EPA extends emergency relief for Midwest gasoline supply

The U.S. Environmental Protection Agency (EPA) has renewed an emergency waiver for summer gasoline requirements in four Midwest states for a second time as a result of the supply emergency following the shutdown of ExxonMobil’s Joliet refinery in Illinois in July and early August.

The exemption for Illinois, Indiana, Michigan and Wisconsin lifts federal anti-smog rules that require the sale of more expensive summer gasoline in the US during the hottest months of the year.

The waiver, first issued on July 31 after ExxonMobil’s Joliet refinery was shut down on July 15, has now been extended for a second time until September 15.

Exxon’s Joliet refinery, 40 miles southwest of Chicago, is equipped to handle 275,000 barrels of crude oil per day, producing about 11 million gallons of gasoline and diesel each day.

The facility was shut down in mid-July following a power outage caused by a storm.

Following a three-week outage, Exxon began restarting some units at the refinery on Aug. 7.

As a result of the outage and other disruptions in the Midwest, regional gasoline prices rose in early August, the US Energy Information Administration (EIA) said last week.

A series of refinery outages in Chicago and Ohio pushed Midwest prices of petroleum products, especially gasoline, higher than the U.S. average, the EIA said.

While retail gasoline prices in the Midwest are typically lower than the U.S. average due to production from local refineries and lower regional fuel taxes, the average retail gasoline price in the Midwest was 1% above the average U.S. for three straight weeks after blackouts, the EIA noted.

Aside from Exxon’s Joliet refinery, operators also reported temporary shutdowns at Ohio facilities, including Cenovus’ 183,000 bpd Lima and 150,800 bpd Toledo refineries.

Refinery utilization in the Midwest fell 11 percentage points to 86% due to these outages, reducing refinery production of gasoline, diesel and other refined petroleum products.

After these refineries resumed operations in the second week of August, Midwest refinery utilization rose more than 10 percentage points the following week to 97% as of August 16.

By Charles Kennedy for Oilprice.com

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