EPA Approves Early E15 Sales as Average Gas Prices Rise

WASHINGTON, D.C. — In response to gasoline supply shortfalls and price spikes stemming from Hurricane Harvey, the U.S. Environmental Protection Agency (EPA) has taken action to authorize the sale of E15 to all 2001 and new vehicles, regardless of fuel volatility.

EPA Administrator Scott Pruitt exercised the agency's emergency fuel waiver authority to help ensure an adequate supply of fuel throughout the country, the EPA said in a statement.

The agency waived requirements for reformulated gasoline and low volatility conventional gasoline through Sept. 15 in the following states and Washignton, D.C.: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, Delaware, Maryland, New Jersey, New York, Pennsylvania, Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Ohio, Oklahoma, Tennessee, Wisconsin, Alabama, Arkansas, Louisiana, Mississippi, New Mexico, and Texas. 

"This is not the first time weather has severely impacted the Gulf Coast petroleum industry and caused economic pain to ripple across the country," said Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. "This is, however, the first time EPA has taken action to allow ethanol to help expand fuel supplies and provide extra relief for motorists. President Trump and the EPA deserve credit for taking this common sense step. The ethanol industry is ready, willing, and — most importantly — able to help."

The waiver supersedes and expands the areas covered by a waiver issued on Aug. 30. The sale of gasoline containing up to 15 percent ethanol (E15) must continue to comply with federal rules, which are designed to minimize the potential for E15 being used in vehicles that are not designed to use this fuel. 

At $2.45, today's national gas price average is the highest recorded price for a gallon of unleaded gasoline so far this year, according to AAA. The impact of Harvey at the pump is a combination of numerous refinery and pipeline shutdowns, tightened access to supply levels in the Gulf, and anticipated high gas demand surrounding Labor Day weekend.

"Consumers will see a short-term spike in the coming weeks with gas prices likely topping $2.50 per gallon, but quickly dropping by mid- to late September," said Jeanette Casselano, AAA spokesperson. "AAA does not expect refineries to be offline for months, as early reports indicate minimal to no significant damage to Corpus Christi and Houston refineries."

The states with the largest increases since Harvey reached Texas shores include:

• South Carolina — $2.63 (19 cents)
• Washington, D.C. — $2.65 (18 cents)
• Kentucky — $2.42 (17 cents)
• Georgia — $2.39 (16 cents)
• Missouri — $2.30 (16 cents)
• North Carolina — $2.36 (16 cents)
• Maryland — $2.34 (14 cents)
• Alabama — $2.22 (13 cents)
• Kansas — $2.34 (13 cents)
• Mississippi — $2.21 (12 cents)
• Oklahoma — $2.24 (12 cents)
• Tennessee — $2.26 (12 cents)
• West Virginia — $2.47 (12 cents)
• Arkansas — $2.21 (11 cents)
• Iowa — $2.40 (11 cents)
• Michigan — $2.59 (11 cents)
• Texas — $2.26 (11 cents)
• Virginia — $2.24 (11 cents)

The last time the national gas price average was $2.50 was August 2015, reported AAA.

Status on Gulf Coast Refineries & Pipelines

As of Aug. 30, the Department of Energy (DOE) reported that 10 Gulf Coast refineries remain shut down. Six refineries have begun the process of accessing damage and restarting. Two refineries in the Gulf Coast region are operating at reduced rates. In Louisiana, refineries in Lake Charles could shut down or reduce rates as Harvey moves east.

The DOE has released 500,000 barrels of oil from the U.S. Strategic Petroleum Reserve — the nation's reserve of crude oil. The oil will be delivered via pipeline to the Phillips 66 refinery in Westlake, La. According to DOE, it will continue to review incoming requests for oil in the reserve.

In addition to refinery shutdowns, several major pipelines continue to operate at reduced rates, have shut down or plan to shut down due to lack of supply. The Colonial Pipeline announced Aug. 30 that it expects to temporarily suspend its gasoline, diesel and jet fuel pipelines. With its supplying refineries closed in the area, the pipeline operator cited reduced output as the reason for suspending its transportation operations. The Pipeline originates in Houston and supplies the East Coast.

"The shutdowns do not indicate a shortage of gasoline supplies in the Gulf Coast region or across the country," Casselano said. "These are preventative measures. Overall stocks in the Gulf are above average levels and will be available to drivers once power is restored and area roads are cleared."

Refinery, pipeline and logistical problems on the Gulf Coast are expected to squeeze fuel supply delivery volumes to the Southeast, Midwest and Mid-Atlantic.

"Northeast refiners are stepping in and barging supplies to the U.S. Southeast, the Caribbean, Mexico and South America to offset the lack of supply from Gulf Coast refineries and pipelines shut down due to Harvey," Casselano added.