Policymakers are asking if it wouldn't make more sense to have greater fungibility and commonality of petroleum products across the United States. Our response is that it would make the job of supplying the growing demand for petroleum products significantly easier, eliminating production constraints and supply bottlenecks. But it will be hard to achieve. If even more stringent requirements are the price of greater fungibility, supplies will not increase, but costs of manufacture will. Even more refineries will reduce capacity or close.
Regulators always seem to overregulate, even when reducing regulations is the professed goal.
Recent experience is not encouraging. The diesel sulfur rule has added an additional grade of diesel to the already overcrowded distribution system. And, on Capitol Hill, the Senate Environment Committee's MTBE bill in the last Congress was shaped by the agendas of special interests, with little attention to the impact on gasoline supply or cost of manufacture. Nevertheless, NPRA will participate in the legislative and regulatory processes wholeheartedly, and hopefully. The outcome of these efforts will determine our future, and may greatly affect your own.