OMAHA (DTN) -- An ethanol industry group is asking the federal government to expand a waiver issued this weekend to allow for the temporary use of E15 nationwide to help alleviate potential fuel shortages resulting from Hurricane Harvey.
In a letter to U.S. Environmental Protection Agency Administrator Scott Pruitt on Monday, the Renewable Fuels Association asked the agency to relax the Reid vapor pressure, or RVP, limits to 10 pounds per square inch for all finished gasoline blended with ethanol in conventional and reformulated gasoline areas nationwide through Sept. 15.
In response to the hurricane, EPA issued a waiver on Aug. 26 of certain reformulated gasoline and RVP requirements.
"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," RFA President and CEO Bob Dinneen wrote in the letter.
"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."
Relaxing RVP requirements to 10 psi nationwide would allow gasoline blenders to produce fuel that complies with EPA regulations using any available gasoline blendstock on the market, including E15.
The U.S. ethanol industry has been pushing the EPA to issue a waiver on E15 for some time, holding out hope the agency would be able to take action that would allow for year-round sales.
Dinneen said issuing at least a temporary waiver now would help to provide "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 per gallon below gasoline blendstock today, and supplies are ample in all regions of the country," he said in a statement about the request.
"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."
Dinneen said in the letter that, in the days since EPA issued the Aug. 26 fuel waiver, "market conditions have worsened and supply shortages are expected to be more severe than previously thought. Gasoline futures prices have surged nearly 10% since Aug. 24, the day before Hurricane Harvey made landfall."
So far, it is estimated the storm has caused at least 10% of the nation's refining capacity to shut down, "and analysts now expect further price surges in the wake of hurricane-related refinery and terminal outages," Dinneen said in the letter.
"In addition, both offshore and onshore drilling rigs have been idled, leading to lower crude oil production and tighter supplies for refineries in the weeks ahead."
The EPA waiver issued on Aug. 26, allows gasoline with less than 9% ethanol by volume to qualify for special provisions for alcohol blends requirement. That waiver, however, did not allow for blends up to 15% ethanol.
"Extending this temporary waiver to 15% ethanol blends would greatly assist in alleviating current price spikes and supply crunches," Dinneen writes in the letter.
"EPA has taken similar actions in the past to provide immediate relief to gasoline markets in the wake of natural disasters. We urge the agency to act immediately on this request to help alleviate the economic impacts of Hurricane Harvey on American consumers."
Read the letter to the EPA here: http://bit.ly/…
Todd Neeley can be reached at firstname.lastname@example.org
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