New Obama/EPA Regs: Lower Pollution, Higher Gas Prices?

Cleaner air could mean higher gas prices for consumers.


Proposed regulations could bring cleaner air, and higher gas prices.

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The Obama administration is moving ahead with stricter fuel standards designed to significantly reduce pollution from cars and encourage greater vehicle efficiency, the Environmental Protection Agency announced Friday.

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The proposal, which aims to reduce gasoline sulfur levels by more than 60 percent, will annually prevent thousands of illnesses and deaths, and greatly reduce the number of lost school and work days due to air pollution, according to the EPA.

Sulfur is a natural component of crude oil but it reduces the efficiency of vehicle emissions control systems, resulting in higher levels of pollutants in vehicle exhaust.

"These common-sense cleaner fuels and cars standards are another example of how we can protect the environment and public health in an affordable and practical way," said EPA Acting Administrator Bob Perciasepe in a statement.

But the proposed new standards have riled up critics who say that the tighter regulations will translate into more pain at the pump for consumers. According to one industry report, the EPA's new fuel standards could raise the price of producing gasoline by up to 9 cents a gallon, costs that will likely be passed on to consumers already feeling gouged at the gas station, opponents argue.

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"With hard-pressed families already struggling to afford each fill-up, Congress needs to take a hard look at any new EPA regulation that may raise the price at the pump," said Energy and Commerce Committee Chairman Fred Upton, R-Mich., in a statement.

Others argue that the new regulations, which are designed to limit greenhouse gas emissions, could actually backfire and increase carbon dioxide emissions "because of the energy intensive equipment required to comply," Bob Greco, downstream group director at the American Petroleum Institute, said in a release.

But EPA supporters argue that Big Oil is bashing the regulations over fears it could cut into their profit margins, as the new rules could require billions in new infrastructure investments and higher operating costs for refiners. "Oil companies are fighting [the regulations] so they can continue to avoid paying for the costs of their pollution," a release from the National Resource Defence Council said.

[READ: Consumers Could Save $1 Trillion With Better Energy Information]

Automakers, too, generally back the EPA proposal. A recent joint presentation by the Alliance of Automobile Manufacturers and Global Automakers welcomed more "predictable national fuel quality at the retail pump" and argued that refiners are already producing low-sulfur fuels in California and in other countries including Japan and the European Union.

The regulations have been in the works for more than a year and would replace a Clinton-era standard adopted in 2000, according to the Wall Street Journal. The plan still faces a public comment period before it becomes final.

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