Bingaman on EPA's Decision re: Gasoline

April 22, 2004
10:30 AM
Some refiners are opposed to letting more gasoline into the U.S. because it may hurt their bottom line. But their bottom line under current EPA rules for sulfur allotments appears to be in great shape; it’s the American consumer who needs a break. Those Americans won’t be getting that break, as evidenced by the fact that the price for U.S. gasoline futures soared today after EPA’s announcement. According to Reuters, NYMEX gasoline futures rocketed to a record high on news of EPA’s decision. And Platts, the world’s largest and most authoritative source for energy industry information, reports that “The move raises the likelihood of a tighter gasoline market going into the summer driving season.” Said Sen. Bingaman: "I am troubled by reporting on EPA’s decision that makes it appear that economic impacts on U.S. refiners were an influential consideration. I hope that is not the case. "In my view, the biggest problem is that the sulfur allotments market lacks transparency. No one can obtain information regarding the amount of allotments which have been generated and are available without first paying an expensive fee and joining an exchange, or by calling every producer in the country on a regular basis. Although EPA does publish an annual report on sulfur allotments, that data is not timely enough for gasoline markets, where trades occur in real time, or to help consumers this summer. "I am pleased that my letter to President Bush has called attention to how opaque and uncertain the sulfur allotments market is. As a next step, I will ask the EPA to tell me, and the American public, how many allotments have been generated or earned to date … how many have been used … how many are available today … and how many EPA expects to come to market over the year. I also will ask at what price these allotments are trading, and at what potential cost to American motorists. I hope that EPA monitors this market carefully, to ensure that decisions by refiners do not adversely impact U.S. gasoline markets or wallets."

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