Why Gas Is Sky High

Gasoline refiners claim that the reason gas prices are so high is because there are 50 different blends of gasoline in this country, all of them mandated by various cities and states to match their environmental needs. ?[Refiners] are in a difficult position, it?s tough to make everyone happy,? according to Mark Zandi of Economics.com.

Jerry Thompson, of Citgo, says there could be supply problems this summer in places like California and the Great Lakes regions that have specific gasoline requirements to cut smog. Refiners would like to see only three blends in the future. ?The real pinch point is distribution and tankage,? says Thompson.

Atlanta and 43 counties surrounding it have a unique fuel. Until this year, the city of Tulsa had its own blend of gas during the summer, but now it?s been modified so it?s the same blend that?s used in Dallas. ?It will be a little bit easier for the industry to supply it,? Thompson says.

The big gas companies say they can?t make enough profit to build new refineries, because it costs so much to ship gasoline the great distances necessary to get the right blend to the right place. ?As matters stand, it?s been about 20 years since a large refinery was built in the United States,? says Vice President Dick Cheney.

The industry wants the White House to pass legislation that will ease up some of their environmental rules. The Environmental Protection Agency (EPA) requires strict standards for refineries. ?The most severe standards should only be required when needed,? says Bob Slaughter, of the National Petrochemical and Refiners Association.

The EPA requires burners that use little nitrogen oxide, which is a pollutant. But the burners cost a lot, making it expensive to build new refineries.. ?You have some places like in Yorktown, Virginia or Billings, Montana, where it does not always make sense,? says Slaughter.

Environmentalists oppose any changes. ?It?s a basic concept of the Clean Air Act, going back as far as 1970, that if you build any new facilities, you must put on the most stringent air pollution technology available,? says Blake Early of the American Lung Association. ?These companies should not be allowed to get away with this.?

Demands on the refining industry will increase in the future, since it must produce low-sulfur gasoline by 2004 and low-sulfur diesel by 2006. Thompson doubts the industry can afford to invest the 8 to 11 billion dollars needed to alter diesel fuel by that date.

While we can understand that the refineries may have a real problem that needs fixing, there?s something about this situation that smells like blackmail to us.

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