EPA Reduction of Lead in Gas May Bring Fuel Shortages
American motorists could face spot shortages and rising pump prices in the aftermath of the Environmental Protection Agency’s decision to reduce the lead content in gasoline by more than 50% July 1, analysts say.
Alarmed by substantially higher lead levels in the air than forecast just three years ago, the EPA announced new regulations in March lowering the limit on lead in gasoline to 0.5 gram per gallon on July 1 from the 1.1 gram ceiling in effect since 1982.
The EPA ruling will scale down lead in gasoline another notch to a virtual phase-out of 0.1 gram per gallon on Jan. 1, 1986. The agency has formally proposed banning lead altogether by 1988.
Analysts said the average lead content in gasoline already has dropped to the EPA’s July 1 target of 0.5 gram but probably will exceed the stiffer 0.1 gram guideline in 1987 and 1988 because the agency authorized a loophole to give refiners time to adjust to the phase-out.
Although the oil industry supports the EPA’s ultimate goal of eliminating lead from the environment to safeguard human health, many sectors contend the agency has moved too quickly to decrease lead in gasoline and has not prepared the public for possible shortages in regions heavily dependent on leaded fuel.
Some analysts question the timing of the EPA’s lead phase-down during the peak summer driving season when the potential for supply disruptions and price escalation is highest.
And there still are no definitive data on how the lead phase-out will affect 31 million older cars--or 27% of the U.S. passenger fleet--that were built prior to 1975 when Detroit first introduced automobiles designed to run exclusively on unleaded gasoline.
Leaded fuel accounts for about 38.6% of total U.S. gasoline sales because Americans have hung on to pre-1975 vehicles longer than expected, and many new car owners are using the cheaper leaded grade in vehicles designed for unleaded fuel to save pennies or to get a higher octane boost.
The EPA campaign is targeted at eradicating this practice, which has slowed the gradual disappearance of lead from the air and raised a public outcry over the danger posed to human health.
The EPA acted after its own studies indicated that at least 16% of all U.S. passenger cars are burning the wrong fuel. EPA officials say that figure is very conservative.
“We know that lead in gasoline accounts for 80% of the lead in the air and could not ignore the health effects,†said EPA spokeswoman Martha Casey.
“We’re finding out that even at very low levels, lead can cause high blood pressure, mental retardation, lowering of IQ in children, nerve damage and behavioral disorders,†she said.
The amount of lead in the atmosphere declined steadily after unleaded automobiles made their debut in 1975. The EPA considered relaxing lead standards three years ago when it appeared U.S. lead usage would shrink to 21.4 billion grams by 1988.
But as illegal fuel switching increased, the agency raised its 1988 lead usage projections by 67% to 35.7 billion grams and decided to propose tighter standards, Casey said.
The EPA estimates it will cost refiners 2 cents or more a gallon to produce the new low-lead fuel by substituting other octane boosters, such as ethanol, or using sophisticated refining techniques to get the same octane rating.
“Assuming the price of leaded fuel goes up, we hope to achieve additional health benefits by narrowing the price difference between leaded and unleaded gasoline so that people will be less motivated to misfuel,†Casey said.
The average U.S. pump price rose for the fourth consecutive month in June to a two-year high of $1.23 a gallon, partially in anticipation of the July 1 lead phase-down, according to the Los Angeles-based Lundberg Survey, which tracks gasoline prices.
Lundberg’s June 7 survey of self-service pumps showed regular leaded gasoline climbed 0.48 cents to $1.11 a gallon from two weeks earlier and regular unleaded moved up 0.53 cents to $1.19 a gallon.
“We also feel people will think twice before fuel switching for such a small amount of lead,†Casey said. “Lead has been a factor in prompting motorists with vehicles that require unleaded fuel to purchase leaded gasoline in the belief their cars will perform better.â€
Dan Lundberg, publisher of the Lundberg Survey, said prices for both leaded and unleaded gasoline should rise under the EPA’s program.
“The oil industry has seen the handwriting on the wall and already reduced the average lead content to half a gram per gallon by using more costly refining techniques to maintain octane ratings,†he said.
“As lead is removed, the refiner must work with more expensive unleaded gasoline,†Lundberg said. “Demand for unleaded will naturally increase, driving up the cost of all grades at the pump.â€
In the Rocky Mountain states, for example, 60% of all gasoline sold is leaded and local refineries are unprepared for a sudden shift in demand to low-lead fuel.
“The EPA has caught the oil industry more than a little flat-footed,†said Ron Jones, refining director of the American Petroleum Industry trade group in Washington.
“What we’re seeing with the EPA lead phase-down is a squeeze on the oil industry’s ability to make gasoline of the quality demanded by consumers and to make it available everywhere to everyone,†he said.
Jones said lead is the cheapest way to boost octane in gasoline and the limited pool of costlier ingredients to enhance octane will become tighter.
“The EPA has phased down lead more precipitously than refiners had planned on,†he said.
“We had hoped for a natural phase-out as the market for leaded gasoline disappeared sometime after 1990†when practically all the lead burners now on the road will be scrapped, he said.
In April, the Petroleum Marketers Assn. of America--independent wholesalers that distribute over half the nation’s gasoline--urged the EPA to postpone the July 1 phase-down long enough to determine whether it would cause local shortages.
But EPA’s Casey said the agency “is not really anticipating any particular shortages of fuel.â€
The EPA held two days of public hearings last July on its proposed lead phase-out and then solicited comments on a total lead ban in gasoline.
“The oil industry knew we were considering lowering the lead content in gasoline to 0.5 grams a year ago,†she said. “We could not just consider the industry itself since the benefits to be derived in terms of health are so great.â€
Casey said the EPA’s lead banking program should prevent shortages and give older refineries more than a two-year grace period in which to upgrade facilities to produce low-lead and, ultimately, unleaded fuel.
The lead bank permits refiners that made leaded gasoline containing less than the 1.1 grams allowed by the EPA in the first half of 1985 to receive a credit that can be used for future production through 1987. Credits also can be traded between refiners.
“The lead bank is crucial for the industry to provide the quality and quantity of gasoline that the public needs,†said Pat Wright, spokeswoman for Amoco Corp., the largest U.S. gasoline marketer, in Chicago.
“But in our opinion, there will be turmoil for the next year or year and a half in grades of gasoline, quality, ingredients, octane levels and in costs,†she said.
Auto makers contend that the majority of pre-1975 cars designed to run on one or two grams of lead per gallon will get the octane boost they need with the EPA’s phase-down.
“Some older cars in the passenger fleet are bound to have some knocking,†said Richard L. Klimisch, a member of General Motors Corp.’s environmental activities staff in Detroit. “Their owners can buy premium unleaded fuel, which will solve the problem.â€
A major unknown, however, is whether aging vehicles will receive adequate valve lubrication from only a fraction of a gram of lead.
Based on recent tests, the EPA believes some older cars may not need lead at all, Casey said.
“But we wanted to leave one-tenth of a gram in leaded gasoline after Jan. 1, 1985, until we examined the issue further,†she said.
Linas Globis, staff engineer at the Motor Vehicle Manufacturers Assn. in Detroit, said most studies indicate older car engines can operate safely with less than a tenth of a gram of lead.
Even if the EPA bans lead altogether, Globis said enough lead probably has built up on the engines of old cars to postpone valve damage before other unrelated mechanical problems retire the vehicle.
Low Risk of Damage
The EPA lists 25.4 million vehicles--including 10,865 heavy-duty trucks not required to use unleaded fuel until 1987--that could be at risk from the lead phase-out.
“Since older cars are less likely to be run at high speeds and with heavy loads, these vehicles probably have a low risk of valve damage but are not risk free,†said Kelly Brown, emissions control analyst at Ford Motor Co. in Detroit.
