WASHINGTON -- Boutique gasoline blends to help states meet clean air rules are not a factor in higher prices as President Bush and others have suggested, according to an Environmental Protection Agency (EPA) study ordered by the White House.
Although often cited as a reason for volatile gasoline prices, boutique fuels have not caused unusual distribution problems or contributed to price increases, the report concludes.
The review was conducted by a task force headed by the Environmental Protection Agency (EPA) and involving representatives [image-nocss] from the 50 states as well as the Department of Energy and the Department of Agriculture, said the Associated Press.
Facing growing public outcry over soaring gasoline prices, Bush ordered the study on April 25 in a speech in which he attributed high gasoline prices in part to the growth of special fuels. We...need to confront the larger problem of too many localized fuel blends, which are called boutique fuels, the president told a renewable fuels conference, adding that this has produced an uncoordinated, overly complex set of fuel rules that tends to cause the price to go up.
But the task force found otherwise, according to its report.
On April 25, 2006, Bush directed EPA Administrator Steve Johnson to bring the governors together to form a task force on boutique fuels. The mission of this task force is to find ways to reduce the number of boutique fuels and to increase cooperation between states on gasoline supply decisions.
On May 4, 2006, Johnson launched the task force and set an ambitious schedule to provide the President with a final report with options and recommendations within six to eight weeks. To meet this timeline, EPA held a series of meetings to provide states the opportunity to present their views and recommendations. EPA invited views from industry experts, public health organizations, and other interested parties.
On Friday, June 23, 2006, Johnson sent Bush the Boutique Task Force Final Report to help meet the White House's call to increase cooperation between states on gasoline supply decisions.
The report's major observations and recommendations include:
In general, the U.S. gasoline production and distribution system is able to provide adequate quantities of boutique fuels, as long as there are no disruptions in the supply chain. Existing authorities have been used to temporarily waive boutique fuel requirements during times of supply disruption. State fuel programs have provided significant, cost-effective air quality improvements. Any action to modify the state of existing boutique fuels or limit a state's ability to adopt fuel programs must at least maintain air quality gains and avoid unnecessary restriction. EPA has and will continue to expeditiously implement the requirements of the Energy Policy Act of 2005 (EPAct) as they relate to boutique fuels. These actions will limit the growth of new boutique fuel requirements. Any future analysis of potential changes to the number and types of fuels must use the most up-to-date data and tools to ensure that all aspects are appropriately addressed, including the impact that changes to fuel requirements may have on air quality, as well as the new generation of vehicles, fuel distribution, supply, and costs. Careful consideration should be given to the possibility of new legislative authority that would allow for the adoption of regional clean fuel programs. Cleaner-burning fuels used in the broader geographic areas merit further study as an additional option for addressing fuel supply and fungibility concerns. Renewable fuels are an important part of the nation's plan to reduce our dependence on foreign oil. States are undertaking a number of actions to promote the use of such fuels and the federal government is implementing programs, notably the Renewable Fuels Program established by EPAct, to do the same. It will be beneficial to undertake additional study to ensure these programs are working together and will not create undue impacts on air quality, fuel fungibility, supply and cost considerations.Click here to view the full text and charts of the Boutique Task Force Final Report.
Click here to view the officially submitted comments of stakeholders including the American Petroleum Institute (API), the National Association of Convenience Stores (NACS), the Petroleum Marketers Association of America (PMAA), the Renewable Fuels Association (RFA) and the Society of Independent Gasoline Marketers of America (SIGMA).
API also issued the following statement: APIhas consistently stated that it does not believe the patchwork of localized gasoline and diesel specificationsthe so-called boutique fuelshas led to the recent run-up in prices. It is inaccurate to say, as some press reports have, that the industry has claimed that boutique fuels have contributed to current high fuel prices; however, this rigid system of state- and local-specific fuel qualities can reduce supply reliability by making it more difficult to reallocate supplies in response to even relatively minor disruptions in the gasoline supply and distribution system. In this way, boutique fuels could increase price volatility and add to consumer costs during those disruptions. New laws designed to reduce the current number of regional fuels could help to reduce gasoline price volatility if they address the primary driver for increased boutique fuelsstate renewable fuels mandates.
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