Fairly soon, the Environmental Protection Agency (EPA) is expected to finalize new restrictions on the sulfur content of fuel – restrictions that are both costly and unnecessary. Although the nation’s refiners have already reduced average sulfur content by 90 percent – from 300 parts per million (ppm) to 30 ppm — EPA’s new Tier 3 rule would mandate a further reduction from 30 to 10 ppm.
Simple cost-benefit analysis demonstrates the new Tier 3 rule is misguided:
According to a study by ENVIRON, removing the last bits of sulfur from gasoline would provide negligible, if any, environmental benefits. Baker & O’Brien found the rule will actually increase CO2 emissions at U.S. refineries because of the energy-intensive hydro treating equipment needed to meet the new standard.
If finalized, the rule could lead to $10 billion in new capital costs; the annual compliance cost is $2.4 billion, equating to a potential increase of between 6 cents and 9 cents per gallon to the cost of making gasoline, according to a study by Baker & O’Brien.
The EPA’s proposed under three-year timeframe leaves little opportunity for refiners to design, engineer, permit, construct, start up, and integrate the new machinery required – forcing an accelerated implementation that adds costs and potentially limits the industry’s ability to supply gasoline to consumers.
EPA has failed to provide the evidence that this new standard would appreciably improve air quality. In fact, EPA’s proposed 10 parts per million standard is completely arbitrary — not at all supported by science.
The current Tier 2 standard is still providing sulfur reductions, and tailpipe emissions from our nation’s vehicle fleet will continue to drop under existing regulations as more new cars and trucks come into the market that can take advantage of today’s advanced, cleaner burning fuel. We can all agree that protecting the public’s health and the nation’s environment is important. However, EPA’s Tier 3 regulations for gasoline go too far, too fast.
President and CEO