TheWeekInCongress.com

Week Ending June 18, 2004

HR 4545 The Gasoline Price Reduction Act of 2004

BRIEF

   The bill would focus on reducing or limiting what are known as ‘boutique fuels’. Boutique fuels are blends of gasoline that meet Clean Air Act standards in different regions of the US. Supporters of the bill indicated there are around 48 such blends. The bill would reduce the number of blends from which States would select.

   Because the types of fuels sold in certain areas are based on that area’s level of air pollution, and the type of fuel is supposed to not add to the air pollution, the limiting of boutique blends could have an impact on air quality in some areas.

   Ozone pollution, the result of gasoline burning in particular was, for some time measured in hours of exposure to the ozone and that usually was for an hour or so during rush hour traffic. New rules soon to go into effect would measure the ozone on an eight hour exposure thereby making the boutique blends more significant or requiring that even more of those blends be made.

   Opponents to the bill believe that the high gasoline prices are an excuse for the majority party to lower Clean Air Act standards.

Sponsor: Representative Roy Blunt (R-MO)

Vote: failed in the House. 236 – 194 (RC 247)

Cost to the taxpayer: No discernible cost.

MORE INFORMATION

   The US fuel supply has developed into some 48 different blends of gasoline that can be used in different parts of the country to comply with directives of the Clean Air Act. Supporters of the bill concern themselves with the prospect of a disruption in the US fuel supply and the complications of getting the correct type of fuel to the area that needs it.   

   Complicating the matter, they say, is the fact that the gasoline pipelines in American were built over thirty years ago and were intended to transfer only one type of gas. Supporters did not necessarily succeed in making a connection between solving a significant fuel interruption and the Clean Air Act as an obstacle to solving the interruption. Basically, though, the reduction of the number of blends, logically, would require that somewhere in the country Americans would be burning gas that negatively affects the air there.

   One supporter and a regular presenter of oil energy related legislation was Representative Joe Barton (R-TX). Rep. Barton said that the bill, “has three distinct provisions” The first would give the EPA Administrator, in conjunction with the Secretary of Energy the waiver authority regarding fuel additives and fuels in the event of a significant fuel supply disruption.   

   “The second section of the bill would give the Administrator of the EPA a preference as to which of three types of fuel could be required when considering approval of State implementation plans,” he said. “…while at the same time capping the total number of fuels or fuel additives at the nationwide number in existence as of June 1, 2004, and I believe that number is 48.”

   He concluded, “The third thing the bill would do would be to require the administrator of the EPA, again in cooperation with the Secretary of Energy, to undertake a study to determine the effect of State plan provisions on air quality, on the number of fuel blends, on fuel availability and on fuel costs. The results of this study are to be reported to the Congress within 18 months after enactment, with recommendations on legislative changes to the list of preferred fuels which, if expanded, shall not exceed 10 fuels.”

   The bill sponsor expanded on the relationship between air quality and fuel blends but also noted that although one area that runs out of their particular blend could not, in some cases, just get more fuel from resources twenty miles away that use a different blend, but drives could go that distance buy a fuel unapproved for their area and use it back home.

   Rep. Blunt said, “Communities across the country can use close to 45 different blends of gasoline. These so-called specialty boutique fuels are specially formulated as these fuel requirements are necessary to meet air quality standards in certain areas. To make matters even worse, even more special blends of these special blends are often required, depending upon the season. When supply cannot meet demand for one of these boutique blends, prices spike, sometimes overnight, and families and commerce suffers. States use numerous blends and grades of fuel to meet clean air standards. This approach results in islands within our country that use a gasoline used by no other community. These areas prohibit other blends of gasoline, even in times of shortage. In other words, if they run low they cannot run next door to borrow a little fuel that is easily available somewhere else. Instead, consumers see tight supply and rising prices.”

   “Mr. Speaker, …if St. Louis ever runs short of gasoline, they cannot go just right across the river to East St. Louis, Illinois. They cannot use the gasoline that is available 25 miles from downtown, outside of that attainment area, but of course the people that buy gas in those places can drive to St. Louis easily.”

   Opponents saw little to be supportive of. Representative Edward J. Markey (D-MA) “…if we had a rule prohibiting false or misleading short titles on legislation, I would offer a point of order that the Gasoline Price Reduction Act being brought before the body today is a blatant violation of honesty and presentation of legislation because the bill does absolutely nothing to deal with the real causes of the increase in the price of gasoline at the pump. With this bill the Republicans have identified a problem. Gas prices are too high. The consumers are paying an arm for regular. They are paying a leg for plus, and for their first born they get premium.”

   Rep. Markey continued, “We need to do something, says the Republicans. The Democrats agree, but the Republicans have offered up a false solution. They say, let us waive the Clean Air Act. We have 24 million Americans with asthma. We have 8 million children in America with asthma. Is the solution to high gasoline prices waiving the Clean Air Act?”

   “So what is the problem?” he asked. “Well, the Saudi Arabians, of course, took about 1 million barrels of oil off the market a year ago, and we heard just a little whisper from this White House that the Saudi Arabians were playing games with the oil prices in our country. The GAO actually did a study a year ago that indicated that all the oil company mergers in the 1990s led to a dramatic increase in gasoline prices. Are they investigating all these oil company mergers in America? Are they investigating what the Saudi Arabians are doing? Have we seen those hearings? No. Their answer is that it is the clean air that children are breathing in the United States that is the problem.”

   “That is what this bill is, the Gasoline Price Reduction Act. The Increase in Pollution Children Breathe Act is what it really is.”

   Another of the bill’s sponsors, Representative Paul Ryan (R-WI), responded to Rep. Markey’s comments. “I do not think the speech really applied to the bill we have on the floor, though. I would first mention that this waiver authority is nothing different than the current waiver authority the EPA has. Last year when we had a pipeline break in Arizona when they could not get a lot of gasoline, the EPA waived certain parts of the Clean Air Act so they could get gas supplies to meet the demand that was occurring because they had a huge supply shock.”

   Rep. Ryan expanded on the bill’s purpose, “What this bill does is recognize the fact that we can have cheap gas and clean gas in America. The goal here is to improve the Clean Air Act, make it function better and make our gas more affordable while maintaining every ounce of environmental standards that we already have on the books. This bill will help make it easier to meet the Clean Air Act, but let me put this issue in perspective. When we started the Clean Air Act, we had a good idea. The idea in the Clean Air Act at the time was if your area has dirty air, you need to clean it up. One of the things you need to do is burn cleaner gasoline through your cars. A very good idea. The problem is when they wrote this law, they did not think of the fact that if they allow cities, counties, States to select their own kinds of gasoline, that they would cause this huge problem we have today. Here is the problem.”

    He noted that there are ‘16 different base blends of gasoline which translate today into 45 different fuels in America and continued, “However, we have a pipeline and refinery infrastructure system in America that has not been upgraded since the 1970s. No new refineries have been built since 1976, and when we built that system we had one kind of gasoline flowing through America. Now because of the Clean Air Act, a very good law, but one that does not take into account this problem, when we go from winter-blend gasoline, which is basically conventional gas, to summer-blend gasoline, we move from one kind of gas to 45 different blends of gasoline required around America. When we have our refinery capacity running at 96 percent, any little hiccup in supply, any little refinery fire that has happened all across America, a problem with the pipeline breaking like in St. Louis or Arizona, we have huge supply shortages and giant price spikes.”

   “What this legislation does is it simply says we are going to have now a preferred list of fuels that people can choose from, local governments can choose from when they select their new gasoline blends to come into compliance with the Clean Air Act. What the intent of this legislation is to do is to make sure in the short term if we have huge supply problems, a refinery fire or a pipeline break, we have the authority to meet those supply problems; but in the medium term and long term, make sure we standardize our blends of gasoline so we can comply with the Clean Air Act and have inexpensive, affordable, clean-burning gasoline, Rep. Ryan said. ## All Rights Reserved. No reproduction or distribution without written permission from TheWeekInCongress.com