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Linn Energy, LLC Message Board

  • rlp2451 rlp2451 Apr 2, 2013 5:25 PM Flag

    EPA Proposal to Remove Sulfur May Cost $10B in Upfront Costs

    Which is why refiners were weak today:

    Valero Energy Corp. said the cost of complying with proposed pollution standards for gasoline would cost hundreds of millions of dollars in equipment construction and upgrades alone.

    Valero spokesman Bill Day said Tuesday that the company expects to spend $300 million to $400 million building new equipment to remove sulfur from gasoline and to expand existing facilities. He said Valero expects to incur additional operating costs each year, and those costs have yet to be determined.

    The Environmental Protection Agency said most refineries would be able to comply with its plan to reduce the amount of sulfur in gasoline with little to no effort. The agency is proposing to cut the sulfur content to an average of 10 parts per million, down from the current standard of 30 parts per million.

    Valero is the largest U.S. independent refiner. The American Petroleum Institute has estimated that the new standards would cost refiners $10 billion in up-front capital expenditures, and an additional $2.4 billion in annual compliance costs.

    "The EPA hasn't shown anything that suggests (the proposed standard) is going to have the benefits that would be worth the costs," Mr. Day said.

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