If you live in the heart of the Midwest soaring fuel prices are a reality, not a nightmare, figment of your imagination or Wile E. Coyote cartoon. An equipment failure at one the region’s largest oil refineries caused an immediate and painful spike at the gas pump for consumers across the Midwest this week. The BP Whiting Refinery located on the southwestern shore of Lake Michigan, had a breakdown of its crude distillation unit. The device, not made by ACME apparently, is critical to the output of 120,000 barrels of gasoline a day. Whiting is the sixth-largest refinery in the United States and is a pivotal supplier of gasoline for drivers in Illinois, Indiana, Wisconsin, Michigan, Ohio, Kentucky and Missouri.
“Gasoline prices are already on their way up and are expected to go up more than $1 a gallon in these markets,” according to NCGA President Chip Bowling. “Everyone is talking about these crazy gas prices right now so I am encouraging folks to use this as a teaching opportunity. This is a great way to drive home to family, friends and others how tenuous our relationship is with petroleum. We rely too much on imported oil and on a small number of aging oil refineries.”
A 250,000 barrel-per-day crude distillation unit went down with a mechanical problem at the facility, knocking out half the plants productive capacity for an undisclosed time.
“All of the lost gasoline output resulting from this outage could be offset if all gasoline in the Midwest region immediately transitioned from E10 to E15,” said Bob Dinneen, CEO of the Renewable Fuels Association. “Moreover, ethanol in the Chicago wholesale market is roughly $1 per gallon lower than gasoline today. That means if refiners and blenders serving the Midwest market immediately switched to producing E15 to blunt the impacts of this refinery outage, gas prices would instantly fall by at least 5 cents per gallon and drivers in the Midwest would save about $6 million per day,” he said.
RFA is calling on EPA to immediately waive RVP requirements for E15 and also allow E12 blending–based on the fact that it is substantially similar to E10–in the Midwest region to facilitate expanded ethanol blending and blunt the consumer impacts of this refinery outage.
“I hope the Environmental Protection Agency is paying attention. If cleaner air alone is not enough to get them to leave the current Renewable Fuels Standard alone, then maybe this incident at Whiting will convince them,” Bowling said. “Incidents like these are not unusual and are getting more common as refineries continue to age and oil companies show no stomach for building new facilities. Agriculture has the corn and the desire to boost production.”