Industry Tells EPA ‘Withdraw Sulfur Rules’ - July 1, 2013

API says Tier 3 is a “reckless” and “unnecessary” regulation that won’t do much to improve air quality and will impose about $10 billion in new capital costs on refiners, increasing gasoline manufacturing costs by between six and nine cents per gallon.

API group director for downstream and industry operations Bob Greco told reporters late last week that the industry group will soon submit comments on the EPA proposal.

The following day, AFPM said it’s joining API in opposing “discretionary rulemaking” and said Tier 3 was a threat to refiners’ existence. AFPM President Charles T. Drevna said the rules would force refiners to invest in energy-intensive sulfur reduction equipment that will actually increase greenhouse gas emissions.

Refiners have already dramatically reduced sulfur levels in gasoline by 90 percent since 2004, AFPM says.

The long-awaited Tier 3 pollution standards, proposed in March, would require refiners to reduce gasoline sulfur levels by more than 60 percent — down to 10 parts per million in 2017 from the current standard of 30 ppm.

The EPA says the proposal will slash emissions of a range of harmful pollutants that can cause premature death and respiratory illnesses, including reducing smog-forming volatile organic compounds and nitrogen oxides by 80 percent, establishing a 70 percent tighter particulate matter standard, and reducing fuel vapor emissions to near zero. The proposal will also reduce vehicle emissions of toxic air pollutants, such as benzene and 1,3-butadiene, by up to 40 percent.

While the agency says the sulfur standards will cost refineries less than a penny per gallon of gasoline on average once the standards are fully in place, industry groups and companies including Shell and Marathon Petroleum oppose the low-sulfur gasoline rules and say they will create billions of dollars in compliance costs but provide few benefits.

Also late last week, German lobbying froze an EU deal imposingstricter carbon emissions limits on new cars from 2020. Various sources said Germany is trying either to delay the deal or to kill it completely. Earlier reports said that the EU had managed to reach a compromise deal, despite German objections.