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The Clinton Administration is pointing fingers at everyone, except itself, in trying to explain escalating fuel prices. But who do they think is responsible for the United States not having an effective national energy policy? Who has spent seven years ignoring this issue despite repeated warning signs? Who has done more than anyone else to cause fuel prices to jump? They have.

Clinton’s Environmental Protection Agency (EPA) is behaving like a child who gleefully gorges himself on an entire cake, and then can’t figure out why he’s got a terrible stomachache. It is a regulatory agency that refuses to take responsibility for its own regulatory actions. It keeps imposing costly new rules and requirements directly affecting the production of gasoline and then goes around blaming others for the costs of that same gasoline.

Almost once a year for the last seven years, the EPA has proposed some new regulation which would raise the costs of fuel anywhere from two to eight cents per gallon per regulation. These direct costs add up. In addition, there are indirect costs associated with the supply of gasoline. When a specific fuel is mandated in a particular region--such as what is occurring in the Midwest today--the price of gasoline not only reflects the costs of production, but also the availability of the supply.

Recently, the Senate Clean Air Subcommittee, which I chair, held hearings which examined two new EPA proposals which will add even additional costs to consumers if enacted. One addressed plans to expand the use of ethanol and the other looked at proposed new limits on the sulfur content of diesel fuel.

The first proposal involves the EPA’s response to concerns about the fuel additive MTBE. The 1990 Clean Air Act amendments mandated the use of oxygenates in the reformulated gasoline program, which affects a number of the nation’s most polluted cities. The two principle oxygenates are MTBE, a petroleum deriviative, and ethanol, a corn deriviative. It turns out that MTBE pollutes our nation’s water, creating a significant unintended environmental problem.

So last fall, an EPA Blue Ribbon Panel recommended that MTBE be phased out, the oxygenate mandate be eliminated and ethanol be studied before its use is increased. But the EPA ignored this last recommendation and instead proposed a new national ethanol mandate. Experts at our hearing said that such a mandate would lead to major price increases and supply problems. They also pointed out that the use of ethanol has its own set of environmental problems and concerns which need to be further studied. The EPA is again ignoring the science and proposing a policy which will increase fuel costs.

The second proposal concerns EPA planned regulations to remove sulfur from diesel fuel. Everyone agrees that sulfur should be removed from diesel. The question is how much and at what cost. The EPA has proposed removing 97 percent of the sulfur. The refiners say they can remove 90 percent at half the cost of removing 97 percent. Experts at our diesel hearing stated that the engine technology which requires 97 percent removal is not yet proven and may not yet be available. They said the refiners will likely forgo making the low sulfur diesel and may export their diesel products instead. Or they may put off the decision until the technology is proven, leading to extremely volatile pricing of diesel fuel for truckers, farmers and home heating purposes.

We also have a fundamental problem with our national refining capacity. Since 1990, the number of U.S. refineries has dropped from 205 to 159, with no new refineries having been built since the 1970s. It is not expected that refining capacity will be able to increase to meet future demands. In fact, the EPA’s enforcement strategy is meant to discourage any increase in capacity.

This means that every new environmental regulation that forces a small refinery to close will only make us more dependent on foreign supplies of oil and gasoline. While we should not abandon our goals for clean air, we must realize that we already have the cleanest burning gasoline in the world. Before any new regulations are imposed, we should understand clearly what they will mean to gasoline prices, and how they will affect supply and demand. If the EPA would just follow this basic guide, it could help prevent the whole country from getting another huge fuel price stomachache.