Tropical Storm Harvey – Still CODE RED

Tank Maintenance Suggestion: If your company has underground storage tanks in the impacted zones, make sure you’re familiar with the EPA’s safety recommendations for returning the tank to service. NACS Online has compiled the information you need to make sure that no further damage comes to your tank.

Tropical Storm Harvey remains a named storm days after making landfall, a record for a Texas-bound hurricane. Rainfalls have surpassed 40 inches in some areas, and are on track to reach 50 inches before the end of the week. Harvey is currently over the Gulf of Mexico; current forecasts show the storm’s center making landfall just south of Lake Charles, LA.

As of this morning, 3.95 MMbpd of refinery production has been taken offline, according to EnergyNewsToday, and further outages are likely. That represents 41% of Gulf Coast refining capacity, and roughly 22% of total U.S. production – a sobering amount. At this point, a full recovery of U.S. production will take weeks to bring back online, though some refineries will come back online as soon as this week.

Motiva has begun to reduce output at its Port Arthur refinery as flood waters have overcome pumps, and there are rumors of a full shut down. The outage of the 610 kbpd refinery would bring the total lost refinery capacity higher. Exxon has also begun shutting down their Beaumont, TX refinery and its 348 kbpd capacity. Those two refineries together account for a full million barrels per day (42 million gallons) of production. NYMEX prices have responded, with NYMEX gasoline gaining nearly 2 cents per gallon this morning while NYMEX diesel prices remained flat. AS refinery demand for crude oil falls, WTI crude prices have stagnated, falling today to below $46/bbl.

This morning, the EPA waived Louisiana’s Low RVP requirements for gasoline, allowing higher RVP gasoline to be used in affected states. Texas had already had its LRVP requirements waived. This move will help keep gasoline more affordable for consumers in the state. Isolated brief tornadoes are a possibility in southern Louisiana, with the threat extending statewide moving into tomorrow.

Already, the storm is starting to have effects further north. Atlanta, the final market along the Colonial pipeline requiring boutique summer gasoline, is beginning to experience gasoline shortages. The city is the only area in the region requiring 7.8 LRVP summer gasoline, meaning that suppliers cannot bring in gasoline from surrounding areas to feed demand. According to Mansfield’s Southeast supply manager, gasoline supply will likely be tight in the Atlanta area until a waiver is issued and higher RVP gasoline can be used within the city. As we noted yesterday, Beaumont and Port Arthur are major supply sources for the Southeast, so these outages could begin to be felt along the Colonial Pipeline if plants are not brought back online quickly.

Mansfield’s supply and logistics team is working around the clock to assist local sites in refueling. Please contact your Mansfield sales representative or customer relationship manager for further information on how to receive fuel during this time. Below is a list of affected wholesale terminal areas:

Code Red (Areas with significantly reduced or unavailable supply)

Dallas/Ft Worth, TX

Houston, TX

San Antonio, TX

Code Orange (Areas with limited supply availability)

Austin, TX

Buda, TX

Corpus Christi, TX

Edinburgh, TX

El Paso, TX

Harlingen, TX

Odessa, TX

Waco, TX

Lake Charles, LA

Code Yellow (Areas in the path of the storm)

Beaumont, TX

New Orleans, LA

Code Green (Fully operational)

Brownsville, TX