New Obama gas initiative could force rise in gas prices

posted at 10:31 am on March 29, 2013 by Ed Morrissey

In a year that has seen gas prices shooting upward already, a new EPA policy that makes fuel more expensive will not find a warm embrace with the public. Nevertheless, the Obama administration will announce today a new set of emission regulations that will in essence force all 50 states to comply with California’s standards for sulfur and other components of refined fuel. The White House claims this won’t add any cost to gasoline, but the oil industry strenuously disagrees:

The oil industry, Republicans and some Democrats had pressed the EPA to delay the rule, citing higher costs. An oil industry study says the rule could increase gasoline prices by 6 to 9 cents per gallon. …

But the head of American Fuel and Petrochemical Manufacturers, Charles Drevna, said in an interview Thursday that the refiners’ group was still unclear on the motives behind the agency’s regulation, since refining companies have already spent $10 billion to reduce sulfur by 90 percent. The additional cuts, while smaller, will cost just as much, Drevna said, and the energy needed for the additional refining could actually increase carbon pollution by 1 to 2 percent.

“I haven’t seen an EPA rule on fuels that has come out since 1995 that hasn’t said it would cost only a penny or two more,” Drevna said.

The auto industry might be an ally for the White House in this case:

The so-called Tier 3 standards would reduce sulfur in gasoline by more than 60 percent and reduce nitrogen oxides by 80 percent, by expanding across the country a standard already in place in California. For states, the regulation will make it easier to comply with health-based standards for the main ingredient in smog and soot. For automakers, the regulation allows them to sell the same autos in all 50 states.

The 6-9-cent range comes from an API study on the impact on refineries in the US, but the EPA says that study misses the point that almost all of these refineries already meet the standards — and that some which don’t in all cases produce gasoline for California which does:

A senior administration official said Thursday that only 16 of 111 refineries would need to invest in major equipment to meet the new standards, which could be final by the end of this year. Of the remaining refineries, 29 already are meeting the standards because they are selling cleaner fuel in California or other countries, and 66 would have to make modifications.

That’s still a lot of refitting, and part of the reason why gas prices jumped so high this year has been maintenance down time.  The US operates near full capacity at all times to keep up with demand, one of the problems created by opposition to building new refineries, which would already have this technology in place.  If 66 refineries need “modifications” and another 16 need major overhauls to comply within four years, that means that 74% of our refineries will be experiencing additional down time during that period.  That sounds like a recipe for shortages and price shocks.  And so far, prices haven’t come down a lot after the round of supply issues of this year.


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He sure knows how to increase costs and hurt job growth.

CW on March 29, 2013 at 10:32 AM

The White House claims this won’t add any cost to gasoline

Nope. And the healthcare law won’t add one dime to the deficit. Or insurance premiums.

Obama is awesome.

Gatsu on March 29, 2013 at 10:34 AM

But we’re paying so little for gas right now.

/

Doughboy on March 29, 2013 at 10:41 AM

Now might be a good time for the GOP to finally pin high gas prices on Obama, the EPA, and the environmentalists. They coud also link this price increase to Keystone; if the EPA wants to jack up rices we need more Canadian oil to bring them down again.

Charlemagne on March 29, 2013 at 10:42 AM

Big deal, Americans are all fat anyway, we could use the exercise.

And it’s not as if there is a macroeconomic problem here, for example food wholesalers won’t charge more because it costs them more to ship.

Bishop on March 29, 2013 at 10:42 AM

Any gasoline price increases because of Obama will be dismissed as greed on the part of Big Oil. If people complain too much, expect Democrats to start an ‘investigation’ to keep the lie alive.

Liam on March 29, 2013 at 10:42 AM

One more issue to use to purge Dems from red states and those purple states that still have some common sense.

BuckeyeSam on March 29, 2013 at 10:43 AM

The Gaia lobby.

Oil Can on March 29, 2013 at 10:43 AM

a new set of emission regulations that will in essence force all 50 states to comply with California’s standards

That’s like having an arsonist setting standards for fire safety.

fogw on March 29, 2013 at 10:44 AM

Conservative TV spot:

Increased prices thanks to Barack and his out of control EPA

redguy on March 29, 2013 at 10:44 AM

The most clueless administration ever.

sadatoni on March 29, 2013 at 10:50 AM

and…”if you like your plan you can keep your plan”…

PatriotRider on March 29, 2013 at 10:54 AM

He is the DOTUS………

Regardless of why……he just is.

PappyD61 on March 29, 2013 at 10:55 AM

Eliminate the EPA…shut it down…send all it’s employees packing…

PatriotRider on March 29, 2013 at 10:55 AM

It seems like for the past 10 to 15 years California has been forcing the other 49 states to comply with their emission standards. From small 2 cycle engines to full size V-8 engines they all have a label that they either meet California emissions and are okay or they do not meet California standards and they are not allowed to be sold in or operated in California. My little 20 HP John Deere garden tractor has a label stating that it is compliant with California EPA emission regulation number BR-549 and it is 10 years old.

fourdeucer on March 29, 2013 at 10:56 AM

I love my country…but I hate my government…

PatriotRider on March 29, 2013 at 10:56 AM

Someday all these a**holes will be pictured on wanted posters…

PatriotRider on March 29, 2013 at 10:58 AM

The White House claims this won’t add any cost to gasoline, but the oil industry strenuously disagrees.

Hey, once prices do start spiking, 47% of the country will blame the EEEEEEEEEEEEEEEVIL oil companies for the price spike, not Obama.

Bitter Clinger on March 29, 2013 at 10:58 AM

All part of Obama’s plan – nothing is by accident.

jake-the-goose on March 29, 2013 at 10:59 AM

The most clueless administration ever.

sadatoni on March 29, 2013 at 10:50 AM

I think I know what you mean – but your statement is wrong.

This administration knows EXACTLY what they are doing – EXACTLY

jake-the-goose on March 29, 2013 at 11:00 AM

These are evil people, they will push the envelope until forcibility stopped. We are reaching that point.

whbates on March 29, 2013 at 11:00 AM

It seems like for the past 10 to 15 years California has been forcing the other 49 states to comply with their emission standards.

They could always not sell in California; free market and federalism at work here, right? Aren’t the states supposed to be test tubes of democracy? What’s good spreads and what’s bad stops? So much for that idea.

Making it national is probably not great for the other 49, but fungibility will be good for Californians, at least. The rest of you get a taste of our medicine!

calbear on March 29, 2013 at 11:02 AM

Many trucking companies refuse to drive into California.
Gee, why is that?
These types of regulations will stifle ALL parts of the economy.
EVERYONE, especially the poor, will suffer.

Badger40 on March 29, 2013 at 11:08 AM

They could always not sell in California; free market and federalism at work here, right? Aren’t the states supposed to be test tubes of democracy? What’s good spreads and what’s bad stops? So much for that idea.

Making it national is probably not great for the other 49, but fungibility will be good for Californians, at least. The rest of you get a taste of our medicine!

calbear on March 29, 2013 at 11:02 AM

That’s not reality, though.
Consider educational textbooks? Most are aligned toward Texas standards. Bcs Texas advocates the entire state use the same textbooks.
And they make up a large part of the companies’ business.
Probably the same with CA.
This IS capitalism at work. Companies developing products that are in line with the majority of their sales.
For better or for worse.

Badger40 on March 29, 2013 at 11:11 AM

But who cares about that, A Republican said wetbacks!

sandee on March 29, 2013 at 11:14 AM

IMF calls for higher gas taxes in the U.S.

BallisticBob on March 29, 2013 at 11:04 AM

Another $1.33 tax per gallon on an already way over taxed, regulated and falsely maligned commodity.

fourdeucer on March 29, 2013 at 11:15 AM

These are evil people, they will push the envelope until forcibility stopped. We are reaching that point.

whbates on March 29, 2013 at 11:00 AM

We’ve got a ways to go. Since the left never stops however, you can be guaranteed that they will eventually use force against the public and will begin to deny basic rights.

If there’s one thing about the left that’s their Achilles’ heel it’s their constant march towards total power and subjugation. They always end up imprisoning and killing people … lots of people.

darwin on March 29, 2013 at 11:19 AM

Naturally. By design, only the uber rich and the corporate lovers of fascism stand to benefit from this administrations nefarious plans. “All you little people? Pfffft. Who cares? You are just grist for our mills. Enjoy your mediocre existences, because you’re lucky we allow you to live.”

Signed, crony capitalists and the uber rich/elite.

totherightofthem on March 29, 2013 at 11:24 AM

If you believe covering pre-existing conditions and expanding coverage won’t increase health insurance costs, you just might believe increasing restrictions on fuels won’t increase costs.

What is it about liberals and real-world math???

taznar on March 29, 2013 at 11:28 AM

Here in Maryland the DEMS are pushing through the state senate to add 23.5 cents to the gas tax, which will adjust for inflation. Now this. WTF is it with DEMS and raising taxes???!!! Please …Obi-Wan Kenobi…you’re my only hope!

SPGuy on March 29, 2013 at 11:29 AM

The man is ’0-13′ in pickling and investing tax dollars in alternative industry programs/industries like Solyndra, all of which went bankrupt. He does not believe in the free market system that drives technology & innovation, & he believes the only way to defeat that system is to ‘stack the deck’ by ‘inflicting’ ‘negative reinforcement’ on/against that system. Obama knows that in order to FORCE the American people to embrace his and Al Gore’s ‘world’ of alternative energy he has to make the current energy options infinitely more expensive and painful to choose/use.

easyt65 on March 29, 2013 at 11:40 AM

Now might be a good time for the GOP to finally pin high gas prices on Obama, the EPA, and the environmentalists. They coud also link this price increase to Keystone; if the EPA wants to jack up rices we need more Canadian oil to bring them down again.

Charlemagne on March 29, 2013 at 10:42 AM

Please! The GOP doing that. Ain’t gonna happen. Remember under Bush when gas hit $3.00 the DEMS held hearings and demanded to know why Big Oil and Cheney where getting rich off the backs of middle class people. Under Bush gas prices where above $3.00 for 17 months of his 8 year term. Under Obama in just one term, it has been above $3.00 for 22 months. This year we have been hovering around $3.70-4.00, in the middle of winter for months and not a peep from the press or the GOP. Expect nothing. Expect to get screwed.

SPGuy on March 29, 2013 at 11:45 AM

Obama is an azz
Full of hot gas
His is not a game
All goes into flame
Don’t ignore the jackass

Schadenfreude on March 29, 2013 at 12:13 PM

one more issue to use to purge Dems from red states and those purple states that still have some common sense.

BuckeyeSam on March 29, 2013 at 10:43 AM

ROFLOL. What makes you think this will change anything. Congress (dems & pubs) ceded to the EPA long ago and has made no effort in reigning them in. So while this may purge red and purple state dems it won’t change anything when it comes to stopping the big government power grab by the EPA. I am loathe to say it but it will take more than the ballot box to change this.

chemman on March 29, 2013 at 12:18 PM

Here in AZ, most of our gas comes from California refineries anyway – but I’ll bet they still jack the price.

That’s not an indictment of the evil oil companies – they’re going to have to offset the cost of the upgrades, and when the output of the refineries drops during the retrofit, prices will go up.

Hill60 on March 29, 2013 at 12:26 PM

SPGuy on March 29, 2013 at 11:45 AM

Remember – Obama claims that higher gas prices are a sign of economic recovery.

Hill60 on March 29, 2013 at 12:29 PM

The White House claims this won’t add any cost to gasoline

Excuse me? Maybe Barry can tell me why I’m paying 60-70 cents MORE per gallon of Kalifornia gasoline than I pay when I visit Arizona.

GarandFan on March 29, 2013 at 12:46 PM

ROFLOL. What makes you think this will change anything. Congress (dems & pubs) ceded to the EPA long ago and has made no effort in reigning them in. So while this may purge red and purple state dems it won’t change anything when it comes to stopping the big government power grab by the EPA. I am loathe to say it but it will take more than the ballot box to change this.

First, it’s “reining”. and “more than the ballot box”? I presume you don’t mean the Koch brothers, but something along the lines of an AR-15? And for what exactly? Because you’re upset the (Nixon-created) EPA, is putting out regulations that cut pollution? Awesome.

Please all of you keep posting. Please. ‘Cause it’s the crazy-talk on here that percolates down into GOP talking points and memes that come out in the debates or speeches, and then us Democrats get to make ads with it, and kick your butts by over 100+ electoral votes – again.

So please, proceed.

inklake on March 29, 2013 at 12:51 PM

Isn’t it time for a gay marriage thread?

bw222 on March 29, 2013 at 1:03 PM

Excuse me? Maybe Barry can tell me why I’m paying 60-70 cents MORE per gallon of Kalifornia gasoline than I pay when I visit Arizona.

GarandFan on March 29, 2013 at 12:46 PM

My guess is that part of the answer to that question needs to come from Gov. Moonbeam. But Kalifornia gas pumps have such neat nozzles. That has to be worth something.

bw222 on March 29, 2013 at 1:07 PM

New Obama gas initiative could WILL force rise in gas prices

No doubt about it. Leftists wanting to pry our fingers off of our individual vehicles to encourage us to use alternate forms of transportation. Private vehicles provide far too much personal independence and should only be reserved for use by our political and financial elite class.

hawkeye54 on March 29, 2013 at 1:12 PM

Maybe Barry can tell me why I’m paying 60-70 cents MORE per gallon of Kalifornia gasoline than I pay when I visit Arizona.

State by state taxes added to gasoline purchases should be addressed to state government. The bluer the state the more they must get their share of gasoline purchases to pay for their wild spending, not necessarily connected to highway spending, for which taxes on gasoline is supposed to be used.

hawkeye54 on March 29, 2013 at 1:14 PM

These are evil people, they will push the envelope until forcibility stopped. We are reaching that point.

Regrettably, by force is the only way they will be stopped. Nothing but direct force will deter them from their actions.

hawkeye54 on March 29, 2013 at 1:16 PM

It rules like this that come back and bite us every time. What this will cause is higher transportation costs for those who ride public transit. So, when those increases are hit, the poor complain about it (and rightfully so). The government then goes back and make the middle class absorb another tax increase.
This is the vicious cycle that has been created in America. Effect the poor enough and the upper and middle classes will have to bear the burden. When does it stop? The GOP should ask the poor if they are okay with this because they aren’t going to be subsidized for this increased cost.

djaymick on March 29, 2013 at 1:16 PM

In a year that has seen gas prices shooting upward already, a new EPA policy that makes fuel more expensive will not find a warm embrace with the public.

The American sheeple will look to the media, who will blame it on the Republicans. The zombies will nod, and repeat the mantra thusly.

squint on March 29, 2013 at 1:40 PM

Together We Thrive™ 2.0
–bayam

tom daschle concerned on March 29, 2013 at 1:48 PM

Really? California? THAT’s the state they want to emulate? One of the WORST states in the union?

Nothing peeves me most than listening to an add that ends with the words “The State of California warns that this product may cause cancer of birth defects”. I always have the same thought: what the #@*& do I care about what the State of California thinks?!

When do we officially change the books to reflect the ” United State of America”? Because the left has all but destroyed federalism, and the younger generations don’t even have a clue what federalism means. They think we are a “democracy”.

ptcamn on March 29, 2013 at 3:25 PM

As usual, poorer folk and those on fixed incomes hardest hit.

I don’t understand why Republicans don’t use the disparately greater impact of Obama’s environmental/energy agenda against him in appeals to these voters. They need to see benefits from smaller government that accrue directly to them. Reducing regulations and their costs is one of them.

novaculus on March 29, 2013 at 5:13 PM

It’s almost like he means to do harm, isn’t it?

jnelchef on March 29, 2013 at 6:29 PM

Gasoline sales per day range from the early 2000s high of about 62 million gallons to the roughly 30 million gallons today. That means a 9 cent boost in retail gasoline prices at today’s consumption amounts to a $98 billion cost to consumers. A piddly 1 cent per gallon increase will cost consumers over $10 billion per year when we’re already seriously hurting.

No, it won’t be barely felt at all.

{^_^}

herself on March 30, 2013 at 5:41 AM