Wednesday, February 26, 2014

Is Big Oil Flying the White Flag of Surrender on "Tier 3" Clean-Gas, Clean-Car Standards?

Dear friends,

Perhaps the oil industry is now resigned to its fate. I am talking about new EPA smog-fighting “Tier 3” standards that will require cleaner gasoline and cleaner new vehicles.

That’s the only way I can account for the email, below, that API chief Jack Gerard sent out this morning. It looks as if Gerard is flying the white flag of surrender and simply asking for surrender terms.

As I and many others have noted repeatedly, this EPA plan is the best and most effective smog-fighting tool available. (If you need more, please let me know!)

We are hoping that EPA issues a final rule as soon as possible – this week!

Gerard’s email does nothing more than repeat refuted studies about the cost of the clean-gas standards (less than a penny a gallon), about its environmental impact (it will reduce soot and smog-forming nitrogen oxides –enough to prevent 2,500 premature deaths a year! )-- while fleet emission reductions will more than offset ghg emissions from running pollution control equipment. (Big Oil’s concern for climate seems so lame and hypocritical!)

As "Duck Dynasty's" Uncle Si might put it, IS THAT ALL YOU GOT, JACK?!

Here is email, in case you missed it:


From: Jack Gerard, API
Date: Wed, Feb 26, 2014 at 8:44 AM
Subject: EPA’s Unnecessary New Gas Regulation

EPA’s Unnecessary New Gas Regulation

Dear xxx,

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.


Jack Gerard
President and CEO

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