Departmental data indicates that today's rollback will boost fuel costs by 76 cents per gallon
The Department of Energy's 2025 Annual Energy Outlook (AEO2025) projects a significant increase in gasoline prices if the Environmental Protection Agency (EPA) rolls back its emissions and fuel economy standards. According to the AEO2025 Reference case, gas prices could rise by approximately 76 cents per gallon if these regulations are eliminated.
The reason behind this projected increase is that maintaining the EPA's rules promotes the use of more fuel-efficient, lower-emission vehicles. This, in turn, reduces demand for gasoline and puts downward pressure on prices. On the other hand, eliminating these rules would encourage less fuel-efficient vehicles, increasing fossil fuel consumption and driving fuel prices up.
The AEO2025 Reference case also includes natural gas price projections, noting regional differences and an overall increase from $2.19/MMBtu in 2024 to $4.80/MMBtu in 2050. However, the rollback of emission regulations specifically affects gasoline costs.
The proposed rollback of the EPA's regulations is not yet finalized and will go through a public comment period in the coming months. The EPA's Chief Saboteur, Lee Zeldin, has expressed a desire to delete the EPA's "Endangerment Finding," which is a scientific finding that climate change harms humans. The proposed rollback aims to justify rolling back Biden's emissions rules, which are estimated to save over a trillion dollars in fuel and health costs.
It's important to note that this potential increase in gasoline prices could have a ripple effect on other costs, such as home energy costs, which could rise by $400 annually, according to some analyses. Additionally, the rollback could potentially lead to a ballooning of the federal deficit and the loss of up to 2 million US jobs, as some manufacturing may be sent overseas, particularly to China.
In a positive note, consumers can still take advantage of the 30% federal solar tax credit before it ends this year. The EnergySage website offers a free service that helps consumers find trusted, reliable solar installers and save 20-30% compared to going it alone.
References: 1. Media analysis on the DOE's projection 2. DOE's 2025 Annual Energy Outlook
- The increase in gasoline prices projected by the Department of Energy's 2025 Annual Energy Outlook (AEO2025) could be mitigated by an emphasis on green energy solutions, such as electric vehicles (EVs) and solar power.
- The proposed rollback of the EPA's regulations, which could lead to an increase in gasoline prices, contradicts the scientific findings of environmental-science research that links climate change with harmful impacts on human health.
- It's crucial for the industry to consider the long-term financial implications of climate change, as failure to address these issues may result in astronomical costs, like rising energy prices and potential losses in the millions of jobs.
- The transition to electric vehicles and solar power not only offers environmental benefits but could also provide significant savings in the form of reduced fuel and health costs, as highlighted in the DOE's 2025 Annual Energy Outlook and other analysis reports.
