013 3:40:57 PM
As others have noted, keep in mind that the *refineries* are NOT the ones making big money. The big money is in the drilling of the oil and selling the crude.
Refineries make next to nothing - just like gas stations, that generally make just pennies for each gallon of gas they sell. Naturally, their profits fluctuate with the market too (both in terms of the cost of crude and the wholesale value of the refined fuel), but 12 cents in some cases might be 200% of the profit they're actually making.
So anyway...rage if you want to rage about the cost of gasoline. But don't do it in the direction of refineries (or gas stations). They're barely alive as it is.
RE: 12 cents isn't chump change
3/31/2013 11:40:31 AM
You're absolutely right, but the numbers provided by the refineries don't make sense here.
The US uses 134 billion gallons of gasoline per year. Divide the $5-12B recurring costs (and interest on the capital costs) over this and you get 4-9 cents per gallon. It's only going to get lower too (those figures are from 2011).
"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch
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