An emergency fuel waiver by the Environmental Protection Agency is allowing refineries and refined product terminals to supply gasoline with a higher Reid vapor pressure this summer than previously permitted. As we discuss in today’s RBN blog, the waiver may well increase gasoline supply and improve refinery and blender economics.
At first glance, the Environmental Protection Agency’s (EPA) proposal to facilitate increased sales of E15 — an 85/15 blend of gasoline blendstock and ethanol — by putting it on the same summertime regulatory footing as commonly available E10 in eight Midwest/Great Plains states might seem like a boon to corn farmers and ethanol producers. But as we discuss in today’s RBN blog, there are a number of economic, practical and even psychological barriers to broadened public access to — and use of — E15 that go well beyond the specific regulatory issue the EPA proposal addresses. As a result, as we see it, EPA’s plan is unlikely to boost E15 demand in any meaningful way, at least for now.
If you’ve filled up the tank in your car, SUV, or pickup in the past few days, you probably bought your first batch of winter-blend gasoline since the spring. It’s unlikely that you noticed a difference — only a refining geek with a nose for this sort of thing would — but winter gasoline has a higher Reid Vapor Pressure than summer gasoline, and therefore evaporates more quickly and emits more fumes. There’s a logic to EPA’s mandated switchover from lower-RVP gasoline to higher-RVP gasoline each September, and their switch back to lower-RVP each April/May. For one thing, using different gasoline blends during the colder and warmer months helps ensure that your engine runs well year-round; for another, reducing gasoline vapor pressure in the summer reduces emissions that contribute to smog. Today, we discuss gasoline RVP, why it matters, and how refineries ramp it up and down. (A hint is in the blog’s title.)
It hasn’t been widely reported, but during cold snaps in late fall and early winter, a number of crude oil producers in the Permian Basin have faced a “perfect storm” of events that made it challenging to meet crude pipelines’ vapor pressure standards. At first glance, this may seem like a problem for “the technical folks” to deal with, but in fact the issue has been affecting the ability to move crude to market, and the price of oil at Midland, TX versus the crude hub at Cushing, OK. It has even forced Permian producers to “shut in” some crude production—at least for a time—along several major pipelines in the region because they’ve been unable to adequately prepare their crude for piping or trucking. Today we examine an under-the-radar problem that’s been vexing producers in the U.S.’s leading crude oil play, and affecting oil prices and markets.
