In a reversal of his approach to federal ozone determinations three years ago, Gov. Jared Polis is poised to ask the Environmental Protection Agency to not rush into imposing a more expensive blend of gasoline to help reduce ozone, calling it “problematic” and a frustrating “decades-old, one-size-fits-all" prescription to improving air quality.
“The Administration has concerns about a rigid approach — the requirement to use Reformulated Gasoline (RFG) — that was written into the Clean Air Act decades ago but may not be the best way to reach our air quality goals, and we believe (it) merits rigorous analysis of costs and benefits,” the Polis administration said in a letter that Colorado Energy Office Director Will Toor presented at a meeting of the Regional Air Quality Council on Aug. 5.
The Denver metro/Northern Front Range ozone non-attainment region faces a pending downgrade to "severe" status, under which Denver metro and northern Front Range residents will pay for the more expensive gasoline as soon as the summer 2024, unless Polis decides to ask the federal government to reconsider, and the EPA agrees to a time extension.
At issue is the failure of the state to achieve EPA ozone-pollution standards for the region, which includes the Denver metro area and eight counties along the Front Range from Douglas County to northern Weld County.
Conor Cahill, a spokesperson for Gov. Polis, confirmed that letter represents the administration’s position.
“We have been clear that Governor Polis and the administration are seeking alternatives because the Governor is committed to helping save people money on everyday items,” Cahill said, adding the statement was included in the packet for the Colorado Air Quality Control Commission meeting “at the urging of the Governor and his team of experts.”
The letter appears to be intended to accompany the newest version of Colorado’s State Implementation Plan, which federal law requires for places that fail to comply with air pollution standards.
Officials are in the process of preparing the new Colorado SIP.
The letter says the potential reduction in ozone concentrations, which are about 6% above the 2008 EPA standard of 75 parts per billion, would be so minimal as to have no practical effect but come at a very high cost — exceeding 50 cents per gallon, according to some estimates — to Colorado consumers and the state’s economy.
“Sensitivity modeling shows that the ozone reduction benefit from reformulated gasoline is only approximately 0.1 parts per billion,” the letter continues.
Greer Bailey, executive director of the Colorado Wyoming Petroleum Marketers Association, said Polis and the EPA should take a “hard look” at what the mandate would cost Coloradans.
“This is by far one of the most expensive proposals that our regulatory partners could impose on our neighbors and families in the Front Range,” Bailey said. “I think it's important that the governor and the EPA take a hard look, scientifically, of what the actual (ozone) reduction would be, because those costs are going to be significant on families trying to make their way.”
Bailey also said there's very little time left to submit Colorado's request to delay the EPA determination to “severe” non-attainment.
Unless the governor files the request for reconsideration by Sept. 15, the RFG mandate automatically kicks in, Bailey said.
The deadline appears to be tied to a settlement agreement deadline between the EPA and the Center for Biological Diversity, which sued the EPA, claiming it was illegally delaying downgrading several cities nationwide that are out of compliance with Clean Air Act.
Rich Mylott, U.S. EPA Region 8 Public Affairs officer, did not state a specific deadline when asked by The Denver Gazette.
“EPA’s proposal to reclassify Denver to severe and moderate status per the ozone standards are part of a larger agency action to evaluate and reclassify ozone non-attainment areas across the U.S.,” he said in a statement on Aug. 1. “EPA is currently reviewing public comment on the April proposal and expects to issue final determinations for all of these areas later this year.”
Bailey also said upgrading refineries to produce the new RFG blend could cost “tens of millions of dollars” and he expressed wariness that out-of-state refineries that supply gasoline to some 66% of Colorado might decide it’s not worth it to invest in such improvements.
The only refinery in Colorado, Suncor’s Commerce City facility, supplies about 33% of the state’s gasoline.
Bailey said if Suncor modified its plant to produce the new formulation, it won’t likely make two summer blends, one for the Denver metro/Northern Front Range ozone non-attainment region and another for other Colorado communities as far away as Grand Junction that Suncor serves.
That could mean Coloradans who live outside of non-attainment areas would also pay for the more expensive blend.
“The rail terminal in Grand Junction is supplied by Suncor,” Bailey said. “And if they have to transition every single gallon of gasoline to meet 40% of the market for Colorado, then that's all they're going to be making. And that bleeds into Summit County and El Paso County and counties on the Eastern Plains like Morgan County, where they don't have air quality problems.”
And if out-of-state refiners declined to produce the needed blend, Bailey added, the price of reformulated gasoline supplied by the Suncor refinery will obviously skyrocket due to scarcity and may even curtail people’s ability to travel.
A Suncor spokesperson told The Denver Gazette, “The refinery is preparing to be able to produce RFG for the 2024 summer driving season, in accordance with Clean Air Act requirements for the area covered by the non-attainment “severe” designation. The total cost of the project is estimated at more than $36 million.”
Polis’ office earlier echoed a similar worry: a scenario where there are “vastly different gas prices in different parts of the state.”
The governor previously said he will explore all options, including asking for a delay in the EPA determination, to ensure Coloradans won’t face a higher price at the gas pump.
“Absolutely, a request for an extension is one of the legal means that would be pursued if Colorado ever faces increased gas prices from EPA action,” Cahill said. “This is a hypothetical situation, and we have been pushing for ozone reductions through free transit, the adoption of electric vehicles, and more. For example, if Colorado meets ozone guidance then the threat is gone and no further action is needed.”
In the letter, the Polis administration called the automatic applicability of RFG "problematic for a variety of reasons.”
“The state is frustrated that the Clean Air Act offers only a decades-old one-size-fits-all approach that does not provide states with the latitude to make data driven decisions on what works best for improving air quality in an economically effective manner,” the letter added.
Instead of that approach, the letter said, EPA should work with Colorado to conduct a detailed cost-benefit analysis measuring the cost of RFG to Coloradans and its benefits for human health and combating ozone pollution and climate change.
Such an analysis, the administration said, must also compare RFG to other strategies, while accounting for the “range of potential gas prices across the state, as compared to other reduction strategies.”
“Should the state demonstrate that the control measures included in the SIP will result in the state achieving attainment without RFG, that RFG does not provide a benefit to Coloradans that outweighs the costs, or challenging economic scenarios exist at the time the use of RFG would be put into effect by the EPA,” the letter said, “the state will utilize available tools to avoid ineffective and costly measures.”
Polis’ position stands in stark contrast to the approach he took in 2019.
Back in 2018, EPA determined that the Denver metro area and northern Front Range failed to meet air quality standards and prepared to downgrade the region's status to "serious" non-attainment.
Then-governor and now U.S. Sen. John Hickenlooper asked the federal agency for an extension of time for the state to meet the standards.
The election that year ushered in a new administration, and about two months after assuming office, Polis withdrew Colorado's extension request.
"We believe that the interests of our citizens are best served by moving aggressively forward and without delay in our efforts to reduce ground level ozone concentrations in the Denver Metro/North Front Range non-attainment area," Polis said in his March 19, 2019, letter to the EPA.
The big difference between 2019 and 2022 is the hefty gasoline price tag that would come with the latest downgrade.