New Clean Fuel Standards: Who Pays?

A rule just proposed by the Environmental Protection Agency would cut sulfur levels in gasoline by 60 percent. Refiners say the rule, known as Tier Three, would dramatically increase costs at the pump.

The EPA says the proposed Tier 3 would slash pollutants that contribute to respiratory illnesses. Scott Segal, a partner at the law firm of Bracewell & Giuliani, says the rule will be expensive to implement.

“Let’s face it. It’s the petroleum refinery that will be responsible for the installation of the desulfurization equipment. And that ultimately translates into higher operational costs, and then is reflected directly in a cost to the consumer at the pump of as much as 9 cents a gallon.”

Bill Becker, executive director of the National Association of Clean Air Agencies, says refiners are exaggerating the costs. He says cutting sulfur levels in gasoline is not only the cheapest way to reduce air pollution, it’s also the fairest.

“If Tier 3 does not go forward, then other manufacturing and industrial operations in the Houston area will have to pick up the slack.”

If the rule is finalized, the new sulfur standard would take effect in 2017.

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...