May 20, 2004
YES, WE HAVE GAS. NO, YOU CAN'T BUY IT:
Clean-air rules fuel gas run-up: Mandates for special blends play role in higher prices (Stephen J. Glain and Peter J. Howe, May 20, 2004, Boston Globe)
Oil industry officials and others are blaming part of the run-up to $2-a-gallon gasoline on air pollution regulations that are forcing refiners to supply 18 different blends of gas around the country, including four in New England alone.Posted by Orrin Judd at May 20, 2004 8:30 AMThe proliferation of mandated ''boutique blends" of gas has snarled supply lines for gasoline and left regional suppliers vulnerable to sudden shortages, which has built in a permanent premium in gas prices even before recent Middle East turmoil and OPEC supply reductions began pushing prices higher still.
Instead of being able to shop around the country for the best deal on wholesale gasoline, local suppliers are required to buy blends of gas that may only be mandated for sale to just a few million Americans. Refiners, meanwhile, run much less efficient operations because they are producing the equivalent of a Friendly's menu of ice cream instead of just plain vanilla, industry executives say.
Today's situation can be traced back to a federal clean-air initiative unveiled nearly a decade ago that has inadvertently compelled many states to develop gasoline based on their own environmental standards, contributing to an oil supply crunch by effectively balkanizing the country's gas market.
At least 18 different grades of gas have evolved as a way to sidestep the program, launched in 1995, which required the country's most smog-choked areas to use a cleaner-burning gasoline known as reformulated gas.
''Twenty years ago we had leaded and unleaded, and that was it," said Rayola Dougher, senior policy analyst with the American Petroleum Institute. ''Now we have 18 different types of gasoline that are required to be sold around the country, including summer and winter formulations. It's a lot to juggle, and it's a real issue for refiners."
I blame Halliburton.
However, this is why refining stocks have gone up quite nicely in the past 3 years, while oil stocks have just inched along.
Posted by: jim hamlen at May 20, 2004 11:56 AMWhy isn't there a black market for "un-green"
gas?
J.H.
Not yet...give it another dollar or two per gallon.
