Clean Air Act Regs Driving Up Gas Prices

We’ve all heard the explanations for rising gas prices: greater fuel demand, reduced OPEC (search) supplies and turmoil in the Middle East. Now oil industry insiders say there’s another culprit — and it’s in your own home state.

Officials believe environmental regulations are driving up prices by forcing fuel refiners to develop different blends of gasoline to comply with states’ varying air pollution laws.

The so-called “boutique blends” make it harder for refiners to import gas and creates confusion at the pump. And though they might only add a few cents to the price of each gallon, that petty change can add up to $11 million a day.

The Clean Air Act (search) requires the most smog-filled of U.S. cities to use cleaner-burning gas that’s too expensive for smaller towns. Add that to the various formulations based on climate, landscape and altitude, and you’ve got 18 different blends of gas in this country.

Still, the American Petroleum Institute (search), which represents producers, refiners and suppliers, says now is no time to streamline because of the huge investments the industry has made to provide the special blends.

President Bush is considering requests from California and New York to waive their required use of boutique-blended gas — a move environmentalists would fight. The Senate is expected to take up the debate this summer.

Click here to watch a report by Fox News Channel's Alisyn Camerota.