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NPRA Urges EPA: Don't Play "Russian Roulette" With Gasoline Supply

Washington, D.C., August 2, 1999 —National Petrochemical and Refiners Association President Urvan Sternfels warned EPA today that its proposal for swift and severe reductions in gasoline sulfur comes dangerously close to playing a game of "Russian roulette" with America's gasoline supply. Sternfels expressed that concern as part of NPRA's comments on the gasoline sulfur proposal which were filed with the agency today. "NPRA is anxious to participate in a serious, mutual effort with EPA to construct a more workable approach" Sternfels added.

The NPRA characterized the EPA proposal as an inflexible national mandate which saddles consumers with the costs of an unnecessarily expensive approach to reducing sulfur in gasoline. "EPA's proposal goes too far too fast, and it endangers both our gasoline supply and the viability of the refining industry," Sternfels said.

NPRA cited the severe economic conditions facing the refining industry and the high costs of the EPA proposal as factors which will make it extremely difficult for the industry to comply with EPA's plan in the timeframe proposed. Because many refiners may be unable to make the mandated investments, NPRA believes that implementation of the EPA proposal threatens gasoline shortages similar to those now being experienced in California. "Market disruptions seen in California this year will be played out nationwide if the plan is implemented as proposed," NPRA's comments warn.

"It is time for EPA to inject a note of realism into its technology analysis," Sternfels warned. He cited the wildly optimistic assumptions about the availability of commercially unproven desulfurization technology which EPA relies on to justify the costs and practicality of its proposal. "Unfortunately, the refining industry will have to try to comply with EPA's plan in the real world, where these technologies remain unproven. NPRA also believes in miracles, but not in the realm of and as a basis for sound public policy," he continued.

Underscoring the need for more time and flexibility as part of any final rule, Sternfels said, "Significant sulfur reductions are achievable if the ultimate rule provides a workable banking and trading program and establishes a realistic timeframe in which new technologies can be proven and made available throughout the industry. Adequate time and flexibility are crucial elements missing in the EPA proposal," he continued.

Stressing the entire refining industry's need for a workable gasoline sulfur proposal, Sternfels said, "EPA must cure the current proposal's deficiencies and develop a final rule which helps every refiner meet the new sulfur requirements. It is certain that we will need all of our gasoline production capacity to meet projected future demand."

NPRA also cautioned EPA that the proposal in its current form will not allow refiners to deal with necessary maintenance and other repairs and outages which occur during routine operation of the refining system. "The current high utilization rate of U.S. refineries leaves little room for error, and the new restrictions on sulfur content could stretch the industry beyond the breaking point if these needs are not considered. The situation will be exacerbated if refiners have to reduce MTBE usage as EPA and the Congress are considering and if restrictions on diesel sulfur go forward as planned," Sternfels said.

NPRA urged EPA to pay greater attention to the crucial role of the permitting process in its gasoline desulfurization plan. "We have identified many process changes that will be needed to allow refiners to comply with the sulfur proposal, and we believe that many or all of them will trigger permitting requirements. EPA should account for the time necessary to receive these permits and it should do everything possible to streamline the process which refiners will have to follow to obtain these permits before constructing facilities needed to comply with the rule," NPRA's comments continued.

Sternfels restated NPRA's willingness to work with EPA to address the many serious concerns expressed in its comments. "Continued frankness and openness will help us to achieve a better result and minimize understandings at this critical stage in the rulemaking. Our comments are offered in that spirit and with that hope," Sternfels concluded.

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