Obama Administration gets ready to raise the price of gas again
Expensive gasoline is a signature of the Obama Era, and it’s going to shoot up another 6 to 9 cents per gallon under new Environmental Protection Agency rules, if the oil industry’s estimates are correct. An estimated additional cost of $130 per car on new vehicles will also be part of the package. The goal of these regulations is to reduce tailpipe emissions by cutting down on the amount of sulfur and nitrogen oxide in gasoline. The cost won’t be easily absorbed by a weak economy struggling to emerge from years of anemic growth.
The EPA, of course, says the gas price increase will be much smaller – only a penny or two per gallon – but as Charles Drevna, head of the American Fuel and Petrochemical Manufacturers, ruefully noted to Fox News, “I haven’t seen an EPA rule on fuels that has come out since 1995 that hasn’t said it would cost only a penny or two more.” For what it’s worth, the American Energy Alliance notes that the price of gasoline in California, where these fuel standards are already in effect, is 38.9 cents per gallon higher than the national average.
It should come as no surprise that much of this proposed gas price increase is a tithe to the bizarre Church of Global Warming, which soldiers on even after the total debunking of “global warming” mythology over the past two years. In fact, according to CNS News, the Obama Administration is now amusing itself by issuing reports that say we were going to have a brutal Ice Age, but “because of humans, the next ice age has been ‘delayed indefinitely.’” That’s how the cult leaders are claiming that global warming is real, despite the utter lack of verifiable evidence that any significant “climate change” is occurring. So… another wing of the Administration wants to spend billions to reduce the very same emissions that are protecting us from a new Ice Age?
But leaving the radical environmental lunacy aside, there could be significant health benefits from the new regulations due to reduced sulfur emissions, and the corresponding health care savings might offset, or even outweigh, the increased gasoline cost. Some auto manufacturers think the new standards will also improve fuel efficiency, which would ameliorate sticker shock at the pump.
All of these possible benefits and costs are hotly debated between supporters and critics of the new EPA regulations. It seems like the sort of discussion that should be carried out before the American people, so we can decide if we want this or not. There are supposed to be public hearings before the plan is finalized, so American consumers would be well-advised to pay close attention and keep in touch with their representatives. (Sadly, it’s more likely that people will pay scant attention to the hearings, and then howl in shocked outrage when gas prices shoot up again.) Perhaps the public would be willing to pay as much as 9 cents a gallon more for gas in return for the promised health and environmental benefits, summarized by the Chicago Tribune as follows:
A study released by Navigant Consulting last year said the rules could cut healthcare costs for lung and heart diseases by $5 billion to $6 billion a year by 2020 and by double that amount by 2030.
“This is the first big environmental initiative in the Obama administration’s second term,” said Frank O’Donnell, president of Clean Air Watch, who was briefed on Thursday. “It is the most effective tool available to reduce smog.”
The EPA estimates total health savings from the proposed rules would be between $8 billion and $23 billion annually by 2030 and that every dollar spent to comply with the rules would yield seven dollars in healthcare savings. It estimates some 2,400 premature deaths would be prevented by 2030.
For its part, the petroleum industry notes that it already spent $10 billion reducing sulfur content by 90 percent, and would now be asked to spend a comparable amount to achieve a far smaller incremental reduction. Also, the energy consumed during the extended refining process might actually increase carbon pollution.
There’s one other potential economic benefit to the new regulations, which explains why some in the auto industry support them. These standards already apply in California, so the EPA would essentially be extending California standards nationwide. Maintaining higher standards in one state imposes extra costs upon manufacturers – a phenomenon that has affected other industries, notably the regulation of phosphate content in dishwasher detergent. The oil industry would probably counter by arguing that extending California’s expensive standards to the rest of the country might not be the ideal path to uniformity, but there are undeniably cost savings from uniform national standards.
Americans seem to have accepted the New Normal of high gas prices, so even the worst-case 9 cent per gallon increase from these standards won’t be as noticeable as it would have been, back when gasoline cost half as much. Huge new vehicle costs, and most likely increased traffic fatalities, from the Obama Administration’s higher fuel efficiency standards are on the way as well, but the public has also proven willing to absorb these drawbacks without much complaint. (Notice how the Obama gun-control mantra of “if it saves just one life, it’s worth doing” absolutely does not apply when the topic of discussion is lighter cars that don’t protect their occupants as well.) The road to the eight-dollar gas of central planning dreams remains open, as long as regulators observe the speed limit, and don’t raise prices too quickly.
Update: The House Energy and Commerce Committee leadership responded negatively to the proposed EPA regulations, with a press release entitled “Obama Administration’s Answer to High Gas Prices? New Regulations That Will Drive Prices Even Higher at the Pump.”
“Increases in gas prices disproportionately hurt the nation’s most vulnerable individuals and families – with $4 dollar a gallon gas the norm in many parts of the country, we cannot afford policies that knowingly raises gas prices,” said Energy and Commerce Committee Chairman Fred Upton (R-MI). “Instead of raising gas prices, the Obama administration should focus on bringing stability and greater supplies to our energy markets by green-lighting projects like the Keystone XL pipeline, which will carry approximately one million barrels per day of oil from a close ally to the United States.”
“The Obama administration cannot be more out of touch. 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. We will review this new proposal to make sure that it delivers air quality benefits at the least cost to the driving public while preserving auto and refining industry jobs. This is just another example of an overzealous EPA,” added Ed Whitfield (R-KY), Chairman of the Energy and Power Subcommittee.