As Pipeline Shutdown Sparks Fuel Shortage Fears, Groups Say Ethanol Could Ease Supply Issues

Source: By TYNE MORGAN, AgWeb • Posted: Wednesday, May 12, 2021

Fuel prices across the country were already on the rise, but now a cyber attack on one of the largest fuel pipelines in the U.S. is creating fears about a possible fuel shortage. The White House said Monday a shortage isn’t imminent, and the pipeline can be brought back online relatively quickly.

Investigators believe a criminal group from Russia is behind the attack over the weekend. The ransomware is disrupting the Georgia-based Colonial Pipeline, which operates the pipeline that carries millions of barrels of gasoline, diesel and jet fuel to nearly half of the East Cost.

While the down pipeline is creating supply shortage fears, the Biden administration stated Monday it will not result in a shortage.

“Right now there is not a supply shortage,” President Biden’s homeland security adviser, Elizabeth Sherwood-Randall  said during Monday’s press briefing. “We are preparing for multiple contingencies because that is our job… Colonial is currently working with its private cybersecurity consultants to assess potential damage and to determine when it is safe to bring the pipeline back online.”

According to AgDay, experts worry the attack could contribute to already rising gas prices. In response, the Department of Transportation (DOT)  is already taking action. DOT is temporarily allowing truck drivers transporting gas to work longer days  in an effort to try to help keep supplies up.

Renewable fuels groups are offering up a solution that could help ease supply pressures.  Both Growth Energy and Renewable Fuels Association (RFA) are now calling on EPA to take immediate steps to allow low-carbon ethanol to fill the void on the East Coast. In a letter to EPA Administrator Michael Regan, Geoff Cooper, who is the CEO and President of RFA, asked EPA to suspend the regulatory requirements that the groups say otherwise would impede and delay retailers from expanding the use of E15 to help offset fuel supply shortages.

But RFA isn’t alone. Growth Energy also sent a letter to the Biden administration on Tuesday with similar requests.

“The waivers that they announced this morning are pretty consistent with what they would do when we have a fuel supply emergency,” Skor told AgriTalk host Chip Flory on Tuesday. “So, they waived the RFG and the other RVP requirements, essentially saying you can use gasoline from conventional areas. And that just eases up a fuel providers ability to access fuel.”

However, Skor says there are more actions the Biden administration could take in order to alleviate the gasoline supply pressures, especially when it comes to ethanol.

“They could make E15 available immediately at Terminal. And that would help ease the pressure, as well. And and so we are sending a letter to the White House today to make that request,” Score said on AgriTalk.

In the letter sent by RFA, Cooper also outlined why an overreliance on petroleum is a longer-term issue.

“The Colonial pipeline outage underscores a larger need for greater diversity and flexibility in our transportation fuels sector,” Cooper wrote. “Overreliance on petroleum has left our transportation fuels infrastructure vulnerable to disruption, with American consumers bearing the brunt of resultant price spikes and fuel shortages. By comparison, the fuel ethanol industry’s infrastructure is unconcentrated, dispersed, and uses a variety of efficient delivery channels. As the Biden administration pursues initiatives to expand and fortify our nation’s energy infrastructure, the Colonial pipeline shutdown serves as a poignant reminder that ethanol biorefineries are strategic assets that can and should play a larger role in powering America forward.”

Cooper pointed out that some 180,000 barrels per day of ethanol production capacity is currently idle and could be “quickly activated or reoriented to help alleviate impending fuel shortages on the East Coast.”