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EPA Waives Clean Air Act Requirements for Colonial Pipeline after Explosion

The Colonial Pipeline explosion that occurred on Monday, October 31, 2016, was catastrophic, killing one worker and shooting flames 100 feet high.  The explosion, which was caused during an effort to fix a line breach also injured four additional workers, and crippled gasoline supplies to the northeast.  This explosion on the Colonial Pipeline and the resulting severing of gasoline supply to the northeast caused the Environmental Protection Agency (EPA) to issue a waiver of the federal RFG (reformulated gasoline) requirements as promulgated under the Clean Air Act (CAA).

The CCA was passed in 1990 and the first RFG program began in 1995.  RFG is required in portions of 17 states, including parts of Pennsylvania, and the District of Columbia to combat high smog levels.  Today, the Administrator of the EPA, Gina McCarthy, issued a waiver of these requirements because the Colonial Pipeline was a crucial conduit of RFG supply.  Ms. McCarthy stated that the “pipeline failure affects the petroleum distribution system in the affected RFG-covered areas and has resulted in significant supply shortages of RFG to these areas.  Additionally, the pipeline failure caused supply shortages of conventional gasoline in other non-RFG areas” where conventional gas could have been comingled with reformulated blendstock for oxygenate blending (RBOB) which can be combined with specific oxygenate to produce RFG.  With both the supplies of regular RFG cut-off and conventional gasoline used to produce RFG cut-off, the EPA in conjunction with the Department of Energy determined that the only way to minimize “further disruption of an adequate supply of gasoline to consumers” was to waive the RFG requirement.[1]

Colonial is a major pipeline for shipping gasoline from Texas through the eastern part of the U.S. and up to the northeast.  The Colonial pipeline ships about 1.3 million barrels of gasoline products daily.  This pipeline was shut down for 12 days prior to this most recent event and it caused dramatic spikes in fuel prices all along the east coast.

The EPA Administrator went on to state that she “determined that an ‘extreme and unusual fuel supply circumstance’ exists that will prevent the distribution of an adequate supply of gasoline to consumers.”[2]  Under this waiver, the 17 affected states will be permitted to sell conventional gasoline.  The waiver is in effect until November 23, 2016, with any necessary depletion of supplies allowed until December 23, 2016.  Wholesale purchaser-consumers and retailers will be allowed to sell conventional gasoline brought in under this waiver until those supplies are depleted even if such depletion requires sales beyond December 23, 2016.

Last week, as flames reached 5 feet into the air, emergency personnel made the decision that it was safer to let the fire burn itself out than to try to fight it.  Fortunately, the explosion occurred in a relatively non-populated area of Alabama.  Initially, Colonial expected the line would be shut down for more than a week.  The EPA reserved the right to extend the waiver of the RFG requirements beyond those stated in its November 3, 2016 Letter.  Although Line 1 resumed service on Sunday, Colonial issued a statement that “it is expected to take several days for the fuel delivery chain to return to normal.”

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