Environmental Regulations and Changes in Petroleum Refining Operations
June 1, 1998
Introduction
The U.S. petroleum industry has responded to 4 major new federal rules on motor gasoline product quality in the last 10 years:
| Environmental Regulations Affecting the Product Quality of U.S. Motor Gasoline | |
| Phase I Summer Volatility (RVP) Regulation | June 1989 |
| Phase II Summer Volatility (RVP) Regulation | May 1992 |
| Oxygenated Gasoline | November 1992 |
| Reformulated Gasoline Phase I | December 1994 |
These regulations have generated significant changes in domestic refinery operations, affecting production, marginal production costs, and market prices. Some changes have been dramatic. The price of motor gasoline has increased by as much as 7 cents per gallon because of the regulations.
These changes in domestic refining operations are identified and related to the summer Reid vapor pressure (RVP) restrictions and oxygenate blending requirements. This analysis uses published EIA survey data and linear regression equations from the Short-Term Integrated Forecasting System (STIFS). The STIFS model is used for producing forecasts appearing in the Short-Term Energy Outlook.