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EPA, Congress share blame for high fuel prices

Bob Tippee
Editor

Congressional oil-price inquisitions target the wrong people. Government officials, not oil-company executives, should have to answer for zooming prices.

As Rep. Edward J. Markey (D-Mass.) on Mar. 12 announced a new grilling of oil executives, the Environmental Protection Agency was raising the costs of gasoline manufacture.

Markey has summoned chief executives of the five largest major oil companies to an Apr. 1 hearing of the House Select Committee on Energy Independence and Global Warming, which he chairs. He'll try to make them look responsible for painful gasoline prices.

EPA, meanwhile, has toughened federal air-quality standards for ozone in a move that will squeeze fuel consumers far more than anything oil executives can do.

By lowering the 8-hr ozone standard to 0.075 ppm from 0.08 ppm, EPA will push new areas of the US into noncompliance.

This will happen as new mandates for renewable fuels, enacted by Congress last December, take effect. Those mandates aggravate ozone pollution. Biodiesel increases emissions of nitrogen oxides. Ethanol puts volatile organic compounds into the air. In sunlight, those compounds form ozone.

So EPA is raising an ozone standard that Congress, by lifting renewable-fuel standards, is making increasingly difficult to achieve.

The problem will be most severe when summertime volatility limits take effect for gasoline. Areas newly out of compliance with air-quality standards because of the new ozone standard will lower gasoline volatility limits or require reformulated gasoline, which doesn't qualify for volatility waivers available to conventional fuel.

To accommodate growing volumes of high-volatility ethanol, refiners will have to reject growing volumes of light gasoline components. This will lower supply as demand rises at the start of driving season, further lifting the costs of making gasoline and raising prices at retail.

EPA says new scientific evidence about health effects forced it to toughen the ozone standard. That evidence is controversial. And continuing improvement in ozone pollution under the existing standard casts doubt on the need to act and wisdom of doing so while gasoline prices are high.

EPA can't worry about gasoline prices, though. It can't by law-a law written by blame-dodgers like Markey.

(Online Mar. 14, 2008; author's e-mail: bobt@ogjonline.com)


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