|Map of federal and boutique fuel requirements in the US, as of May 2006. Click to enlarge. Source: ExxonMobil|
The US Environmental Protection Agency today released its Boutique Fuels Task Force report. In response to high fuel prices, President Bush in April had directed the EPA to increase cooperation among the states on fuel supply decisions and to analyze the impacts of boutique fuels, or fuel blends, used by states to help meet clean air standards. (Earlier post.) The Task Force report represents one step in complying with that directive.
Although the report determined that boutique fuels continue to pose a challenge to the movement of fuel when supply disruptions occur, it did not reach a final conclusion regarding the effect of boutique fuels on the price of gasoline.
Fuel composition and quality are proven and effective measures for emissions reductions. In general, the federal Clean Air Act sets the standards for gasoline—there are six different kinds of fuels (RFG and low RVP) in the federal programs. However, areas having a proven air quality need can adopt unique clean fuel requirements to address those special needs or non-attainment classifications.
Boutique fuels are the specialized blends produced for a specific state or area of the country to meet those specific state and local air quality requirements. Roughly 15 states have adopted their own clean fuel programs for part or all of the state. These state fuel programs make up nine different kinds of fuels.
EPA is required by the Energy Policy Act of 2005 to cap the number of boutique fuels permitted for use and place additional restrictions on the growth of such fuels. Today’s task force report called for conducting additional analysis of any action to further limit a state’s ability to adopt boutique fuels. In addition, EPA will conduct a more comprehensive review in the coming months examining boutique fuels and other factors that affect the fuel supply and distribution system.
The report’s major observations and recommendations include:
Boutique fuels continue to pose a challenge to the movement of fuel when supply disruptions occur. Natural events, like hurricanes, as well as refinery and pipeline breakdowns can cause such disruptions. EPA needed to waive fuel requirements over 30 times in 2005 alone.
State fuel programs have clearly provided significant, cost-effective air quality improvements. Any actions to modify the slate of existing boutique fuels or limit a state’s ability to adopt fuel specifications should be done in a manner that at least maintains these air quality gains and avoids unnecessarily restricting state authority.
EPA will continue to implement expeditiously 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.
Future analysis of potential changes to the number and types of fuels must utilize the most up-to-date data and analytical tools. The 2008 EPA/DOE Fuel System Requirements Harmonization Study should ensure that all aspects, including impacts changes to fuel requirements may have on air quality, as well as the new generation of vehicles, fuel fungibility, supply and cost, are appropriately addressed.
As part of the analyses of future fuel options, careful consideration should be given to the possibility of new legislative authority which 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 its 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.