After long delay, EPA rolls out strict sulfur rules for gasoline

Source: Jason Plautz, E&E reporter • Posted: Monday, April 1, 2013

The Obama administration Friday released a long-awaited proposal that would slash by two-thirds the amount of sulfur in gasoline, signaling to environmentalists and industry sources alike that the White House will move forward with a suite of air pollution regulations this term.

The so-called Tier 3 standards released this morning would lower the levels of sulfur in gasoline from 30 parts per million to 10 ppm by 2017 while also slashing emissions of smog and particulate matter from vehicles. The new requirements would put federal standards in line with those set in California and some other countries.

According to U.S. EPA, the standards would prevent up to 2,400 premature deaths and 23,000 cases of respiratory ailments by 2030.

“Today’s proposed standards — which will save thousands of lives and protect the most vulnerable — are the next step in our work to protect public health and will provide the automotive industry with the certainty they need to offer the same car models in all 50 states,” said EPA acting Administrator Bob Perciasepe.

Observers suspect the standards have been ready for the better part of a year but were put on hold last spring due, in part, to opposition from oil industry and refining groups.

Environmentalists and public health groups had been pushing for the rule to come out of the White House Office of Management and Budget before the end of the month, as EPA had promised, in order to get it finalized before the end of the year.

If the rule slips past the end of the year, groups fear it will miss a model year of vehicles.

Environmentalists and public health advocates cheered the move as an important step forward in a much-delayed process.

“Pollution from cars, light trucks and SUVs kills and makes people sick,” said Paul Billings, senior vice president of the American Lung Association. “Using lower-sulfur gasoline in cars currently on the road will reduce as much pollution as taking 33 million cars off the road.”

And Frank O’Donnell, president of Clean Air Watch, said the Tier 3 standards could “prove to be the signature clean-air initiative of President Obama’s second term.”

The auto industry also backs the Tier 3 standards, saying they are important to cut emissions and align the federal rules with standards in California and around the world.

“Our cleaner cars will need even cleaner fuels like those already sold across Europe and Asia, so we are pleased EPA is proposing lower sulfur fuels,” the Alliance of Automobile Manufacturers, which represents domestic automakers, said in a statement. “This is a big step forward that will help the U.S. catch up to the cleaner fuels available in other industrialized nations.”

The oil industry, however, has slammed the standards, saying they would raise gas prices at a time when they are already too high and could force some refineries to close. Bob Greco, director of downstream activities for the American Petroleum Institute, said the “unnecessary regulations just mean higher costs and lost jobs.”

“Consumers care about the price of fuel, and our government should not be adding unnecessary regulations that raise manufacturing costs, especially when there are no proven environmental benefits,” Greco said. “We should not pile on new regulations when existing regulations are working.”

The industry has cited a study from consulting firm Baker & O’Brien that found the Tier 3 proposal could raise gas prices by up to 9 cents per gallon.

House Energy and Commerce Chairman Fred Upton (R-Mich.) echoed that concern in a statement, saying, “Instead of raising gas prices, the Obama administration should focus on bringing stability and greater supplies to our energy markets by green-lighting projects like the Keystone XL pipeline.”

EPA has said that the cost increase would be just a penny per gallon and that there would be an estimated $7 in health savings for every dollar spent to meet the standards.

More rules in the pipeline

Sources said today’s release of the rule could signal the opening of a regulatory logjam in the Obama administration, potentially paving the way for more regulations on emissions from new and existing power plants and new ozone standards. EPA moved the rule before the end of March, as promised, even though it meant releasing it on Good Friday.

And the administration also released the proposal under the tenure of Perciasepe, rather than waiting for administrator nominee Gina McCarthy’s confirmation by the Senate. McCarthy’s confirmation hearing in the Environment and Public Works Committee will likely occur in early April, but the committee has not scheduled it yet, and sources said the White House wasn’t likely to hold the standards for that long.

Jesse Prentice-Dunn, transportation policy analyst for the Sierra Club, said that the “strong regulations” would have a huge impact and that the release today “signals that the Obama administration is serious about moving forward with standards that will protect public health.”

The standards prompted concern from opponents of EPA’s regulatory agenda, however. Stephen Brown, vice president for federal affairs at Tesoro Corp., said that through ozone standards and performance standards for refineries, the White House was set to “slam the oil industry on their way out the door in 2016.”

“Nothing this White House does is by accident,” Brown said about the timing of today’s proposal. “They held this rule for almost a year to get the 2012 elections behind them and then had to frog-march EPA yesterday to get the proposed rule out on Good Friday when they know folks are otherwise distracted.”

Sen. David Vitter (R-La.) today said the rule “signals a frightening flood of new rules under the potential Gina McCarthy-led EPA and represents one of a litany of likely regulations that require transparency to justify both the costs and the benefits.”

Vitter, along with four other oil-state senators, in February asked EPA to hold the rules (E&E Daily, Feb. 5).

The rule will be published in the Federal Register and will go through a public comment period later this year.