MADISON, Wis. — A massive BP refinery in Whiting, Indiana remains offline on Monday, triggering the U.S. Environmental Protection Agency to waive fuel sale rules this weekend in four states to avoid shortages.
The refinery provides more than a quarter of the fuel used in Wisconsin, and Gov. Tony Evers last week in a letter obtained by News 3 Now requested an additional waiver of another EPA rule to further stave off an increase in gas prices.
How much gas does the refinery in Indiana provide Wisconsin?
BP Whiting provides between 25 and 30% of all fuel used in the state of Wisconsin, according to a letter last week from Gov. Evers to the EPA requesting two waivers from the agency to mitigate possible fuel shortages.
According to the company, BP has three refineries in the United States, of which Indiana’s is the largest and produces about 435,000 barrels of oil daily. It’s the sixth-largest refinery in the country and the largest in the Midwest, according to an executive order declaring an energy emergency from Michigan governor Gretchen Whitmer on Sunday.
Its output amounts to 10 million gallons of gasoline a day, according to GasBuddy’s head of petroleum analysis Patrick De Haan. For perspective, De Haan said that amount of fuel fills the tanks of roughly 675,000 cars.
Will the fire drive up fuel prices?
Experts say the immediate impact of the refinery outage shouldn’t be more than a few cents in fuel prices, but impact will largely depend on how long the refinery stays offline.
“What I’ve heard is they’re trying to bring it back online, beginning the restart process, hopefully in the next couple of days. That would mean that gasoline could start flowing…later this week into the weekend,” De Haan said.
“If it doesn’t, we could be talking about more disruptions, more impact to price. But how much impact to price really depends on the duration of the downtime.”
Experts say it’s not time to panic; one of the worst things a consumer can do during a temporary outage is to buy unnecessary fuel.
“The last thing they should do is go out and fill their tank, because that will lead to price increases, and that will lead to more supply challenges,” De Haan said. “If we can just calm down and avoid filling up for the next few days, we should be able to weather the storm fairly well.”
When will the refinery come back online?
BP told Reuters on Monday morning that they were making “significant progress” towards a phased restart at the refinery. The fire last Wednesday was limited to one electrical system but led to losing other utilities elsewhere.
“BP has been fairly tight-lipped about exactly what happened and the restoration efforts, as they’re concentrating on bringing this refinery back online,” De Haan said. “So this is a situation to watch.”
In Gov. Evers’ letter on Friday to the EPA, Evers said that meetings with BP had indicated the refinery could remain shut down for the next seven to 10 days.
“The effects of the shutdown may linger longer than the seven to 10 days as the refinery becomes operational, and representatives at BP cannot assure adequate supply of gasoline to the state during this shut down period,” the letter stated.
“Importantly, this shutdown is occurring at time of highly volatile fuel prices and high demand for gasoline when supplies are already disrupted, coupled with this occurring as we approach the Labor Day weekend, which is a historically busy automobile travel period.”
How will the emergency waiver of EPA rules impact the outage?
The EPA essentially lifted the requirement on selling winter fuels during the summer for the four states impacted, including Wisconsin.
“The RVP waiver is pretty significant in trying to alleviate the situation,” De Haan said. “It will give us a buffer of time.”
Refineries are prevented from using certain components in fuel during the summer because of their volatile nature; however, lifting the rule immediately expands the gasoline available for use. That rule applies to summer fuels through September 15 this year.
Pending with the EPA is an additional request from Gov. Evers on August 26 to suspend a rule impacting the sale of special blend fuels in certain regions of Wisconsin.
“Waiving the reformulated gas regulations for Wisconsin nonattainment zones will allow more flexibility on the fuel which can be brought into the state and ensure these counties are also protected from gasoline price increases due to the refinery shut down,” Evers’ letter to the EPA stated.
Another rule for truckers carrying supplies related to the crisis was waived from the Federal Motor Carrier Safety Administration, which normally puts limits on how long truck drivers can operate.
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