Study: EPA gasoline regulations could raise costs by 25 cents per gallon

WASHINGTON, July 29, 2011 – A new study says that upcoming EPA requirements could raise the cost of manufacturing gasoline, lead to the closing of domestic refineries, and force the U.S. to double its gasoline imports – while causing increased carbon dioxide emissions.

"The new EPA requirements could be devastating to consumers and communities across the nation," said Bob Greco, API’s group director of downstream operations. "Consumers would be hurt by the increased cost of fuel projected by the study, and the closing of refineries could put local economies at risk, meaning there would be fewer jobs. In addition, we would be forced to rely even more on foreign fuel supplies, and that can only weaken our nation’s economy and national security."

The new study, which was conducted by energy consulting firm Baker & O’Brien for API, examines the potential costs of EPA’s "Tier 3" fuel standard for gasoline blends which could be proposed at the end of the year.

The study determined that the new requirements could boost the cost of making gasoline by up to 25 cents per gallon and could shutter up to seven U.S. refineries but predicted that it could drive up carbon dioxide emissions by up to 7.4 million tons a year because of the increased energy needed to manufacture the new fuel blend.

"These regulations don’t make sense environmentally or economically," said National Petrochemical & Refiners Association President Charles T. Drevna. "The proposal would increase greenhouse gas emissions, hurt American consumers by adding billions of dollars to the cost of manufacturing gasoline, hurt communities and workers by threatening to put some fuel manufacturing plants out of business, and weaken America’s economic and national security."

EPA cites new ozone NAAQS requirements as one of the reasons for the new gasoline requirements, but Greco pointed out that new, out-of-cycle ozone requirements "would clearly harm job creation and economic growth, all at a time when air quality continues to improve under the existing standards."

API represents more than 470 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports more than 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers $86 million in revenue to our government every day, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.