May 4, 2006

US EPA Convenes Panel to Study ‘Boutique Fuels’

By Chris Baltimore

WASHINGTON -- The U.S. Environmental Protection Agency on Thursday said it convened a taskforce with state governors to study the effects of "boutique" gasoline blends which are contributing to fuel shortages.

The EPA will submit a report to President George W. Bush in six to eight weeks which will review current requirements and lay out options for changing them, the agency said.

"This is the first step in addressing the President's goal to streamline America's fuel supply and distribution system," EPA administrator Stephen Johnson said in a statement.

Last week, Bush called on EPA to form the taskforce as part of a plan to reduce gasoline prices that have soared above $3 a gallon in many U.S. cities.

"America now has an uncoordinated and overly complex set of fuel rules. And when you have an uncoordinated, overly complex set of fuel rules, it tends to cause the price to go up," Bush said last week.

About 15 states have their own clean fuel requirements, including California, which has some of the most stringent fuel rules in the nation.

Federal programs requiring reformulated gasoline and other special fuel mixes account for six different fuel blends, and state fuel programs require another nine, according to the EPA's website.

The EPA said such blending requirements add from 0.3 cents to 3 cents per gallon to gasoline prices.

"However, these unique fuels may present serious challenges to the fuel distribution system and, especially in times of disruption, may have the potential to result in local supply shortages," the agency said in a news release.

In a related move, the EPA on Friday will officially remove a requirement that reformulated gasoline must contain 2 percent oxygenates as required by energy legislation signed into law last year.