EPA extends emergency fuel waiver on Midwest RBOB to Sept. 15

The US Environmental Protection Agency is extending its emergency fuel waivers in Illinois, Indiana, Michigan, and Wisconsin through Sept. 15 to ensure that an adequate supply of gasoline remains available to affected consumers in the waiver area until regular supply is restored, the EPA said in an Aug. 28 notice.

Severe storms and a nearby tornado touched down in Chicago July 15, leaving ExxonMobil's Joliet refinery, located in Channahon, Illinois, without power for weeks as the region lost power transmission capabilities.

The 251,800 b/d refinery is key to refined-product supply in the area and forced ExxonMobil to stop supplying to its exchange partners: BP, Phillips 66, and Marathon Petroleum. The refinery outage sent them scrambling for alternate supply sources and pumped up prices.

Although ExxonMobil began working toward normal operations on Aug. 7, the EPA determined that supply impacts continue to be felt a month after Joliet lost power.

Latest US Energy Information Administration data shows Midwest gasoline inventories falling 26,000 barrels, to 47.403 million barrels in the week ended Aug. 23. Imports doubled to 2,000 b/d over the same period. The last time imports were higher was the week ended July 26 at 3,000 b/d, a week after the storms hit.

As a result, the EPA is issuing an extension to the original waiver of the federal RVP requirements for reformulated gasoline, and of the Michigan federally approved low volatility gasoline CIPs that apply in the waiver area.

Under the temporary waiver, producers will be able to produce, sell and distribute gasoline in the waiver area with RVP of no more than 9.0 psi, or 10.0 psi if the gasoline contains from 9% to 15% ethanol.

The waiver is effective Aug. 28 and will continue through Sept. 15.

"The EPA has concluded, with DOE's [Department of Energy] concurrence, that it is necessary and appropriate to take action to minimize or prevent disruption of an adequate supply of gasoline to consumers by extending the waiver to Sept. 15, 2024," the EPA said in its statement.

"Given the length of the refinery shut down and short timeframe before the end of the summer volatility control season on September 15, 2024, a transition back to low-volatility gasoline immediately prior to Sept. 15 would create supply constraints in the affected region," the EPA said.

On Oct. 28 Platts assessed generics RBOB at NYMEX October RBOB plus 10.25 cents, and BCX RBOB at futures plus 13.75 cents/gal.