US refiner Valero supports request for EPA waiver on biofuel mandate
HOUSTON (ICIS)–US refined products and ethanol producer Valero supports a request, from five US governors, for a US Environmental Protection Agency (EPA) waiver in order to forego the biofuels blending mandate, as demand for gasoline is weak and storage is quickly filling. Valero executives offered their support during an investor conference call.
The governors of the five US states – Louisiana, Texas, Oklahoma, Utah and Wyoming – asked for the waivers for the Renewable Fuel Standard (RFS) for their refiners. The governors, in a letter to the EPA, cite plunging fuel demand as the reason for the request.
“As our country comes to grips with this national emergency”, the governors wrote, “continuing to implement the current [mandate] imposes an added obligation that would ‘severely’ harm the sector, and consequently harm the economy of the states and the nation.”
Storage for gasoline is also a major industry concern, with producers looking into floating storage to help offset the glut of supply in the US as weak demand persists.
Storage for refined products has been an issue for many producers, resulting in a multitude of run cuts and plants being idled.
The oil market has seen a healthy build in crude inventory, mostly due to refineries cutting back their crude runs as demand significantly drops off.
The next key market to watch is US gasoline storage availability, according to sources. This could be a much larger problem than the lack of crude storage, forcing even more refinery cuts.
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