Most Americans pulling into gas stations are focused on the pump price, not the fuel’s content. However, sulfur content and its impact on vehicle emissions and public health is worth their consideration.
Roughly half of us in the United States live in areas where air quality doesn’t satisfy national standards, and a big reason why is the pollution from our 240 million registered vehicles. Fortunately, the Environmental Protection Agency has proposed a solution, the Tier 3 standards, that will reduce smog and soot pollution that is especially harmful to children and the elderly. The standards, open to public comment until July 1, will also bring economic benefits; the EPA estimates that by 2030 the monetized health benefits of the Tier 3 standards will be between two to seven times the costs.
Following on the success of the 2004 Tier 2 rule, which decreased sulfur content of fuel from 300 parts per million (ppm) to 30 ppm, Tier 3 aims to further reduce sulfur levels to 10ppm in 2017, and further cut vehicle emissions. Ultra-low sulfur gas will also help automakers meet more robust fuel economy standards adopted last year for U.S-made vehicles.
Comparable low sulfur fuel standards already exist in Japan, Australia, South Korea and the European Union. Even China is scheduled to conform to the 10 ppm standard by 2017. Although California leads the U.S. in implementing sulfur reductions, it is time for the rest of the country to catch up.
Ceres and members of its company network, Business for Innovative Climate & Energy Policy (BICEP), have written the EPA to voice support for the Motor Vehicle Emission and Fuel Standards. General Motors, Honda, Mercedes Benz and other automakers also support the Tier 3 standards, as have a wide range of other stakeholders, including the auto emissions control industry, state and local officials, and public health, labor, faith and environmental groups.
Supporters also include investors like Wespath Investment Management, which manages $19 billion in assets. “We believe the standards will help to create and/or retain the shareholder value of our investments, while also offering environmental and social benefits – a powerful combination,” Anita Green, manager of socially responsible investing at Wespath, testified at a public hearing on the standards in Chicago.
The Tier 3 standards will have significant economic upsides, including job creation gains and health benefits. Refinery upgrades are expected to generate over 24,000 installation jobs, and 5,300 permanent jobs. The auto emissions control industry will also likely benefit from the new standards.
The Tier 3 standards will also help avoid 22,000 asthma attacks, 3,200 hospital admissions, and 2,400 premature deaths each year. By requiring automakers to produce cleaner gasoline, Tier 3 would reduce nitrogen oxide emissions nationwide by more than 260,000 tons annually – the equivalent of taking 33 million cars off the road.
The only real opposition to the standards comes from the American Petroleum Institute (API) and its allies. API claims that the standards will result in an increase in gas prices because of increased refinery costs. This is refuted by a recent independent study by Navigant Consulting. The study’s findings show that it is highly unlikely that Tier 3 will have any impact on the retail price of gasoline, since the price of crude oil is by far the most important determinant of retail prices. Tier 2, which had refinery costs twice those projected for Tier 3, had no material effect on retail prices.
Rather than delaying the rule, as API is seeking, EPA should adopt the standards this year so that we can ensure the health and economic benefits are realized starting in 2017. We can’t afford to wait.
Carol Lee Rawn is transportation program director at Ceres
Photo credit: Car Pollution/shutterstock