The Obama administration is expected to propose new rules today that would slash the amount of sulfur in gasoline, one of the most significant steps the administration can take this term toward cutting air pollution, people with knowledge of the announcement said.
The new rules would bring the rest of the country's sulfur standards in line with California's gasoline program. The oil industry has warned of resulting price increases and has been joined by members of Congress from oil states in criticizing the standards as onerous with few health benefits in return. Environmentalists have countered that the rules would improve public health considerably.
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The move comes as Maryland legislators move ahead with a plan that would boost Maryland's gas tax by almost 4 cents a gallon in July — and roughly 16 cents by 2015. The measure would raise an estimated $4.4 billion over six years for road and transit projects.
Pumping gas Thursday night at a Baltimore BP station at the corner of Mount Royal Avenue and St. Paul Street, Adam Farra said he didn't mind paying Maryland's proposed gas tax increase, since it would go toward infrastructure, and the potential extra costs resulting from the EPA regulations, since they could lead to cleaner air.
"Those are all things that I'm happy to pay for," said Farra, 27, of Baltimore.
The rules to be proposed by the Obama administration would place a cap of 10 parts sulfur per million parts, compared with 30 now. Once finalized, the rules would go into effect in 2017.
Reducing sulfur in gasoline helps vehicles' catalytic converters work more efficiently, which means they remove more of the nitrous oxides, volatile organic compounds and carbon monoxide that exacerbate respiratory ailments. The auto industry and many states back the introduction of the new rules.
"Using lower-sulfur gasoline in cars currently on the road will reduce as much pollution as taking 33 million cars off the road," said Paul G. Billings, senior vice president of the American Lung Association. "This pollution triggers asthma attacks, worsens lung and heart health, and can even lead to early death."
The oil industry argues that the proposed standards would make refineries use more energy, driving greenhouse gas emissions higher. It contends that outfitting refiners to comply with the new rules could drive up the price of gasoline by as much as 9 cents a gallon.
"There is a tsunami of federal regulations coming out of the [U.S. Environmental Protection Agency] that could put upward pressure on gasoline prices," said Bob Greco of the American Petroleum Institute. "EPA's proposed fuel regulations are the latest example. Consumers care about the price of fuel, and our government should not be adding unnecessary regulations that raise manufacturing costs, especially when there are no proven environmental benefits. We should not pile on new regulations when existing regulations are working."
The proposed rules would give flexibility to the oil sector to meet the new limits, including a longer lead time for smaller refineries.
California has had a cap of 20 parts sulfur per million since 2011, but refineries routinely deliver fuel at eight or nine parts per million, said Stanley Young, spokesman for the Air Resources Board. The lower sulfur concentrations have led to "substantial reductions in air pollution" and added 3 to 5 cents to the cost of a gallon of gasoline, Young said.
At the Baltimore BP station, a gallon of regular gas was $3.89 on Thursday. Residents filling up said they were frustrated with the high cost of gas, but some placed much of the blame for the prices on financial speculators betting on the price of oil and gas companies, which have been posting record-breaking profits in the billions of dollars for several years.
"Oil price markets have been crazy for a long time, and there doesn't seem to be a good reason for it," said Farra, who paid more than $51 to fill up the tank of his sedan. "Nobody seems to want to attribute gas prices to that."
Beverly Robinson, a Baltimore County resident, said she was also upset about the profits of gas companies but thought the proposed state gas tax was too much.
"I think the American people need a break," said Robinson, 51. "It feels like they should be able to get their money somewhere else."
Under Maryland's plan, the flat per-gallon tax would be kept in place and tied to inflation. A new 1 percent sales tax would take effect in July, rise to 2 percent in 2015 and 3 percent in 2016. Further rate increases would be mandated if Congress did not give states authority to tax purchases made on the Internet.
Josh Isaacs, who bought a Nissan Titan pickup truck from his uncle's estate a couple of years ago, is now considering selling it because of its poor gas mileage.
"It costs 80 bucks to fill it," said Isaacs, who estimates he spends $300 a month on gas even though he lives and works in the city.
"My car payment is actually lower than what I spend on gas."
Like the other Baltimoreans who stopped by the gas station, though, Isaacs, 29, criticized the profits of gas companies.
"I think it's a money-making scheme," he said.