WASHINGTON – U.S. Reps. Mark Green (R-Green Bay) and Paul Ryan (R-Janesville) today continued their push to bring common sense and lower prices to the nation’s gasoline system by joining with House Majority Whip Roy Blunt, a member of the Energy and Commerce Committee, to introduce legislation that begins to ratchet down the existing number of specialty fuels on the market.
While last year’s Energy Policy Act took aim at the proliferation of specialized “boutique” fuels to prevent further fragmentation of America’s gasoline supply, today’s legislation – the Boutique Fuel Reduction Act of 2006 – takes the next step by establishing a mechanism to start reducing the number of boutique fuels used throughout different areas of the country. The legislation also broadens the existing authority of the Environmental Protection Agency (EPA) to waive boutique fuel mandates when supply shortages and price spikes occur.
Boutique fuel reforms are needed to bring competition into the marketplace so refineries that currently produce unique fuels will not have the leverage to price fuels artificially high at the expense of the consumer. Reducing the number of specialized fuels will also improve flexibility and prevent price spikes when shortages occur as the result of emergencies such as refinery fires or pipeline breaks.
“Reducing the number of fuel blends is a critical step in our ongoing battle to lower and stabilize gas prices,” Green said. “For our families and our employers, we must get fuel costs under control. Making gas easier and less complicated to produce will increase supply and bring prices down. That’s what we’re aiming to do with this bill.”
“Because so many different factors are behind skyrocketing gas prices, there is no silver bullet that will immediately bring prices down to where they should be. But we have to do everything we can to tackle the parts of the problem that are within our control,” Ryan said. “Congress can give the EPA broader authority to waive reformulated gas rules, and we can simplify our fuel system to lower costs, while at the same time protecting air quality. Ultimately, we’d like to see states choose from a menu of just a few different fuel types in order to meet their clean-air goals. While this legislation doesn’t get us there overnight, it moves us in the right direction.”
The Boutique Fuel Reduction Act of 2006 would do the following:
Locks in improvements made by ensuring that, when a boutique fuel drops off the existing list due to changing regulations, the number of fuels is reduced accordingly – rather than allowing a state to come in later and introduce a new boutique fuel to fill the hole left by the old one.
Provides that within nine months of enactment, EPA and the Department of Energy (DOE) must complete the study required by last year’s Energy Policy Act on boutique fuels, making recommendations on harmonizing our nation’s fuel system requirements.
Provides the EPA with additional authority to waive boutique fuel requirements in the case of unexpected problems with distribution or delivery equipment that is necessary for transportation and delivery of fuel or fuel additives.
The large number of highly specialized fuels around the nation (and the supply shortages and artificially high prices that tend to accompany these boutique fuels) are an unintended consequence of the 1990 Clean Air Act Amendments. As a result of these amendments, areas found in noncompliance with certain ozone standards use clean-burning fuels in an effort to improve air quality, but they were not given a standardized menu of fuels from which to select.
Throughout the nation, areas have chosen their own unique blends, leading to fragmentation of our nation’s fuel system and tight supply conditions that foster price spikes, particularly if there is a supply disruption affecting an area’s particular blend of fuel. In addition, as boutique fuel blends have multiplied, it has interfered with normal market workings and opened the door to greater price manipulation by those who produce these highly specialized blends of gasoline.
Last year, Ryan and Green made progress toward tackling this problem by including a provision in the Energy Policy Act of 2005 to stop the number of boutique fuels from continuing to grow and give the EPA limited authority to issue temporary waivers during supply emergencies. Today’s legislation is another step forward in addressing the problem with boutique fuels and inflated gas prices.