March 03, 2014

EPA Adopts Tier 3 Gasoline Standard

The EPA enacted new standards for gasoline today that is meant to reduce harmful vehicle pollution.

The final fuel standards will reduce gasoline sulfur levels by more than 60 percent – down from 30 to 10 parts per million (ppm) in 2017. Reducing sulfur in gasoline enables vehicle emission control technologies to perform more efficiently. New low-sulfur gas will provide significant and immediate health benefits because every gas-powered vehicle on the road built prior to these standards will run cleaner – cutting smog-forming NOx emissions by 260,000 tons in 2018.

The Tier 3 standards cut tailpipe pollution where people live and breathe – reducing harmful emissions along the streets and roadways that run through our neighborhoods and near our children’s schools. By 2018, EPA estimates the cleaner fuels and cars program will annually prevent between 225 and 610 premature deaths, significantly reduce ambient concentrations of ozone and reduce nitrogen oxide emissions by about 260,000 tons. That is about 10 percent of emissions from on-highway vehicles, with those reductions reaching 25 percent (330,000 tons) by 2030.

By 2030, EPA estimates that up to 2,000 premature deaths, 50,000 cases of respiratory ailments in children, 2,200 hospital admissions and asthma-related emergency room visits, and 1.4 million lost school days, work days and days when activities would be restricted due to air pollution. Total health-related benefits in 2030 will be between $6.7 and $19 billion annually. The program will also reduce exposure to pollution near roads. More than 50 million people live, work, or go to school in close proximity to high-traffic roadways, and the average American spends more than one hour traveling along roads each day.

According to the EPA, reducing the sulfur content will cost less than a penny per gallon of gasoline.

The American Petroleum Institute (API) is opposed to the new standard and estimates much higher costs for very little benefit.

“This rule’s biggest impact is to increase the cost of delivering energy to Americans, making it a threat to consumers, jobs, and the economy,” said API Downstream Group Director Bob Greco. “But it will provide negligible, if any, environmental benefits. In fact, air quality would continue to improve with the existing standard and without additional costs.”

The new rule could require $10 billion in capital costs, according to a study by Baker & O’Brien. The annual compliance cost is $2.4 billion, equating to a potential cost increase of between six cents and nine cents per gallon of gasoline produced. The new sulfur standard of 10 parts per million would “yield only very small additional improvements” in air quality, according to analyses by ENVIRON.

“Besides the enormous costs and negligible environmental benefit, we are also concerned about the timeline of EPA’s new rule,” Greco said. “The rushed timeframe leaves little opportunity for refiners to design, engineer, permit, construct, start up, and integrate the new machinery required. This accelerated implementation only adds costs and potentially limits our industry’s ability to supply gasoline to consumers.”

According to Ethanol Producer Magazine this standard also makes E10 the standard test fuel for emissions testing.

General Motors addressed the fact that E10, rather than straight gasoline, is now the new test fuel. “We commend EPA for selecting a certification fuel that is representative of in-use fuels,” the company said in a prepared statement. “This allows OEMs (original equipment manufacturers) to optimize vehicle performance to an actual fuel that our customers use nationwide.”

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