Obama administration moves ahead with sweeping rules requiring cleaner gasoline

March 28, 2013

The Environmental Protection Agency will move ahead Friday with a rule requiring cleaner gasoline and lower-pollution vehicles nationwide, amounting to one of President Obama’s most significant air pollution initiatives, according to people briefed on the decision.

The proposed standards would add less than a penny a gallon to the cost of gasoline while delivering an environmental benefit akin to taking 33 million cars off the road, according to a senior administration official, who spoke on the condition of anonymity because the announcement had not been made yet.

Oil industry officials, however, said the cost would be at least double the administration’s estimate and could add up to 9 cents a gallon in some places.

The proposed standards, which had been stuck in regulatory limbo since 2011, would reduce the amount of sulfur in U.S. gasoline by two-thirds and impose fleet-wide pollution limits on new vehicles by 2017.

The Obama administration’s decision to go ahead with the regulations deals a political blow to the oil and gas industry, which had mobilized dozens of lawmakers in recent days to lobby the White House for a one-year delay.

It also comes as the administration alarmed many environmentalists by weighing a delay in limits on greenhouse gas emissions from new power plants. Unlike the sulfur limits, the administration argued, the power plant limits could immediately hurt the struggling economy.

While gasoline sulfur itself does not pose a public health threat, it hampers the effectiveness of catalytic converters, which in turn leads to greater tailpipe emissions. These emissions — nitrogen oxides, volatile organic compounds, carbon monoxide and fine particles — contribute to smog and soot, which can cause respiratory and heart disease.

The proposed standards were first reported by The Washington Post on Thursday afternoon and confirmed by the administration Thursday night.

The regulations are supported by environmental advocates, state regulators and even automobile companies, who would prefer uniform sulfur standards for fuel nationwide. But oil industry officials and their congressional allies say it will cost up to $10 billion to upgrade refineries and an additional $2.4 billion in annual operating costs.

Both public health advocates and the administration say the ultimate cost would be much lower because of provisions giving refiners flexibility in complying with the standards. The EPA estimates annual health benefits of up to $23 billion by 2030.

The agency surveyed 111 U.S. refineries and found 29 already can meet the sulfur standard or come close to it, 66 can reach it with modest modifications and 16 would require a major overhaul.

The requirements also have the potential to cut major contributors to smog-forming ozone and pollution — nitrogen oxides and particulate matter, or soot — by 80 percent and 70 percent, respectively, according to the administration official.

S. William Becker, executive director of the National Association of Clean Air Agencies, said the new standard could be “the most significant air pollution policy President Obama will adopt in his second term. . . . There is not another air pollution control strategy that we know of that will produce as substantial, cost-
effective and expeditious emissions reductions.”

Automakers have lobbied in favor of the rule in part because they must already meet stricter emissions standards in California.

“Cleaner cars will need the cleaner fuels already on sale across Europe and Asia,” said Auto Alliance spokeswoman Gloria Bergquist, whose group represents a dozen automakers. “And the best part of these low sulfur fuels is that they provide clean air benefits to all 250 million vehicles on the road right away, from day one, at the gas pumps.”

Charles T. Drevna, president for the American Fuel and Petroleum Manufacturers, said the EPA is not obligated under the Clean Air Act to reduce the sulfur content of gas any further. U.S. refiners have lowered gasoline sulfur nearly 90 percent since 2004, according to the association, from 300 to 30 parts per million.

“Those remaining molecules of sulfur that are left, those little buggers don’t want to come out easily,” Drevna said. “We still believe that EPA has not demonstrated the need for this regulation.”

Environmentalists and public-health advocates said reducing sulfur content is particularly important for more than a third of Americans who live in communities that do not meet federal air-quality standards. In Washington, for example, two-thirds of the nitrogen oxide pollution stems from passenger vehicles.

Sixteen Democrats in the House and five in the Senate have appealed to the White House in recent days to delay the proposal for a year, while at least 60 congressional Republicans have objected to it.

Rep. Steve Scalise (R-La.) told reporters in a call Thursday that if the EPA thinks new requirements are justified, “then they shouldn’t be afraid to lay their cards on the table” and allow at least a year for more public scrutiny.

Bob Greco, group director for downstream and industry operations at the American Petroleum Institute, said the nation’s refiners are struggling to meet other federal environmental requirements, including renewable-fuel mandates.

“Our industry is already facing a tsunami of regulations from EPA,” Greco said. “We’re just making it that much harder for refiners to compete globally and stay up and running.”

The administration made several provisions for flexibility in the rule, including a three-year delay for small refiners, rewards for businesses who act early to reduce sulfur and a trading program for pollution credits, according to those familiar with the regulations. Backers say the standards will also generate new jobs in the refining and pollution-control industries.

Critics remain skeptical. “They only amount to a stay of execution for the U.S. refining industry,” said Stephen Brown, vice president of government relations for Tesoro, a refiner and marketer of petroleum products.

Janice Nolen, the American Lung Association’s head of national policy and advocacy, said the standards would translate into fewer cases of asthma, heart and lung disease, as well as fewer missed work days across the country.

“There’s still a lot of pollution that these cars and vans and pickup trucks are producing,” Nolen said.

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Juliet Eilperin is a White House correspondent for The Washington Post, covering domestic and foreign policy as well as the culture of 1600 Pennsylvania Avenue. She is the author of two books—one on sharks, and another on Congress, not to be confused with each other—and has worked for the Post since 1998.
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