EPA waives ethanol requirements in coastal Louisiana as Hurricane Gustav looms; oil prices rise on Gulf disruption fears

As Hurricane Gustav churns through the heart of the US petroleum production network in the Gulf of Mexico, the EPA has exercised its authority under the Clean Air Act to temporarily waive the Reid Vapor Pressure and ethanol requirements for 16 parishes in the state of Louisiana until Sept. 8, 2008.

According to an EPA statement, “This waiver will allow greater flexibility for the fuel distribution system to be used to aid in the evacuation and subsequent return of affected residents.” The waiver was requested by Harold Leggett, Louisiana Secretary of Environmental Quality in Louisiana.

The EPA said that “extreme and unusual supply circumstances exist”, which are likely to result in a shortage of gasoline compliant with federal regulations. Following the damages of Hurricanes Katrina and Rita in 2005, gasoline supplies were released from Europe on an emergency basis when refineries and blending terminals went offline due to wind damage and storn surge. According to Angela Montoya, a meteorologist at Weather Insight, Hurricane Gustav may halt 1.27 million barrels a day of crude oil production.

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