March 19,2013

President Barack Obama President of the 1. nited States The White I louse 1600 Penns y lvania Ave. Washington. DC 20500

I )ear President Obama,

\Ve are writing you regarding the proposed Tier 3 gasoline rulemaking that the Office of Manae.ement and Budget (0MB) received on January 29. 2013. America's fuel manufacturers are a strategic and valuable asset for the United States, They provide secure supplies of refined petroleum products that the American economy depends on every day, and these products are critical to our nation's economic security. The 'l'ier 3 gasoline rulemaking will raise gasoline manufacturing costs by billions of dollars and hamper U.S. refiners' global competitiveness. The Environmental Protection Agency (EPA) has decided to move forward with this rule making. despite the fuct it has yet to provide clear scientific justification that Tier 3 regulations are

necessar yand will benefit public health. Instead of flioving forward with a. notice ot propoSed rulemakin (NPRM ) on '11cr 3, we write to request the Administration direct the EPA to issue an Advanced Notice of' Proposed Rulemaking (ANPRM) prior to the advancement of' rulemaking.

Ihe new Tier 3 regulations at 0MB are completely discretionary and would place stringent requirements on fuel manufacturers. Refiners have reduced gasoline sul fur content nearly 90 percent since 2004, from 300 parts per million (ppm) down to 30 ppm. Despite this achie ement. 'lier 3 regulations call for fuel manufucturers to reduce sulfur content an additional 70%. taking levels from 30 pm down to 10 ppm. A study perfurrned by Baker & O'Brien examined the effects of' these gasoline sulfur specification changes and concluded the 1 icr 3 rulemaking will have significant impacts. Specifically, the study found that refineries will he required to spend nearly $10 billion in new capital expenditures and l'ace an annual compliance cost of $2.4 billion, resulting in an increase in the cost of manufacturing gasoline bY up to 9 cents pen' gallon. In addition to the adverse consumer impacts, the anal y sis showed that additional hyrdoireating. required to meet more stringent requirements undei' Tier 3, would actuall result in increased (ii l(i emissions, something that would be in conflict with EPA's requirements under the Clean Air Act. 'Ihe impacts of her 3 could be even greater ii' E1A advances additional RVP controls along with lie sulfur content reductions.

In light of' the potential impact of the 'l'ier 3 rule. we strongly urge EPA to issue an ANPRM that will include a usti1ication on why Tier 3 is necessar y . Given the discretionar y nature of the '11cr 3, we feel such a step is necessary to ensure transparenc y . EPA has stated that that. Tier 3 is

necessar y to improve air quality, but under the 2008 EPA 

### NAAQS Regulatory Impact Analysis, sulfur reductions or other fuel changes were not even mentioned, Additionally. EPA has saidHeidi Heitkamp U.S. Senator 

### I. I anLlrieu ti.S. Senator

Mark l3egich U.S. Senator l'resident l3arack Obarna Page 2 March 19,2013

they need l'icr 3 in order to meet the new fuel economy standards, hut has not ideniiied an ynew vehicle that would he enabled by lower sulfor levels or would be impaired by current sulfur standards. Lastly, an ANPRM will allow the public and affected industries an opportunity to provide feedback and give 

### EPA more time to analyze the data submitted by those industries to determine whether or not the Agency even needs to move forward with Tier 3.

With any new rules released by 0MB. we expect a thorough analysis of the science, as well as costs and henelits to the general public and affected industries before proceeding. At a time when consumers are worried about prices at the pump, we urge the Administration to issue an 

### ANPRj\1 before nioving forward with any Tier 3 regulation. Because of the significant costs that will be placed on fuel manufaeturers and consumers. they deserve an opportunity to review the justifications for this rulemaking and be afforded appropriate time to submit comments and data analvs is.

Ihank y ou for your time and attention to this matter, and we look forward to your timely response.
Sincerely yours,

CC: Jeffre y Zients Office of Management and Budget Gene Sperling - Director of' National Lconon)ic Council