Harvey has gas prices on the rise

Drivers along the Eastern Seaboard are beginning to feel pain at the pump as Hurricane Harvey reduces U.S. fuel-making capacity to the lowest level since 2008.

The American Automobile Association (AAA) explained the nuts and bolts of the problem in a web post earlier this week:

About one quarter of oil refining capacity in the Gulf Coast had been taken offline, according to forecasts by Oil Price Information Service (OPIS). That equates to about 2.5 million b/d. Harvey also caused eight refineries in Texas to shutdown, including: ExxonMobil Baytown (584,000 b/d), Deer Park (340,000 b/d), Pasadena Refining (115,700 b/d) and Phillips 66 Sweeny (260,000 b/d) in the Houston region, while several others are operating at reduced rates. In Corpus Christi, Flint Hills (304,000 b/d); Valero (300,000 b/d); CITGO (163,500 b/d) and Valero Three Rivers (91,000 b/d) remain offline since initial shutdowns began in advance of Harvey late last week. Over the weekend, Valero reported its refineries in Corpus Christi and Three Rivers sustained “substantial refinery impacts” and the company is evaluating infrastructure needs to determine when the refineries can resume operations. Corpus Christi is connected via pipeline to refineries in San Antonio and Nixon, TX, which can supply Corpus Christi if local refiners are offline for an extended period.

As of Thursday, Motivia’s largest in the nation refinery in Port Arthur was offline and the Colonial Pipeline, the largest for gas distribution, was shut down because of a lack of crude production along the Gulf Coast.

In an effort to ease shortages, the U.S. Energy Department said it plans to release 50,000 barrels of crude oil from the Strategic Petroleum Reserve. In addition, the Environmental Protection Agency is issueing waivers exempting many southeastern states from federal clean-air fuel requirements.

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