One way to lower gasoline prices

I know the major topic today is still the catastrophe in Pakistan, but I think it is worthwhile mentioning that with each of these global calamities, our energy prices continues to rise.

I think most pundits agree that the price hikes in the recent months have been a combination of multiple issues including speculation, profiteering, lack of refining capacity (that has finally caught up with us) and numerous other global supply challenges due to war and strife in critical oil producing areas.

Despite the constant rise in cost I still do not see a single person rising up and saying anything about a national strategy over the next 10 years focusing on fundamentally addressing this challenge.

Here is one thing I read recently that could make an immediate impact. Did you know that that there are 15 different types of "blends" of autombile gasoline (PDF link) that are produced in the USA? FIFTEEN! Why so many? Because the EPA, combined with the different state environmental agencies have created a requirement for 15 different types of gasoline to be produced. Here is where a national strategy could benefit us rather than each state doing its own thing. During the hurricane crisis in the gulf coast, refineries were shut down, but other refiniries that produce other "blends" could not make up for the loss of production because some of those blends cannot be sold in the gulf coast states.

The reason for the different "blends" comes from the winter, summer additive requirements combined with different emmission standards for different regions of the USA. Why not create a national standard based on the most restrictive air quality requirement and use that everywhere?

We should revisit the 15 "blends" and determine a national standard based on a strict EPA goal to reduce emmissions everywhere and then have ALL refineries produce only a couple of blends. This would increase overall capacity and by some estimates lower gasoline costs by almost 30 cents!

I think the time has come for our local and national leaders to examine a 10 year strategy to reduce our dependency on oil. The first step is to rexamine the layered policy such as the 15 blends of gasoline that artifically chokes the supply of energy.

1 comment:

wasurrette said...

I agree with your one blend theroy, but I would carry it further to only one octane aswell. I don't believe there is any reason why more than one blend is necessary today. Again, pick the highest or the most stingent as well. Refinery costs would go down, as well as storage costs, and transportation costs. All around it would be best for the American people.