Will A Stricter Sulfur Rule Drive Up Gas Prices?

The Environmental Protection Agency has proposed slashing the sulfur content of gasoline by 2017. Refiners say the rule would cost billions of dollars to implement.

The Tier 3 sulfur rule would reduce the sulfur content of gasoline to 10 parts per million (ppm), down from the current limit of 30 ppm.  Bill Day is a spokesman for Valero, which operates refineries in Houston and Texas City.

“Valero has estimated it alone would spend about $300 million to $400 million dollars on compliance with Tier 3. That’s a huge expense for us, and we will probably have to pass that along to consumers.”

Day says the cost of implementing the rule could put many refiners on the East and West Coasts out of business. Not so, says Adrian Shelly, executive director of Air Alliance Houston.

“Of the 111 refineries that we have here in the United States, only 16 of those refineries would have to invest in major upgrades in order to come into compliance with this new standard, and 29 refineries are already in compliance, because they sell fuel to California.”

Shelly says the new rules would lower health care costs tied to respiratory illness.

 

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...