NCPA - National Center for Policy Analysis

The Many Varieties Of Gasoline

May 1, 2001

Motorists angered by the current run-up in gasoline prices may want to keep in mind that refiners are obliged to concoct many different varieties and blends of gasoline to comply with a dozen different clean air requirements. Those requirements vary from state to state and even county to county -- and are a factor in the higher prices.

  • The distribution difficulties caused by this patchwork of gasolines is compounding a national scarcity of refinery, pipeline and storage capacity.
  • Under 1990 amendments to the Clean Air Act, fuels formulated for Oregon can't be sold in California, while areas such as Chicago and Detroit are islands in the fuel system requiring special "designer" gasolines -- and even between Chicago and St. Louis, a distance of just 300 miles, four different grades of gasoline are required.
  • This balkanization of gasoline products has been further complicated by political pressure to incorporate ethanol -- a corn derivative promoted by powerful Midwest agribusinesses.
  • Finally, no major new refinery has been built since 1976 and the number of refineries has shrunk from 315 to 152 -- largely because the rate of return on refinery operations has been only 4 percent for 15 years, due to costly environmental requirements.

Experts say that one way to simplify the many gasoline mixes is to create national or regional formulas -- making it cheaper to make gasoline and to shift surpluses from city to city to meet sudden shortages.

Industry analysts also recommend easing environmental regulations on the manufacture of gasoline to encourage refinery construction.

Source: Peter Behr, "Kicking the Gasoline 'Cocktail' Habit," Washington Post, April 29, 2001.


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