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July 15, 2013
Little benefit in Tier III gas standards, says API

A study commissioned by the American Petroleum Institute (API) questions the benefits of reductions in airborne PM-2.5 that will result from EPA’s proposed Tier III vehicle emissions and fuel standards regulations.  The proposed rule (May 21, 2013, FR) would lower the maximum annual average sulfur content of gasoline from the current 30 parts per million (ppm) to 10 ppm beginning January 1, 2017. 

Based on the study, the API asserts that virtually all the benefits of gasoline sulfur reductions were achieved with the Tier II standards, which lowered gasoline sulfur content from 300 ppm.  The added capital cost for refiners to achieve the “relatively small additional improvements” in PM air pollution under the proposed Tier III standards could approach $10 billion with “little environmental benefit,” says the API.

Deaths prevented

According to the Agency, the proposed Tier III vehicle and fuel standards together would “reduce dramatically emissions of NOx, VOC, PM-2.5, and air toxics.”   The EPA estimates that by 2030, the annual emissions reductions of the Tier 3 standards would annually prevent between 670 and 1,700 PM-related premature deaths.   The Agency says the proposed sulfur standards are similar to levels already being achieved in California, Europe, Japan, South Korea, and several other countries.

Compliance costs disputed

But, according to ENVIRON International Corporation, API’s contractor, the Tier II standards would reduce peak monthly 24-hour PM-2.5 concentrations by no more than 0.2 micrograms per cubic meter (µg/m3). This compares to the 5.8µg/m3 reductions in summertime monthly maximum 24-hour PM-2.5 concentrations expected as a direct result of the transition from the Tier I to the Tier II standards.

Estimates of per gallon manufacturing cost increases resulting from the proposed Tier III standards vary considerably.  The EPA puts the figure at about 1 cent per gallon, while industry says it will be closer to 6 to 9 cents per gallon.  But that is only part of the problem for the API.

“Tier 3 is just one of several ill-conceived EPA regulations that would adversely impact refineries and could hurt consumers,” said Howard Feldman, API’s director of regulatory and scientific affairs, at a press briefing.  Citing another study, Feldman says a possible vapor pressure reduction requirement could increase refinery costs as much as 25 cents per gallon when combined with the new Tier III rules. 

“Then there are other refinery regulations on the horizon, such as the refinery sector rule, new ozone NAAQS requirements, and greenhouse gas controls for refineries,” added Feldman.  “Together these rules could not only put upward pressure on energy prices, they also could severely discourage business expansion and new development and deprive the nation of much-needed new jobs.”

Americans in favor?  

Supporters of the proposal point to a January 2013 poll of 800 registered voters commissioned by the American Lung Association (ALA).  A 2-to-1 majority (62 percent to 32 percent) support EPA setting stricter standards on gasoline and tightening limits on tailpipe emissions from new vehicles, reported the ALA, and only 17 percent of voters believe the EPA is exceeding its legal mandate to ensure air quality.

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