Connecticut businesses and motorists will pay more for gasoline once new federal regulations — designed to help the state’s already clean cars emit fewer pollutants — are implemented.
The U.S. Environmental Protection Agency’s proposed upgrades to the Clean Air Act call for all states to have cleaner cars and use gasoline with significantly less sulfur.
While Connecticut already has the cleaner cars, the state still will see an increase in prices once the cleaner gasoline starts being introduced in 2017. Competing estimates put the price increase between 1 and 9 cents per gallon.
Connecticut already has the highest state average gasoline price in New England, according to the AAA Daily Fuel Gauge Report, and typically is among the top five highest cost fuel states in the nation, along with Hawaii, Alaska, New York, and California.
“Any time our customers have to pay more because the government is making changes … that is not good for us,” said Chris Herb, interim president for the Connecticut Energy Marketers Association, which represents Connecticut gasoline stations. “Our membership is disappointed.”
The proposed EPA rules, which are the third tier of the Clean Air Act first implemented in 1990, seek to reduce tailpipe emissions from cars across the nation by bringing all other states in line with California’s standards for vehicles and fuel.
Connecticut first adopted the California standard for cars sold and registered in the state in 2008. The rule calls for better emissions control systems than other vehicles sold in states without the California standard. The standards also require extended warranties on key components of the emissions control system, particularly the catalytic converter.
“There are stronger consumer protection standards in the California standards that we like in Connecticut,” said Paul Ferrell, assistant director of the bureau of air planning at the Connecticut Department of Energy & Environmental Protection. “Our cars are already cleaner than the national average.”
In order to maximize the use of that improved emissions system, the vehicles require fuel with less sulfur. EPA is proposing decreasing the sulfur level from 30 parts per million to 10 parts to million.
Connecticut currently requires sulfur levels of 30 parts per million.
“The cars will emit less pollution with the lower sulfur fuel,” Ferrell said.
The proposed changes haven’t sat well with the petroleum industry, particularly the refiners who see the increased drop in sulfur levels as having minimal impact on emissions.
“The question is whether the environmental benefit is worth the costs,” said Carlton Carroll, spokesman for the American Petroleum Institute, which represents companies in the oil and natural gas industries. “We are concerned that it is too much.”
While EPA is predicting the changes will result in an increase of about 1 cent per gallon at the pump, API believes the changes will add 9 cents per gallon to the manufacturing costs, Carroll said. Where the pump prices go from there is up to the market.
The oil refineries reduced sulfur content from 300 parts per million to 30 parts per million over the past decade with limited impact on costs, Carroll said, but what the EPA is asking will create a significant cost increase.
“We’ve done all that we can to reduce sulfur while not having costs go up,” Carroll said. “It is a cost-benefit concern.”
EPA already requires Connecticut to use a cleaner fuel in the summer months. This reformulated gasoline is supposed to reduce smog, which is created when pollutants interact with sunlight. Connecticut gasoline stations have to start selling it on May 1, which is a reason why prices spike at the start of summer, Ferrell said.
This reformulated gasoline, better known as the summertime blend, reduces pollution through vapor pressure, leading to less emitted vapor when the fuel is burned.
Despite this cleaner blend in the summer, Connecticut still will have impacts from the EPA’s sulfur changes proposed because the gasoline is cleaner in a different way.
The reason Connecticut’s gasoline prices are higher than other New England states isn’t because of this summertime blend, as EPA requires it in heavy populated areas, including the northern East Coast, California, and other urban centers such as Chicago.
State taxes are the real reason Connecticut’s gasoline stations charge more than those across the border in Massachusetts and Rhode Island, said Herb.
Connecticut has a 25-cent excise tax per gallon on gasoline and another gross receipts tax that adds 20 cents per gallon. That 45 cents combined gasoline tax is higher than the 23.5 cents in Massachusetts and 33 cents in Rhode Island.
Those state taxes equate almost exactly on the difference in the price of gas, since both Massachusetts and Rhode Island also are required to use the cleaner summertime blend, Herb said.
The average price per gallon of regular unleaded in Connecticut was $3.874 on April 3, compared to $3.653 in Massachusetts and $3.728 in Rhode Island, according to AAA.
The differential will get worse on July 1 when the Connecticut gross receipts tax increases to 24 cents per gallon, Herb said.
“The little gift from the government is an extra 4 cents on gas right before the busy driving time,” Herb said.
Despite Connecticut’s already high price of gasoline, the state is embracing the EPA’s changes on sulfur content and the price increases it will bring, with Gov. Dannel Malloy calling it consistent with the state’s approach to a stronger economy and healthier environment.
Connecticut gets so much pollution from downwind power plants in other states, Ferrell said, the state needs to do what it can to reduce its own pollution.
“Connecticut very strongly supports this proposal,” Ferrell said. “Most of our home-grown air pollution comes from cars and trucks.”
