NCPA - National Center for Policy Analysis

New EPA Regs Will Punch A Hole In Motorists Wallets

September 15, 1999

Over the next few years, a spate of new regulations from the Environmental Protection Agency will hit gasoline refiners and marketers with substantially higher costs and motorists with sharply higher prices at the pump.

  • The regulations could raise retail gasoline prices nationwide to the level of California's highly regulated market -- where gasoline sells for as much as 60 cents a gallon more than in the rest of the nation.
  • But if the full costs cannot be passed along to consumers, some small refiners say they will go out of business.
  • A proposed rule which would reduce the sulfur content of gasoline will cost the auto and oil industry together $3.4 billion to $4.4 billion -- necessitating price increases of $100 on new cars and $200 on sport utility vehicles and pickup trucks.
  • While the sulfur reduction rule is the most contentious, the petroleum industry faces an array of challenges and increased costs coming, not just from the EPA, but from other federal government departments as well.

On the state level, the California Air Resources Board will decide this month whether to require a redesign of those familiar red gas cans used to fill auto tanks and lawn mowers. The board claims they are a source of pollution and wants to add devices that automatically shut off the flow of gas to prevent over- filling and close the spout to keep vapors from releasing.

The rules would also ban the vents that make gas easier to pour and force manufacturers to limit how much vapor escapes through the walls of the cans.

The changes could double the cost of the gas cans -- which now sell from $5 to $20.

Sources: Campion Walsh, "The Regulatory Toll," Wall Street Journal, September 13, 1999; and Jayne O'Donnell, "California May Require Less Polluting Gasoline Containers," USA Today, September 10, 1999.


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