US EPA issues waiver for gasoline in Florida in response to Hurricane Idalia

The US Environmental Protection Agency has issued a temporary waiver of summertime volatility regulations for gasoline sold in Florida to address fuel supply shortages as Hurricane Idalia makes landfall.

"Storm preparations have resulted in the closure of multiple ports in the state that receive fuel and have restricted and interrupted fuel terminal operations, preventing an adequate supply of gasoline," the EPA said in a letter to Florida Governor Ron DeSantis Aug. 30. "In addition, evacuations -- including mandatory evacuations -- are straining available supplies."

Florida depends largely on waterborne refined products, as there are no refineries in the state, with refined products imports primarily entering Port Canaveral and Port Everglades on Florida's east coast, Kpler vessel tracking data shows. However, Kpler data does not include barges, which are used regularly to delivery refined products into Kinder Morgan's Tampa terminals on Florida's west coast.

Canaveral as well as the ports of Tampa, Manatee, St. Petersburg and Ft. Meyers were closed to traffic Aug. 29 by the US Coast Guard. But Everglades was returned to normal operations the afternoon of Aug. 29.

DeSantis on Aug. 29 requested that certain federal fuel standards under the Clean Air Act be waived in response to the fuel supply emergency caused by the hurricane.

The EPA, in coordination with the Department of Energy, said it determined that the hurricane presented "an extreme and unusual fuel supply circumstance" that was neither reasonably foreseeable nor "attributable to a lack of prudent planning on the part of suppliers of the fuel to these areas."

The waiver will allow gasoline with a Reid vapor pressure (RVP) up to 11.5 psi to be produced, sold and distributed throughout the state, whereas CAA regulations otherwise limit RVP to 9 psi during the summer to limit the formation of ozone pollution. The letter to DeSantis clarifies that gasoline containing between 9% and 15% ethanol may have an RVP up to 12.5 psi.

The waiver took effect immediately Aug. 30 and is valid through Sept. 15, which marks the end of the summertime restrictions on gasoline.

Storm weakening

Petroleum markets are monitoring the progress of Idalia as expected power losses from the destructive winds and heavy rain in parts of Florida, Georgia and the Carolinas could weaken energy demand and prices.

NYMEX October crude was trading around $80.98/b, down 18 cents, midday Aug. 30.

NYMEX September RBOB was trading around $2.8116/gal midday Aug. 30, up 2.11 cents, while NYMEX September ULSD was trading around $3.1181/gal, down 9.14 cents.

Idalia hit land around 7:45 am ET Aug. 30 near Keaton Beach, Florida as a Category 3 hurricane with maximum sustained winds at 125 mph, the National Hurricane Center said.

However, "it has been weakening quickly since then over northern Florida," with winds estimated around 90 mph, according to the Center's latest update. The hurricane is forecast to slow to around 75 mph winds by the time it nears Georgia's border with South Carolina late Aug. 30 and be downgraded to a tropical storm while moving near the coast of South Carolina.

While Idalia appears to be staying clear of most Gulf of Mexico offshore oil and gas platforms, producers took precautions, as they did in September 2022 ahead of Hurricane Ian, which also made landfall on Florida's western coast.

For instance, Chevron, the third-largest oil producer in the US Gulf, evacuated non-essential personnel from its Blind Faith and Petronius platforms and all personnel from the Genesis facility that is currently being decommissioned.

Petronius, located in about 1,750 feet of water, is in the Viosca Knoll area of the Gulf, about 130 miles southeast of New Orleans. Blind Faith is located further south, in the Mississippi Canyon region of the Gulf, in about 7,000 feet of water. And Genesis is about 150 miles southwest of New Orleans.

Several Gulf producers indicated that they expected production levels would remain stable.