Oil Companies Hate Obama's 'Most Significant Public Health Achievement'

The Environmental Protection Agency unveiled new “Tier 3” standards for passenger cars and trucks today, which will reduce both the tailpipe emissions and lower the amount of sulfur permitted in gasoline starting in 2017. While oil companies claim that the new standards will raise the price of fuel, conservationists and automakers praised the change. The New York Times noted that “proponents of the rule say it will be President Obama’s most significant public health achievement in his second term.”

The final fuel standards will reduce gasoline sulfur levels two-thirds, from 30 to 10 parts per million (ppm). Reducing sulfur in gasoline enables vehicle emission control technologies to perform more efficiently. The EPA’s actions to improve fuel economy and reduce greenhouse gases, combined with new low-sulfur gas, will result in average fuel savings of more than $8,000 by 2025 over a vehicle’s lifetime. Every vehicle on the road benefits from the new fuel standards.

At the current level, sulfur reduces the effectiveness of the catalytic converter, which eliminates nitrogen oxides, hydrocarbons and carbon monoxide. What’s more, sulfur compounds in fuel can damage metals and catalysts in engines and fuel cells, to say nothing about how their combustion releases toxic gases that contribute to acid rain and smog. Lower-sulfur gasoline will reduce as much pollution from the current vehicle fleet as taking 33 million cars off the road.

By 2030, once the standards are fully implemented, the EPA projects that they’ll prevent between 770 and 2,000 premature deaths, 2,200 hospital admissions and asthma-related emergency room visits, and 19,000 asthma exacerbations. The American Lung Association praised the new standards as “life-saving.”

“Cars, light trucks, and SUVs are major sources of pollution that can harm the health of our most vulnerable family members and neighbors, including those who suffer from asthma, lung and heart disease, as well as those who live, work and go to school near major roadways,” Harold Wimmer, national president and CEO of the American Lung Association, said in a press release. “We thank the Obama Administration and Environmental Protection Agency for putting these critical public health safeguards in place to protect communities across the nation.”

The environmental community was pretty happy about the new standards, too.

“Every metropolitan area in the country will benefit from it,” said Bill Becker of the National Association of Clean Air Agencies. “We know of no other air pollution control strategy that provides as substantial, cost-effective and immediate emission reductions as Tier 3. It’s expected to reduce nitrogen oxide emissions—which cause smog and soot—by over 260,000 tons, literally overnight, at a cost of less than a penny a gallon.”

The auto industry also supports Tier 3, because it essentially brings the whole country up to the standards already in place in California, which simplifies things for automakers. “Today, the EPA took steps to harmonize regulations to improve air quality by issuing its final rule on . . . tailpipe emission standards,” John Viera, Ford’s director for sustainability and vehicle environmental matters, told the Washington Post .

General Motors touted the new fuel standards: “We support the provisions for lower sulfur levels in fuels,” said Mike Robinson, GM’s vice president of sustainability and global regulatory affairs. “Since the vehicle emission system and the fuel used act together in determining the emissions performance of the vehicle, automakers need cleaner fuels to achieve the lowest possible emissions. In addition, cleaner fuels provide the added benefit of reducing emissions immediately across the entire on-road fleet.”

Predictably, one group that wasn’t crazy about the news was the American Petroleum Institute, a national trade association representing America’s oil and gas. Those are the companies that will be required to purchase new equipment to refine the new gas with lower sulfur, and have said that doing so might raise the cost of gasoline by as much as 6 to 9 cents per gallon.

“Besides the enormous costs and negligible environmental benefit, we are also concerned about the timeline of EPA’s new rule,” API Downstream Group Director Bob Greco said. “The rushed timeframe leaves little opportunity for refiners to design, engineer, permit, construct, start up, and integrate the new machinery required.”

But the EPA doesn’t think it’s going to be a problem. Of the 108 refineries they analyzed in a peer-reviewed study, they found 40 were already meeting the 10 ppm standard, and 67 would be able to comply with modifications to their existing equipment. That leaves only one refinery that would be required to install a new gasoline hydrotheater.

The EPA is also allowing for a delayed start for smaller refiners, and credit averaging, banking, and trading, to help spread out any financial hit the refineries might take. Their report also points out that refining is a pretty negligible percentage of the cost of gasoline, when compared to something like the cost of crude oil. Indeed, US refineries have always and continue to experience "healthy margins" on the fuels they make,” the report states. So don’t cry for them.

The sulfur standards will cost less than a penny per gallon of gasoline on average once the standards are fully in place in 2025, according to the EPA. Overall, that's a cost of about $1.5 billion each year.

But the monetized health benefits of Tier 3 standards are projected to be worth between $6.7 billion and $19 billion. The EPA projects that for every dollar spent, $13 are saved in health care costs.

Perhaps most remarkably of all, even though Tier 3 is an environmental regulation put forward by Obama in a 2010 presidential memorandum, Republican lawmakers have endorsed the law. Gov. Gary R. Herbert of Utah, a conservative Republican, said that the smog around Salt Lake City rivaled LA. “We’ve got to find a way to eliminate that with cleaner fuels and cleaner autos,” he said in an interview with the New York Times. “Dirty air is not a partisan issue. The fact that we have technology that’s available—cleaner burning fuels, cleaner burning autos—we ought to embrace that.”

While it seems intuitive that breathing shouldn't be a partisan issue, hearing something so sensible is rare—a real breath of fresh air.