NCPA - National Center for Policy Analysis

$12 Billion Environmental Protection Agency Regulation

March 19, 2014

A recent study indicates that the U.S. Environmental Protection Agency's (EPA) latest gasoline regulation will cost $12 billion, says Justin Sykes of Americans for Tax Reform.

While the EPA is claiming that its new gasoline regulation on the amount of sulfur per gallon will increase gas for Americans by only one cent, a study by Baker & O'Brien Incorporated indicates that that number is completely off base.

  • According to the study, gas prices will potentially increase nine cents per gallon, not one cent.
  • Additionally, the rule creates $10 billion in capital costs and $2.4 billion in annual compliance costs.

The $10 billion in capital costs is based on the changes that refineries would have to make to their controls and operations.

  • Looking at individual refineries, the study found that 24 refineries would have to install and upgrade new fluid catalytic cracker (FCC) feed hydrotreaters, 13 would have to install new FCC gasoline hydrotreaters, and 33 would have to expand and upgrade their current FCC gasoline hydrotreaters.
  • These costs will be passed on to consumers and gas prices will increase by six to nine cents per gallon.

Because the rule requires an increase in hydrotreating operations, that increase will actually lead to higher greenhouse gas emissions, despite the EPA's claim that the rule helps air quality.

Source: Justin Sykes, "New EPA Gasoline Regulation Will Cost $12 Billion," Americans for Tax Reform, March 11, 2014.


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