RFA asks EPA to expand Hurricane Harvey fuel waiverRFA asks EPA to expand Hurricane Harvey fuel waiver
Ethanol group asks EPA to relax Reid Vapor Pressure limits for ethanol blends.
August 29, 2017
In a letter to Environmental Protection Agency Administrator Scott Pruitt Monday, the Renewable Fuels Assn. (RFA) asked the agency to “take immediate action to expand the scope and geographic coverage” of the fuel waiver the agency issued Aug. 26 in response to Hurricane Harvey.
“While EPA’s Aug. 26 waiver of certain reformulated gasoline (RFG) and Reid Vapor Pressure (RVP) requirements was a welcome step, it is not delivering meaningful relief from escalating gasoline prices in Texas and across the rest of the country,” the letter explained.
Specifically, RFA is asking EPA to use its authority to relax the RVP limits to 10 psi for all finished gasoline blended with ethanol in conventional and RFG areas nationwide, through Sept. 15.
“The action we are requesting would significantly enhance flexibility for blenders and refiners and help alleviate the logistical challenges and shortfalls that are causing gas prices to spike,” RFA explained. “Relaxing RVP requirements to 10.0 psi nationwide would immediately allow gasoline blenders to produce fuel that complies with EPA regulations using any available gasoline blendstock on the market. It would also immediately allow blenders to use up to 15% ethanol by volume in all finished gasoline in all areas of the country, providing a badly needed source of additional supply and helping to offset gasoline shortfalls resulting from refinery and terminal outages.”
“Ethanol is priced roughly 20 cents/gal. below gasoline blendstock today, and supplies are ample in all regions of the country,” RFA president and chief executive officer Bob Dinneen said. “We are simply asking EPA to take action that would allow gasoline blenders to maximize their use of low-cost, locally available ethanol supplies to help alleviate gas price spikes resulting from Hurricane Harvey. In effect, we are requesting that EPA end the summer RVP control season a few weeks early so that ethanol can more effectively help with the current fuel supply emergency.”
Bryce Knorr, grain market analyst for Farm Futures, noted Aug. 28 in his weekly energy review that the region inundated by the huge hurricane accounts for around 25% of U.S. oil production. Crude prices remained fairly calm. While rigs were evacuated in the Gulf of Mexico, oil won’t be flowing to the region’s refineries. Texas accounts for 30% and Louisiana 17% of the nation’s capacity.
“Some of those refineries could be closed indefinitely, depending on flooding and loss of power. Midwest refineries continue to run at near peak efficiency, and their output could be siphoned off to other regions like the East Coast, which depend on Gulf production,” Knorr noted.
Ethanol prices didn’t get any support from the hurricane chaos, at least in the futures market, where prices fell to the lowest level of 2017, Knorr added. Ethanol production remains near record levels.
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