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 in the month since motorists started using reformulated gasoline, a special blend that produces less ozone pollution. The Environmental Protection Agency mandated the region’s gas stations sell the blend from June to September — the hot months when ozone pollution is tickets — after declaring Colorado was in severe violation of federal air quality standards.
When the new requirement went into effect on June 1, Gov. Jared Polis and representatives from the oil and gas industry warned gas prices could increase by as much as 60 cents per gallon, which would have pushed the cost of a gallon above $4 for the first time since 2022.
Meanwhile, the EPA estimated the price of gasoline would go up 3 to 5 cents per gallon.
The EPA’s 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 AAA Colorado, said he has been monitoring gas prices daily since the reformulated gas requirement began. And AAA has studied the impacts of reformulated gas in other parts of the country.
“I was surprised from that vantage point there were so many stories of doom and gloom from reformulated gas,” McKinley said. “That doom and gloom scenario was never in the cards the second Suncor decided they were going to make production here.”
Suncor Energy said it 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, so there is a ready supply that doesn’t have to be imported from other states.
McKinley 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.
Earlier this year, Polis and U.S. Rep. Yadira Caraveo, D-Adams County, lobbied the Biden administration to grant a waiver so that Colorado would not have to sell reformulated gas. The EPA, however, said it had no choice but to enforce the Clean Air Act requirement on the state, but its leaders kept the waiver request open in case of a gas shortage due to unforeseen circumstances later in the year.
In the days after the reformulated gas went into effect, prices in Colorado jumped an average of 15 cents per gallon but have since stabilized, McKinley said.
On Monday — one month after the reformulated gasoline went on sale — the average cost of a gallon of gas had actually dropped across metro Denver and the northern Front Range. Gas also is about 40 cents per gallon cheaper now than it was at the same time in 2023.
Here’s a look at the average prices for a gallon of gas of Tuesday, according to AAA Colorado:
National: $3.50
Colorado: $3.37, up 3 cents since June 2 and down 38 cents since July 2, 2023
Boulder: $3.34, up 1 cent since June 2 and down 40 cents since July 2, 2023
Denver: $3.36, up 4 cents since June 2 and down 39 cents since July 2, 2023
Fort Collins: $3.33, up 1 cent since June 2 and down 41 cents since July 2, 2023
Greeley: $3.31, up 7 cents since June 2 and down 41 cents since July 2, 2023
Gasoline prices always are volatile because they are impacted by events often out of the control of gas station owners, refineries and politicians.
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 on Tuesday after becoming the earliest Category 5 storm on record in the Atlantic, fueled by record warm waters. Its projected path would send it through Mexico’s Yucatan Peninsula, according to The Associated Press.
“Depending on where that lands it could wallop refining capacity nationwide,” McKinley said of the possibility the storm could veer toward the Gulf of Mexico, where the nation gets much of its oil.
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Beryl’s arrival early in the season and its strength also raise concerns that 2024’s hurricane season could be a bad one and that could impact U.S. gas prices, McKinley said. Ongoing conflict in the Middle East and Ukraine also causes gas prices to fluctuate, as does OPEC production.
Part of the debate in Colorado involved just how much the region’s air quality would benefit from reformulated gas and whether the pollution reduction would be worth the extra cost to consumers.
The Colorado Department of Public Health and Environment reported that Suncor’s volatile organic compound emissions increased .81 tons in the past year as it prepared to make the fuel. Volatile organic compounds react with nitrogen oxides on hot summer days to create ground-level ozone pollution, which causes brown smog to hang in the air and is dangerous to people with breathing problems such as asthma.
The EPA estimated that 210 tons of volatile organic compounds and 50 tons of nitrogen oxides would be eliminated by using reformulated gasoline in Colorado over the summer.
Richard Mylott, an EPA spokesman, said producers and suppliers were prepared for the requirement in Colorado and prices reflect that preparation.
“As is normally the case, variability in gasoline prices over the rest of the summer months will be related to driving and consumer demand around busy holidays; global, national or regional events affecting crude oil or refining capacity; and other factors that can impact prices at the pump,” Mylott wrote in an email.
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