Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (20795)	6/15/2000 2:42:00 PM
From: Zoltan!	Read Replies (1) \| Respond to of 769667

Looky here: EDITORIAL - June 15, 2000 EPA gouges consumers The Environmental Protection Agency (EPA) is investigating possible "price gouging" in the Midwest - where the price of a gallon of unleaded regular has topped the $2 mark. But the real crime is the way EPA imposes multitiered regulatory costs - invisible to consumers - on motor fuels. These costs are borne by consumers - who blame the oil companies. But they ought to be blaming federal regulators instead. The recent spike in gasoline prices is to a great extent attributable to changes in the regulations governing the refining of gasoline from crude oil. The new process - by which supposedly "cleaner," "reformulated" gasoline is produced - have driven per-gallon costs up by a dime or more during the past few weeks alone. That and pre-existing regulations governing the way motor fuels are produced have added 25-cents or more to the total per-gallon cost of regular unleaded. Throw in federal and state taxes - ranging from 40 cents per gallon to more than 75 cents - and one quickly sees why gasoline is becoming so expensive. It has little to do with the oil companies - and a lot to do with government, at all levels. Ostensibly, we do get improvements to the roads from motor fuels taxes - so we won't quibble overmuch with them. However, "environmental taxes," if you want to call them that, are another matter. These are often of dubious benefit - and frequently very expensive to boot. EPA, as was pointed out on this page last week, is under no constraint to factor in the costs of the regulations it promulgates; it simply issues diktats and lets the marketplace worry about how all this will be paid for. Worse, though, are the unforeseen side effects of EPA's regulatory polices. Until quite recently, for example, EPA required the use of so-called "oxygenated" fuels in many areas, most of them heavily urbanized, as a means of controlling vehicle exhaust emissions and thereby improving air quality. However, one of the chief chemicals used to oxygenate the fuel - a compound called Methyl Tertiary Butyl Ether, or MTBE - has been identified as a health hazard and contaminant of drinking water. EPA had been warned of the potential risks of MTBE - both before and during its introduction as a motor fuels additive. The warnings were ignored. Result? Motorists paid five to 10 cents more per gallon for oxygenated fuels that not only tainted their water supplies, but which did next to nothing to improve air quality. Studies found that MTBE/oxygenated fuels had little or no effect on the emissions output of late model cars; they simply got worse fuel economy than before - because the oxygenated fuels had diminished energy content as compared with non-MTBE/oxygenated fuels. This object lesson in the sagaciousness of EPA bureaucrats should be borne in mind as we contemplate rising gas prices and the introduction of the purportedly miraculous "reformulated" gasolines. The new witches' brew is costing us more at the pump - and may cost us something else, too. But we may not know about that until a few years have gone by - as happened with MTBE. washtimes.com

To: MulhollandDrive who wrote (20795)	6/16/2000 7:56:00 AM
From: Zoltan!	Read Replies (2) \| Respond to of 769667

Getting Gored at the gas pump? AlGore the Junior is largely responsible for high gas prices: June 16, 2000 Reformulated Environment It'll be intriguing to see if Al Gore can make it through the summer without getting tagged with at least some of the blame for high gasoline prices. Much of the price rise has to do with the federally mandated introduction of something called "reformulated gasoline." It's an arcane subject most people don't know much about. But Mr. Gore does, and the re-election team is working hard to make sure responsibility for these high prices gets off-loaded on the usual suspects. In Milwaukee recently, Mr. Gore promised a "full investigation" into whether "price gouging" was to blame for high gas prices in southeastern Wisconsin and other parts of the Midwest. Oil refiners were summoned to Washington on Monday to explain themselves to the Environmental Protection Agency. And the Federal Trade Commission said Wednesday it had launched a probe of its own into possible "price-gouging." To be sure, OPEC's success under the tutelage of Mexican oil minister Luis Tellez in limiting oil production contributes to higher prices at the pump. But the high price of gasoline is mainly a story about environmental politics, and about making the air around us as squeaky clean as the author of "Earth in the Balance" can mandate it. The difference between $1.60 a gallon gas in most of the country and gas over $2 in certain places is largely due to the hyperzealous application of the 1990 Bush Administration Clean Air Act amendments by Mr. Gore's handpicked EPA Administrator, Carol Browner. Federal rules mandating a new summer blend of so-called reformulated gasoline, or RFG, came into effect June 1. Wisconsin gasoline retailers recently requested a temporary waiver of the RFG rules. The EPA rejected it. The state, in turn, is filing suit against the EPA. Yesterday the American Automobile Association sent a letter to Ms. Browner asking for a 90-day reprieve from the super-clean gasoline rules. Fat chance. Reformulated gasoline, now required in many of the country's urban areas, contains additives -- ethanol or a chemical called MTBE -- called oxygenates, which are supposed to promote more complete combustion and thereby reduce tailpipe emissions. Problem is, MTBE has been blamed for persistent groundwater pollution and a host of human ailments. Ethanol, meanwhile, makes the liquid fuel itself unstable, causing more evaporative pollution than would otherwise occur. Refining gasoline is a relatively complex process, and the mandated oxygenates make gasoline more expensive to produce. What's more, federal courts have all but granted a patent on the new gas to one company, Unocal, which seems to have gamed the mandate beautifully. Other refiners, who were recently ordered to pay $69 million in back royalties for the new gas, are considering litigating all the way to the Supreme Court. But if things are starting to look bad now, just wait for what the EPA has in store. Ms. Browner wants to ban MTBE, the oxygenate of choice for something like 80% of the reformulated gasoline produced, as a suspected carcinogen. (Refiners of course are bracing for a rash of liability suits from the Vice President's tort-lawyer contributors stemming from their compliance with the federal oxygenate mandate.) That would leave the alternative ethanol, the notorious Iowa caucus product, which is barely economical in the corn belt despite federal and state subsidies. Considering that the stuff can't be shipped in gasoline because it attracts moisture, it will pose even more of a problem for the rest of the country. Still, an effective ethanol monopoly will please the Administration's friends at the Archer Daniels Midland company, which controls 50% of the U.S. ethanol market. But its price isn't likely to please drivers. But there's more. The Gore-Browner EPA is now plotting draconian rules on the sulfur content of gasoline and diesel fuel. Years ago when gas prices were lower, Vice President Gore cast the tie-breaking Senate vote for President Clinton's 4.3 cent a gallon increase in the federal gas tax, now more than 18 cents. And of course virtually all the states also pile on gasoline taxes. In fact, there's no need to mandate oxygenates at all. Already companies like Chevron say they can blend gasolines without them with equal or better emissions performance. What's more, annual emissions of the worst auto exhaust pollutants have dropped by more than half since the 1960s, even though there are twice as many cars on the road today driving twice as many miles. Thanks to clean, modern engines, most of that improvement happened well before the RFG program appeared. The host of federal, state and local rules governing fuel production have gotten so bad that there hasn't been a single new gasoline refinery built in this country since the 1970s. And with the plants we've still got operating at full capacity, any little hiccup in the supply chain -- like a recent pipeline shutdown in Wisconsin -- is guaranteed to cause a problem at the filling station. Markets do have a way of reconciling restricted supply with hefty demand: higher prices. Something to ponder the next time you find yourself being Gored at the gas pump. interactive.wsj.com