Next EPA Fight: Automakers Vs Oil Refiners Over Clean Fuels

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It's not just how efficiently you burn it--it's the stuff you're burning, too.

That's the message coming from the Alliance of Automobile Manufacturers, working with the EPA to tighten pollution rules for gasoline, reducing the proportion of sulfur from 30 parts per million (ppm) to 10 ppm.

The oil refiners don't want to play ball just yet though. Bloomberg reports that the American Petroleum Institute (API) is pushing the EPA to delay the tighter rules, lest the cost of improving the fuel be passed on to the consumer.

Carmakers are keen to see the new, cleaner fuel rules passed, as it allows them to build even cleaner combustion engines to meet the environmental targets imposed on them.

Excess sulfur in fuel is making this difficult as it "poisons" emission control devices, reducing the manufacturers' ability to cut emissions. With cleaner fuels, cleaner engines can be made.

Senator James Inhofe (R-OK) and five other senators wrote EPA in January to voice their concerns.

"With gasoline prices already high, and with so many Americans already struggling to make ends meet, we urge you to recognize that now is not the time for new regulations." Inhofe explained.

Estimates vary wildly as to how much the changes would affect prices at the pump - from 25 cents per gallon, says the API, to only 1 cent per gallon according to the EPA. The former would take many states ever closer to the $5 per gallon mark. We've heard dire predictions over the cost of regulation before which are usually overstated--so the real cost of cleaning up fuel remains to be seen.

Tighter fuel and emissions regulations are already in place in Europe and Japan, as well as California, whose CARB standards are adopted by several other states.

The fuel standards won't have any effect on current Corporate Average Fuel Economy standards, which regulate fuel usage rather than emissions, but they should make it easier for carmakers to meet tighter EPA emissions standards and smog requirements.

The new regulations would make up part of the new Tier 3 standards for pollution emission levels. However, they're likely to be delayed, and the agency hasn't yet sent them to the White House for review, which could add several months to the process.

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