New EPA Rules May Mean Higher Fuel Costs

Abstract: The Environmental Protection Agency (EPA) has moved to reduce sulfur levels in the air by upping emissions and gasoline standards. But the American Petroleum Institute and other trade associations argue that the regulators are vastly underestimating how expensive the new rules will be for businesses and consumers, while doing little to help the environment. This short article notes the different cost estimates.

New EPA rules may mean higher fuel costs

The Environmental Protection Agency (EPA) has moved to reduce sulfur levels in the air by upping emissions and gasoline standards. But according to some estimates, the new rules may mean almost a dime more per gallon of gasoline, an expensive proposition for distribution companies.

The rule changes, proposed in March and still under review by regulators as of this writing, would set reduced emissions levels for four separate categories starting in 2017: passenger cars, light-duty trucks, medium-duty passenger vehicles and heavy-duty vehicles.

The EPA estimates that the new standards will raise gasoline rates in the United States by one cent per gallon and $130 per vehicle. In addition, the EPA puts the overall price tag of the program for businesses and consumers at $3.4 billion by 2030.

The American Petroleum Institute (API) and other trade associations claim that the EPA is overstating its case. These groups argue that the regulators are vastly underestimating how expensive the new rules will be for businesses and consumers, while doing little to help the environment.

API cites outside research suggesting the cost of the new rules may increase the price of a gallon of gas by nine cents. Plus, the new rules would require $10 billion in additional investments to comply with the law, as well as an additional $2.4 billion per year on ongoing costs to meet the new requirements.