Governor Seeks Waiver From Clean-Air Rules
Gov. Arnold Schwarzenegger said a federal waiver exempting California from clean-air rules for gasoline would lower prices and increase refiners’ flexibility in producing gasoline.
Schwarzenegger, in a letter to U.S. Environmental Protection Agency Administrator Mike Leavitt, said a waiver would allow refiners to change gasoline formulations as needed to respond to supply and market conditions. Federal rules require gasoline to be blended with oxygen-rich components such as ethanol or methyl tertiary butyl ether in the most polluted areas, including California. The additives make fuel burn more completely, reducing emissions.
Gasoline prices have soared to records across the United States as refiners pass along higher costs for crude oil, which accounts for more than two-fifths of the retail price of the fuel. U.S. Energy Secretary Spencer Abraham told the House Energy and Commerce Committee last week that the EPA was weighing California’s request.
“The justification for a waiver is so strong that I believe the serious consideration your agency is now giving our request will necessarily lead to a grant of the waiver,” Schwarzenegger said. “I trust that it will come soon enough that it can have an impact on our current gasoline price situation.”
The nationwide average price for self-serve regular gasoline hit $1.78 a gallon, a record high for the second straight week, the government said Monday. That was an increase of 2.2 cents from a week earlier, according to the U.S. Energy Information Administration’s weekly survey of service stations.
The Energy Department’s analytical arm has said it expects gasoline prices to climb during the upcoming driving season, reaching an average of $1.83 a gallon for April.
The EPA also is considering a waiver request from New York. California and New York consume 14% of U.S. gasoline supplies. Crude oil prices last month surpassed $38 a barrel, the highest since the months leading up to the Gulf War in 1991.
U.S. gasoline supplies have shrunk as refiners slowed operations and motorist demand rose. Gasoline futures prices are up 23% in the last year in part because of concern that the fuel-blending rules limit refiner flexibility.
