NATSO Hurricane Harvey Update

Federal agencies have continued to waive fuel and trucking restrictions in the wake of Hurricane Harvey.

NATSO has been in close contact with EPA officials and has been aggressively pushing for fuel waivers to enable product to get to where it is needed. NATSO is also working with the Department of Homeland Security in pursuit of a Jones Act waiver to allow foreign-flagged vessels to carry cargo between U.S. ports. This would also help enable product to get to where it is needed.

Below is the latest updates with respect to fuel and trucker hours-of-service waivers. Below that is a graphic outlining the impact Hurricane Harvey has had on U.S. refineries.

Fuel Waivers: 
Yesterday afternoon, EPA issued an expanded fuel waiver that waives summer Reid Vapor Pressure (RVP) requirements in 38 states and Washington, D.C. The waiver will temporarily remove the requirements for low volatility conventional gasoline and Reformulated Gasoline (RFG) in the following areas, through September 15: 

• East Coast: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, Delaware, District of Columbia, Maryland, New Jersey, New York, Pennsylvania, Florida, Georgia, North Carolina, South Carolina, Virginia, and West Virginia;
• Midwest: Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Ohio, Oklahoma, Tennessee, and Wisconsin;
• Gulf coast: Alabama, Arkansas, Louisiana, Mississippi, New Mexico, and Texas.

Under this temporary waiver, regulated parties may produce, sell, or distribute winter gasoline (including gasoline blendstocks for oxygenate blending (BOBs)) with an RVP of 11.5 pounds per square inch (psi) before the addition of any ethanol in conventional gasoline areas within the designated states. In addition, EPA will allow regulated parties to produce, sell, or distribute conventional winter gasoline (including BOBs) with an RVP of 11.5 psi before the addition of any ethanol in any RFG covered area within the designated states and D.C. Finally, EPA waived the regulatory provision prohibiting any person from combining any RFG blendstock for oxygenate blending with any other gasoline, blendstock, or oxygenate, unless certain conditions are met.

The Agency's temporary waiver will, in effect, permit the sale of up to 11.5 psi E15 in 38 states and Washington, D.C., effectively ending the summer low RVP sales restrictions. The fuel waiver is available here.

Hours of Service Waivers:
Late last night, the Federal Motor Carrier Safety Administration (FMCSA) issued a broad hours-of-service emergency waiver that applies in the following states:

Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, D.C. and West Virginia.

This waiver will remain in effect until September 30. The waiver can be found here.

State of U.S. Refineries 
Hurricane and Tropical Storm Harvey has reduced production of Texas and Louisiana Gulf Coast oil refineries by more than 4 million barrels per day — to less than half of daily capacity — cutting U.S. production capacity by about 25 percent. Corpus Christi refineries are beginning to restart, but Houston-area operations might not resume for more than two weeks. Indications are that the amount of work necessary to bring these plants back on line will be substantially greater -- and take substantially longer -- than was the case after hurricanes Katrina and Rita. Combined with pipeline outages, the energy industry could be in for a long slog in terms of recovering from Harvey's impact. 

View a large version of the graphic here.