Insights on Gas Prices in Colorado: Market Stability Despite Reformulated Gas Requirement

Gas Prices in Colorado Remain Steady Despite Reformulated Gas Requirement

The threat that a specialized blend of gasoline would send gas prices in metro Denver and the northern Front Range skyrocketing fizzled faster than a July 4th sparkler. Gas prices in the region have remained steady since motorists started using reformulated gasoline, a special blend that produces less ozone pollution. The Environmental Protection Agency mandated the regions gas stations sell the blend from June to September after declaring Colorado was in severe violation of federal air quality standards. Governor Jared Polis and representatives from the oil and gas industry warned gas prices could increase by as much as 60 cents per gallon when the new requirement went into effect on June 1.

The EPAs prediction has proven to be more in line with what drivers have paid at the pump. As of Tuesday, the average cost of a gallon of gas in Colorado was $3.37, up 3 cents since June 2 but down 38 cents from the same time last year. Gas prices jumped 6 cents a gallon overnight Tuesday in anticipation of the July 4 holiday as families hit the roads for vacations and family gatherings. Skyler McKinley, a spokesman for A Colorado, said the concerns about gas prices reaching nearly $4 per gallon were worst-case scenarios that would have been caused by supply chain shortages or other disruptions. But those scenarios have not developed.

Gas Prices Across the Rocky Mountain Region

The average fuel price in the Rocky Mountain region has fallen about 1 cent since last month, reaching an average of $3.35 per gallon on Monday. Gas prices across the region in the last year have been as low as $2.67 on Jan. 22, 2024, and as high as $4.07 on Sep. 18, 2023. A year ago, the average gas price in the Rocky Mountain region was 12% higher at $3.79 per gallon. The U.S. Energy Information Administration's tally of prices in the Rocky Mountain states includes Colorado, Idaho, Montana, Utah, and Wyoming.

The most immediate threat to gas prices is Hurricane Beryl, which made landfall Monday on the Caribbean island of Carriacou and started barreling toward Jamaica after becoming the earliest Category 5 storm on record in the Atlantic. Its projected path could impact refining capacity nationwide, potentially affecting U.S. gas prices. Ongoing conflicts in the Middle East and Ukraine also contribute to gas price fluctuations, as does OPEC production. Part of the debate in Colorado involved the impact of reformulated gas on air quality and whether the pollution reduction would be worth the extra cost to consumers.

Impact of Gas Prices on Consumers and Industry

Suncor Energy spent $45 million at its Commerce City refinery to make and store the special blend locally. Suncor supplies 35% to 40% of the gas sold in Colorado, ensuring a ready supply that doesnt have to be imported from other states. The EPA estimated that using reformulated gasoline in Colorado over the summer would eliminate 210 tons of volatile organic compounds and 50 tons of nitrogen oxides. Gasoline prices are volatile and influenced by events out of the control of gas station owners, refineries, and politicians. Governor Polis continues to advocate for a federal waiver in case gas prices spike this summer, as prices have stabilized after initially increasing when the reformulated gas requirement went into effect.

In conclusion, gas prices in Colorado and the Rocky Mountain region have seen fluctuations but have largely remained stable despite the introduction of reformulated gasoline. Consumers and industry stakeholders continue to monitor factors like hurricane season, global conflicts, and production levels that could impact gas prices in the coming months. The debate around the benefits of reformulated gas for air quality and its cost implications for consumers remains ongoing.