Gas Blends Provide A Cost-Effective Way To Reduce Smog

Gasoline Blends Are Part Of Clean Air Act Amendments Passed Under George H. W. Bush. A 2006 report from the Department of Energy and the Environmental Protection Agency explained the history and rationale of gasoline blends, which result from both federal and state air pollution controls:

Prior to the CAAA of 1990, types of gasoline differed primarily by octane grade. Gasoline grades were generally the same nationwide and through the seasons with only gasoline volatility differing by region and by season.

During the late 1980s and the 1990s, Congress, EPA, states and other stakeholders realized the strong impact certain motor vehicle fuel properties have on air pollution. Furthermore, controlling various fuel properties was considered a very cost-effective way to reduce vehicle emissions that contribute to air pollution, while providing widespread and immediate benefits. In response to the serious air quality problems, which were occurring across the U.S., Congress, EPA, and many states took a number of actions, which have both resulted in large emission reductions as well as an increase in the number of distinct motor fuels.

The gradual increase in the number of unique fuel types first began in the late 1980s, with the emergence of both new federal and state standards. Beyond the phasing down of lead in gasoline, which began in the mid 1970s, quality controls on gasoline at the federal level remained constant until new volatility controls were first implemented beginning in 1989. In addition, some states began to require oxygenated gasoline in the winter months to reduce carbon monoxide (CO) pollution.

Congress included new federal and state programs in the CAAA of 1990 specifically designed to address our nation's serious air quality issues and the contribution from the mobile source sector. EPA was tasked with developing and implementing new gasoline and diesel programs that would provide significant air quality benefits and support progress in attaining the National Ambient Air Quality Standards (NAAQS). Over a 5-year period from 1990 to 1995, in accordance with the directives in the CAAA, EPA set standards for diesel fuel and gasoline including a requirement for states to introduce wintertime oxygenated fuel in 1992 in certain areas exceeding the CO standards.

In 1993, the nationwide low sulfur (500 parts per million) highway diesel fuel program began, which was designed to reduce the emissions from the on-highway sector of the heavy-duty diesel truck and bus fleet. In 1995, phase 1 of the federal reformulated gasoline (RFG) program went into effect, which was designed to reduce ozone-forming emissions and control harmful air toxics in the nine worst ozone non-attainment areas.

States, with support of stakeholders including the oil industry, began to investigate and consider controls on fuels as a way to support attainment of the NAAQS. States began to evaluate both the existing menu of fuels, including federal RFG, and other potential fuel options. While the CAAA allowed states having ozone non-attainment areas that were not required to use RFG to opt-in to the program, many states selected their own cleaner-burning fuels tailored to meet their emission reduction targets, with most selecting low Reid vapor pressure (RVP) gasoline standards, stopping short of requiring cleaner burning Federal RFG. These are the so-called boutique fuels. [EPA, December 2006]

Reformulated Gasoline Reduces Smog, Which Contributes To Heart Problems, Asthma Attacks, And Premature Deaths. Reformulated gasoline (RFG) is designed to reduce nitrogen oxide and volatile organic compound emissions, which form ozone smog when they come in contact with both heat and sunlight. Ozone causes “increased risk of premature death,” “asthma attacks,” and “increased susceptibility” to heart- and lung-related problems. [American Lung Association, 2011]

CRS: Changing Standards “May Require An Amendment To The Clean Air Act.” From a March 1 Congressional Research Service report:

Producing gasoline that meets federal summer blend requirements and state and federal requirements for certain areas with poor air quality is more difficult than conventional winter blend gasoline. Meeting these standards may limit what components may be used to make gasoline. Some European refiners that can make winter blend U.S. gasoline may not be able to make summer blend gasoline, potentially limiting imports. Some have suggested that relaxing these standards may reduce gasoline costs. This was done briefly in 2005 after Hurricanes Katrina and Rita, which forced closure of refineries and pipelines. Relaxing these standards long-term may require states that use special blends as part of their plan to meet NAAQS [National Ambient Air Quality Standards] to come up with alternative--potentially more commercially costly--means to meet air quality targets. Or, NAAQS requirements themselves could be relaxed, but this would result in greater smog and impose public costs. Either of these actions may require an amendement to the Clean Air Act. [Congressional Research Service, 3/1/12]

Even Without Pollution Regulations, There Would Still Be More Than One Blend Produced. A Task Force convened by the Bush administration to study boutique fuels, composed of Governors or their representatives, the EPA, and the Departments of Energy and Agriculture stated:

Gasoline RVP [Reid Vapor Pressure] is permitted to be relatively high during colder months because the colder temperatures reduce the tendency of gasoline to evaporate and produce emissions of volatile vapors. Also, higher volatility gasoline is generally necessary to support proper cold weather operation of vehicles. Conversely, lower RVP in gasoline is beneficial because warmer weather has the tendency to cause gasoline to evaporate more easily, releasing volatile organic compounds into the atmosphere. It is important to note that industry will make this seasonal transition to support vehicle performance and operational issues, regardless of whether any environmental regulations are in place. [Task Force on Boutique Fuels, June 2006, emphasis added]

AP: Bush Task Force Draft Study Found That Boutique Blends “Are Not A Factor” In Price Increases. On June 23, 2006, the Associated Press reported:

“Boutique” gasoline blends to help states meet clean air rules are not a factor in higher prices as President Bush has suggested, says a draft of a study ordered by the White House.

Although often cited as a reason for volatile gasoline prices, so-called “boutique fuels” have not caused unusual distribution problems or contributed to price increases, the report concludes.

The review was conducted by a task force headed by the Environmental Protection Agency and involving representatives from the 50 states as well as the Energy and Agriculture departments. [Associated Press, 6/22/06, via MSNBC.com]

Task Force: Boutique Fuels Provide “Significant Reduction In Targeted Emissions At Very Low Cost.” The Task Force convened by the Bush administration to study boutique fuels concluded:

It is clear that state fuel programs have provided significant, cost-effective air quality improvements. Any actions to modify the slate of existing boutique fuels or limit a state's ability to adopt fuel specifications should be done in a manner that at least maintains these air quality gains and avoids unnecessarily restricting state authority.

[...]

Historically, implementing a localized fuel quality control strategy can generally occur in a shorter period of time, as compared to other control strategies, and provide immediate environmental benefits. These programs have proven to be very successful in providing significant reductions in targeted emissions at very low cost. State controls on RVP [Reid Vapor Pressure] have been estimated to cost as little as 0.3 cents per gallon to about 3 cents per gallon. [Task Force, June 2006]

CRS: Requiring One Fuel “Might Lead To Higher Pump Prices” In Some Areas, Or More Pollution In Others. A 2006 Congressional Research Service report stated:

Why Not Simply Require One Fuel Across the Country? The existing system has evolved in response to various federal air quality standards, and resulting state standards, local refiner decisions and consumer choices. Further, many of the state formulations were designed to mitigate moderate air quality problems without requiring more stringent and, presumably, more expensive measures. An attempt to group states under one regional or national standard, referred to as “harmonization,” might lead to higher pump prices for areas with less severe ozone problems, or higher emissions in areas with more severe problems. Further, refiners may have made considerable investments in tooling facilities to meet specific local requirements.

Harmonizing Standards Would Be a Complex Process. Competing goals will make harmonizing standards a complex process. Gasoline distribution would likely be more uniform under regional or national standards. But refining costs and consumer price could increase under new standards. Further, air quality could be improved or diminished depending on how standards are combined. Any changes in the U.S. gasoline system will need to take all of these factors into account. [Congressional Research Service, 5/10/06]

President Of Refiners Association Said Limiting Gas Blends “May Be Counter-Productive.” In May 2006, in response to a proposal by the Bush administration to waive EPA regulations on gasoline blends, the president of the National Petrochemical and Refiners Association, Bob Slaughter, testified against changing existing regional fuel specifications that lead to “boutique” fuels because they allow regions to have “more cost-effective” fuels:

Current calls for the reduction of “boutique fuels,” for example, may not provide the supply-relief that many advocates think. NPRA believes that any attempt to limit the number of viable fuels in regions or nation-wide may be counter-productive, and certainly no such change would have a positive impact now or during this summer.

Boutique fuels programs in many cases represent a local area's attempt to address its own air quality needs in a more cost- effective way than with RFG [Reformulated Gasoline]. While boutique fuels are often blamed for episodic price variations during limited supply disruptions in specific regions, their overall impact on local economics is a net positive when compared to a constant requirement for RFG. [CQ Congressional Testimony, 5/11/06, via Nexis]

Study: Regional Differences Allow Certain Areas To Require “Less Costly” Standards. Fox suggested that a study by Harvard University's Erich Muehlegger supported the argument for one blend. That study recommended that regulators “consolidate” blend requirements where possible. But it also found that “Regional heterogeneity allows areas with air emission problems to substantially abate air emissions through strict requirements while allowing areas without air emission problems to use gasoline meeting less stringent (and less costly) standards.” When asked about the Bolling's remarks, Muehlegger explained that if the “prices of all the different blends of gasoline are high, simply removing the regulations will do little to lower gasoline prices”:

My study found that when refineries experience production problems (due to fires or other unforeseen events), the price of gasoline in areas with special blends often rises substantially. This is because gasoline cannot be imported from nearby areas unless those areas also use the special blend. Thus, it is possible to have a localized supply shortage that drives up prices for a short period of time. In fact, in certain cases, the EPA has waived the environmental requirements for local areas experiencing these supply shortages to help lower the price of gasoline.

This tends to be a very local problem, though - high prices due to these regulations are only mitigated if gasoline not meeting the specifications is available elsewhere at a substantially lower price. If the prices of all the different blends of gasoline are high, simply removing the regulations will do little to lower gasoline prices.

On average, these environmental regulations are relatively low cost - my study found that the cost of the regulations to be on the order of 5-10 cents per gallon. [Email to Media Matters, 3/7/12]

Yet Fox Pushes “One Blend” Campaign

Bolling Claimed “One National Blend” Would Be A “Magic Bullet To Bring Gas Prices Down.” From Fox & Friends:

ERIC BOLLING: I have a magic bullet. Jay Carney has said in the past there is no magic bullet to bring gas prices down - but there is. There's an easy one. Here's a Harvard study, you know, you can go through this. Did you know--

BRIAN KILMEADE: Jeremy Lin's?

BOLLING: Not Jeremy Lin's. No, this is Erich -- a professor at Harvard -- Erich Muehlegger. He outlines the different blends of gasoline: there's a winter blend, there's a summer blend, there's an oxygenated, there's a Reid Vapor Pressure, there's a California blend, a Midwest blend, there's an ethanol blend, too much ethanol, too little ethanol. There are literally hundreds of different blends. If you did this, honestly President Obama can do it overnight, sign it, it has to do with the Clean Air Act, but if he signed it and said one national blend for gasoline - you can use it in Chicago, you can use it in San Diego or you can use it in New York City - the price of gasoline would be a dollar lower. One blend, one buck lower. [Fox News, Fox & Friends, 2/23/12]

• Bolling has advocated for one blend at least 6 other times on Fox. [Fox News, Fox & Friends, 2/21/12] [Fox News, America's Newsroom, 2/21/12] [Fox News, America Live, 2/23/12] [Fox News, The Five, 2/23/12] [Fox News, Fox & Friends, 3/1/12] [Fox News, Your World With Neil Cavuto, 3/1/12]

Fox's Carlson: A “Gas Expert Told Us This Morning” That Obama Could “Just Have One Kind Of Blend Of Gas.” After noting that the Obama administration has said there is no “magic bullet” for high gas prices, Gretchen Carlson said:

CARLSON: Could [Obama] have passed the Keystone pipeline?

STUART VARNEY: Would that make a difference to gas prices?

CARLSON: Maybe not imminently, but could it in the future? Could he have done something -- which another gas expert told us this morning on Fox & Friends -- could they just have one kind of blend of gas instead of all these boutique blends. Would that bring the price down? That's something that maybe he could do imminently. [Fox Business, Varney & Company, 2/23/12]

Fox's MacCallum: “Some People Want To See Them Do Away With Those Blends Altogether And Feel That” Would Lower Gas Prices. Fox “straight news” anchor Martha MacCallum stated, “some people want to see them do away with those blends altogether and feel that that make a big difference in terms of gas prices.” [Fox News, America's Newsroom, 2/27/12]