EPA announces new sulfur emission limits

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The Environmental Protection Agency on Monday issued stricter emissions standards for cars and trucks that limit the amount of sulfur that can be used in gasoline.

EPA officials hailed the new standards, which they said would prevent as many as 2,000 respiratory deaths per year while imposing minimal costs on refiners and automakers.

The American Petroleum Institute (API), however, said the standards would raise gas prices while providing little environmental gain. The group also said a 2017 deadline for meeting the standards could cause an interruption in supply.

“Besides the enormous costs and negligible environmental benefit, we are also concerned about the timeline of EPA’s new rule,” said Bob Greco of the American Petroleum Institute.  

“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," Greco said. 

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) blasted the regulation and echoed the warnings from industry groups.

"The American people have endured an unprecedented three straight years of gasoline above $3 per gallon. This winter’s cold snap underscores just how vulnerable American families and businesses are to any increases in energy costs, and yet the administration is moving forward to raise prices at the pump,” Upton said in a statement.

“This rule is all pain and no gain," Upton added.

Fellow Republicans Sen. John Vitter (R-La.) and Rep. Lamar Smith (R-Texas) also voiced dissatisfaction with the rule on Monday.

The Tier 3 standards announced by the EPA would lower sulfur content by 60 percent starting in 2017. That's a third lower than the previous ceiling on allowable sulfur.

By 2030, the EPA said, the benefits of the new standards include preventing between roughly 770-2,000 deaths per year and 30,000 respiratory symptoms in children. The rule's impact is equal to taking about 33 million cars off the road, the EPA said.

Sen. Sheldon Whitehouse (D-R.I) applauded the standards on Monday.

“EPA’s new Tier 3 standards are a major victory for public health. It means cleaner gasoline and cleaner vehicles, which will reduce the dangerous air pollution from cars that contribute to ‘bad air days,' " Whitehouse said in a statement.

The EPA and petroleum groups battled Monday over the effects of the change.

The API, for example, said it would hike gas prices by 6-9 cents per gallon, while EPA Administrator Gina McCarthy said it would add only a penny per gallon of gas.

McCarthy also said it would only increase the cost of new cars by roughly $72 in 2025.

As for the timeline, McCarthy told reporters on Monday that the EPA has "listened very closely to small refineries,” and additional flexibilities were provided to them.

Small refineries can get an extension until 2025 to meet the standards. The EPA also added a revised alternative phase-in for heavier vehicles if necessary.

"Providing additional flexibility to small refineries allows them additional time, so their costs can stay down," said Janet McCabe, acting assistant administrator for the EPA's Office of Air and Radiation.

The Tier 3 standards also include a new requirement for vehicle tailpipe emissions, which makes it easier for U.S. automakers to sell the same cars in all 50 states. The requirements follow a California limit that starts in 2017. 

EPA's tailpipe standards will be phased in for model years 2017-2025.

Some automakers hailed the move.

"We commend the agency for understanding the importance of this objective and creating one set of emissions standards for our vehicles nationwide," said Michael Robinson, of General Motors, while adding that the company is still reviewing the specifics.

“EPA's new Tier 3 standards, which treat vehicles and fuels as a system, are a critical step forward in bringing smog-forming vehicle emissions close to zero, said Edward Cohen of Honda North America Inc.  

"Of particular importance is the reduction of sulfur levels in gasoline, which will yield an immediate and cost-effective air quality improvement from vehicles that are already on the road. Honda commends EPA for this rational approach to clean air regulation.”

The API has long warned that the EPA’s rule would create havoc within the industry, potentially driving up the cost of manufacturing gasoline and with negligible effects on air quality.
“They’re presuming a lot if they think this is going to roll out smoothly,” Greco of the API said.
The rule would require a $10 billion up-front industry investment and billions more in subsequent compliance costs, the API argues.

Greco said the API was still slogging through the regulations, which span several hundred pages, and had not yet decided the best course of action. Litigation is among the options on the table.
“We have to review legal options and see if we need to move this to the courts,” he said.

— Ben Goad contributed to this report.

— This story was last updated at 1:32 p.m.