Conway exploring possibility of opting out of reformulated gas sales


by Joe Arnold

Posted on July 11, 2014 at 6:22 PM

Updated Saturday, Jul 12 at 1:40 AM

LOUISVILLE, Ky. (WHAS11) -- Frustrated with high gas prices and inaction by the federal government on his anti-trust investigation of a gasoline wholesaler, Attorney General Jack Conway (D-Kentucky) tells WHAS11 he is discussing a discontinuation of the sale of reformulated gasoline (RFG) in Louisville and Northern Kentucky.

"If we opt out of the RFG season in the summer driving season, it could potentially save drivers 25 cents a gallon," Conway said.  "We're evaluating how that would work.  We're talking to the Energy and Environment Cabinet.  I'm going to talk to Governor Beshear about it."

Since 1995, the cleaner burning more costly fuel blend has been sold in parts of the Louisville area and Northern Kentucky to improve air quality in compliance with Environmental Protection Agency standards.

"Nobody likes paying more for gas if they know that somewhere else they are paying less," said Thomas Nord, spokesman for the Air Pollution Control District in Jefferson County.  "This is something that we do because we have had problems with ozone and we continue to have problems with ozone."

Conway, however, is downplaying RFG's effectiveness.

"It might (make a difference) a little bit," Conway said, "but emissions controls have gotten a lot better on cars here recently.  Since (Governor) Brereton Jones first put that in place, I know our utility smokestacks have been scrubbed for sulfer dioxide, nitrous dioxide, particulate matter.  All of those things would potentially lower our output."

To watch the entire interview with Jack Conway, click here.

"I think we have to assess where we are to see if RFG is still necessary," Conway continued.  "And if it's not, we need to take a step and try to save our drivers some money."

Such a move, however, is discouraged by how EPA compliance is structured.

In a 2008 memo from Lauren Anderson, Executive Director, Air Pollution Control District to the Louisville Metro Council, Anderson explained that to drop any control measure from the state implementation plan, the Air Pollution Control District would have to formally petition the EPA, and demonstrate to the EPA that there are enough "equivalent reductions" in both volatile organic compounds (VOCs) and oxides of nitrogen (NOx) to offset the increase in pollution that would result.

"We would have to come up with new reductions and control measures, on top of any that are already in place," Anderson explained, "This is due to the 'anti-backsliding' provision of the Clean Air Act."

Anderson said requiring Louisville industries to cut their emissions accordingly would have a significant impact on Louisville's major employers and future prospects.

"If we opt out of RFG, where do we have to make it up?" Conway said, "and then do we then begin to put a burden on businesses, then that affects job creation and job sustainability.  And that's probably someplace I am not willing to go."

Under the current agreement with the EPA , RFG must be sold in Jefferson County and parts of Bullitt and Oldham Counties in the Louisville area.  In Northen Kentucky, RFG must be sold in Boone, Campbell and Kenton Counties.

The RFG reconsideration comes six years after Conway launched an investigation into the merger of Marathon Oil and Ashland Oil into Marathon Ashland Petroleum LLC, which Conway said created a monopoly which exploits its stranglehold on the market at the expense of consumers.

"Whether you go to Thorntons or BP or Marathon or Speedway, you're buying Marathon gas," Conway explained.

But Conway's pleas to the Federal Trade Commission and Justice Department to act on his investigation have gone unanswered.

"I'm really disappointed in the Obama administration," Conway said.  "I'm really disappointed in the Federal Trade Commission they haven't taken this up.  Maybe Kentucky is not a big enough market for them."

As he waits for action and begins his campaign for the 2015 governor's race, Conway is now looking elsewhere to provide some relief at the pump.

"We just have to assess that and see if we were to opt out, where do we make it up and is it workable?" Conway said.  "And those are conversations we are beginning to have with the cabinet in Frankfort to see if we can get some relief for people here in Kentucky."

"Four dollar a gallon gas is really expensive," Conway added.