TO: ALL MEMBERS PENNSYLVANIA HOUSE OF REPRESENTATIVES
FROM: JOHN V KULIK, Executive Vice President
SUBJECT: PITTSBURGH SUMMER GASOLINE POTENTIAL SUPPLY ISSUES IMMINENT
DATE: March 29, 2012
Motorists in the seven counties around Pittsburgh are now facing a situation we have not seen since the Arab oil embargo in the 1970s: will they be able to buy gasoline to get to work? Fortunately we've had many warnings this was coming and the General Assembly has the ability to head off the worst of this problem-- if you choose to act.
The issue is simple. Pennsylvania regulations require a special blend of low-RVP gasoline in Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties to help fight air pollution. That gasoline is normally made by refineries and shipped to the region by pipeline. No other area within 350 miles of Pittsburgh has this same gasoline blend. In normal years the transition to the new summer time gasoline starts in April, which in the last few years has been bumpy at best. This year marketers will be focused on whether adequate supply will arrive at all. This concern will continue through the summer. Three of the refineries that did supply almost a third of the complying gasoline have either closed or will be closing by July 1.
The U.S. Energy Information Agency issued a report in the last few weeks saying the loss of the capacity from these refineries to make gasoline and other fuels will have a significant impact on the fuel market and increase prices dramatically. In particular they said the situation will be even more difficult in terms of supplying the special gasoline to Pittsburgh.
Over the last several weeks the two major pipeline companies which supply complying gasoline to Pittsburgh warned of the serious potential of supply shortages. Last year at about this same time, without closed refineries, Pittsburgh experienced significant disruption in its gasoline supplies. In fact, stories filled the news media of service stations running out of gasoline. Those issues were resolved after several weeks of uncertain supplies, but with significant price increases for gasoline. According to studies, last summer gasoline in the seven county area was ten to fifteen cents higher per gallon -sometimes more - than prices in Ohio.
As a member of the General Assembly you can take action to avoid this potential crisis. You can support Senate Bill 1386, sponsored by Senator Elder Vogel and Senator Tim Solobay, which was passed by the Senate two weeks ago. The bill is now awaiting action in the House. There are currently only five voting days on the House and Senate schedule before the low-RVP gasoline requirement kicks in. Now is the time to act before consumers in the Pittsburgh region are faced with the uncertainty of where they will get gasoline.
A fact sheet on the issue is available on the PPMCSA website.