NCPA - National Center for Policy Analysis

"BOUTIQUE" FUELS

May 9, 2006

Government mandates across the United States have spawned more than a dozen categories of special gasolines, known as "boutique" fuels. Each comes in multiple octane grades and varies slightly with the seasons of the year. These requirements strain the nation's overstretched refineries, contribute to high gasoline prices and cause inefficient distribution, says USA Today.

Each day, for example:

  • Millions of gallons flow through pipeline past Atlanta on the way from the Gulf Coast to the Northeast.
  • Little of this fuel can be used in Atlanta, however, because it's a conventional formulation, and the city requires a special kind of gas to meet its need to abate air pollution.
  • Fuel produced in some East Coast refineries, meanwhile, travels out of the region because it's made to meet the requirements of other communities.

These individualized fuels are not wholly without merit, says USA Today. Places such as Southern California, for instance, have intense smog problems that require ultraclean gasoline. But what started as a sound idea has spun out of control as states have rushed to adopt their own fuel requirements.

There are 15 or 16 categories of boutique fuel, depending on how they are counted. Gasoline is becoming like coffee at Starbucks -- unnecessarily complex and pricey, says USA Today.

The state and local fuel mandates are being driven as much by politics and budgetary concerns as by air pollution. They have helped to raise the price of gas by at least several cents a gallon while not always having a positive air quality benefit, says USA Today.

Source: Editorial, "'Boutique' is for clothing -- not for gasoline; States' special requirements raise prices while doing little to clean air," USA Today, May 9, 2006.

 

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