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Ryan Passes Amendment to Stabilize Gas Prices for Wisconsin over Long Term

WASHINGTON – During consideration of comprehensive energy legislation in the U.S. House of Representatives, Wisconsin’s First District Congressman Paul Ryan authored and passed an amendment that would help prevent gas price spikes by reining in the proliferation of specialized or “boutique” fuels.  This amendment resembles legislation that Ryan and Congressman Mark Green introduced earlier this year to accomplish the same goal.  If enacted, this will be the first time federal law has established a process for beginning to consolidate fuel blends nationwide.     

 The House approved Ryan’s amendment and passed the energy bill today by a vote of 247-175.  Ryan voted in favor of the energy bill because it incorporated his fuel blend legislation.

 “Although this energy bill is not perfect, by including this amendment it makes important strides toward reducing the number of boutique fuels.  Once this policy is fully implemented, this will help combat gas price spikes in southern Wisconsin and around the country, as more areas use the same fuel blends,” Ryan said.  “While this legislation will not consolidate boutique fuels overnight, it sets up a process for the EPA and the states to move toward standardization.  This is a crucial step in fixing our gasoline supply problems and keeping gas prices more stable over the long-term.”

 “ I will be watching the progress of this bill and any changes that are made very closely as it goes forward in Congress,” Ryan said.  “Congress must make addressing our area’s gas price spikes part of any comprehensive energy plan it passes.  Otherwise, as the number of boutique fuels grows, our experience with fuel supply shocks and skyrocketing prices will be repeated throughout the country.”

 In recent years, fuel supply shocks such as pipeline problems and refinery fires have contributed significantly to the problem of gasoline price spikes in southern Wisconsin.  The reason for this is that the Chicago/southeastern Wisconsin region uses a specialized formula of reformulated gasoline that is not used elsewhere in the country; therefore, when supplies of this type of gasoline run low, the area is prevented by law from drawing on supplies of gasoline from other regions. 

 Many other “boutique” fuels are used throughout the country, as states and localities may select unique fuel blends to address their air pollution problems.  Currently, there are 18 different types of gasoline in use, each in three different grades of octane, resulting in over 45 boutique fuel blends nationwide.  This number is expected to grow in the next few years as a new ozone rule comes into effect and new ozone nonattainment areas are designated in 2004. 

An Energy Information Agency study, which looks at 40 U.S. counties projected to fail the new ozone rule in 2007, suggests that 24 of these would be likely to adopt low-Reid Vapor Pressure gasoline, creating the potential for 24 brand-new boutique fuels.  Such proliferation of boutique fuels would set the stage for greater gas price instability and more price spikes. 

Ryan’s amendment tackles this problem by beginning the process of consolidating fuel blends and reducing the number of boutique fuels.  The amendment establishes two preferred fuels from which states will be encouraged by the Environmental Protection Agency (EPA) to select when writing their air pollution control plans.  (The Clean Air Act requires each state with air quality problems to have an EPA-approved State Implementation Plan that shows how an area plans to meet its air quality obligations.) 

Ryan’s amendment will provide statutory preference to State Implementation Plans that select one of these preferred fuels, prompting states to choose between these two fuels instead of opting for yet another boutique blend.  This enables the EPA to begin the process of consolidating gasoline blends across the nation, while preserving states’ rights.  Over time, as more areas use the same type of gasoline, supply problems will become easier to address and price volatility will decline.  

The Chairman of the House Subcommittee on Energy and Air Quality, Congressman Joe Barton, hailed the amendment as “the biggest step toward reducing the number of boutique fuels and preventing related price spikes since the Clean Air Act became law.  I applaud the gentleman for his doggedness on this issue.”

This amendment was approved as part of a larger energy package that includes provisions to:

·        Increase domestic energy supplies and reduce U.S. dependence on foreign oil.

·        Promote a cleaner environment with renewable fuels. [Ethanol]

·        Promote conservation and renewable sources of energy (such as wind, biomass, and gas emitted by landfills.)

·        Speed the development of fuel cells as a clean, efficient energy source.

·        Encourage homeowners and homebuilders to invest in energy-efficient upgrades.

·        Increase funding for the Low Income Home Energy Assistance Act (LIHEAP), which assists low-income consumers with payment of high energy bills.

In addition, the House voted against including an amendment to increase the Corporate Average Fuel Economy standards.  Congressman Ryan opposed this amendment, known as the "CAFE" amendment.   

“Forcing this sort of hike in fuel economy standards is the wrong way of bringing about better fuel efficiency in cars and SUVs,” Ryan said.  “It would cost jobs by making it tougher for American automakers to compete with foreign manufacturers.  This is unfair, unnecessary, and it wouldn’t even yield the benefits that supporters claim.  Because some foreign car companies already sell many small, fuel-efficient cars in the U.S., they have room to produce more less fuel-efficient SUVs than American companies and still meet higher efficiency standards overall.  That’s why raising fuel economy standards would not result in fewer SUVs on the road; it would simply mean fewer Janesville, Kenosha, and U.S.-built SUVs and more foreign models.”

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