Casey to EPA: As Gas Prices Spike, Consider Summer Blend Requirement Waiver

Rising Gas Prices and Decreased Supply in Pittsburgh Region Could Hit Consumers in Wallet

Casey Calls on EPA to Consider Temporary Waiver for State in Light of Skyrocketing Gas Prices

PITTSBURGH, PA – U.S. Senator Bob Casey (D-PA) today called on the U.S. Environmental Protection Agency (EPA) to consider granting a temporary waiver for Pennsylvania for summer gasoline blend requirements, which would help alleviate supply constraints and combat skyrocketing prices at the pump.

“In dealing with rising gas prices, the Pittsburgh region faces the additional challenge of a requirement to use a special kind of gasoline in the summer months,” Senator Casey said. “During this difficult economic time and because of potential supply shortages that could further increase prices, the EPA should consider a waiver that will give consumers in southwest Pennsylvania a break at the pump this summer.” 

Standing at a Citgo station, Senator Casey made the case that the EPA should consider granting  a waiver that would temporarily release the seven-county Pittsburgh region from the requirement to use a special gasoline blend during the summer months, if the Commonwealth requests it. Supplies of the blend are limited and shortages could be exacerbated by decreased refining capacity, Senator Casey wrote in a letter to EPA Administrator Lisa Jackson. These supply shortages could further increase the price at the pump and burden consumers at a time when the economy needs a sustained boost.

While there is no quick fix to the issue of rising gas prices, Senator Casey has laid out a series of common-sense steps to combat the problem, including:

  • Pushing legislation to give the U.S. tools to crack down on collusive practices of oil producing countries;
  • Urging the Administration to quickly enact strong rules to eliminate excessive oil speculation, which jacks up the price of gasoline; and
  • Boosting Pennsylvania’s natural gas industry to support energy independence and encourage the use of natural gas as an alternative fuel, reducing demand for gasoline.

The full text of Senator Casey’s letter to Administrator Jackson is below:

The Honorable Lisa P. Jackson

Administrator

Environmental Protection Agency

Dear Administrator Jackson:

Due to rising gasoline prices and expected decrease in supply in the Northeast, I am writing to express concern about summer gasoline requirements for the Pittsburgh area – specifically, that you consider the prospect of a temporary waiver of the gasoline volatility requirements as contained in the Commonwealth’s State Implementation Plan (SIP) for the Pittsburgh-Beaver Valley area.

Refinery closures in the Philadelphia area, as well as the U.S. Virgin Islands, and a limitation in pipeline capacity from other regions is likely to limit the supply of low-RVP gasoline that is available to the Pittsburgh area.

The area is expected to experience a shortage of the state-required Reid vapor pressure (RVP) of 7.8 psi gasoline (the “summer” blend).  I have heard concerns that gasoline retailers and terminals will not be able to get enough of the summer blend, and that consumers would experience the effects through price increases or unavailability of gasoline.

According to the U.S. Energy Information Administration’s February 2012 report “Potential Impacts of Reductions in Refinery Activity on Northeast Petroleum Product Markets:”

Because the specification requires a fuel unique to Pittsburgh, markets for the fuel are often tight. The Pittsburgh area historically was supplied mainly by the Philadelphia-area refineries. Even when those refineries were running, the area often faced very tight markets for their summer grade gasoline. With the refineries idled, the volumes to meet Pittsburgh’s requirements will have to come from further afield. The on-specification volumes may not be located in areas where supplies can easily be sent to meet Pittsburgh’s demand. During the summer, supply chains for Pittsburgh’s summer-grade gasoline will be stressed more than other areas in Pennsylvania, and moving requisite volumes of fuel to the Pittsburgh market could prove difficult. Some supplies currently are moving into the Pittsburgh market from the Midwest via pipeline.

My understanding is that due to encouragement from the EPA, the Commonwealth is finally considering measures to find an alternative to needing low-RVP fuel, including rewriting its SIP to no longer require low-RVP gasoline and to take other measures to improve air quality in the region.

Therefore, I request that if the Commonwealth requests a waiver, you give immediate consideration to the request to ensure supply disruptions do not hinder the area’s economic recovery.  Thank you for your attention.  I look forward to continue working with you.

Sincerely,

Robert P. Casey, Jr.

United States Senator

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