US fuel deliveries resume, Biden urges calm: Update 3
Adds Colonial shipping details, Valero waiver.
President Joe Biden today urged drivers in the US southeast and Atlantic coast to halt panic buying as supplies across the Colonial Pipeline system return to the region over the next week.
Relaxed environmental and transportation regulations will help stretch available supplies and speed fuel to areas cut off by a nearly week-long outage of the 2.5mn b/d system moving fuel from the US Gulf coast through the southeast and into the New York Harbor market, he said in an early afternoon address.
"This is a whole of government response to get more fuel more quickly to where it's needed and to limit the pain being felt by American customers," Biden said.
Colonial Pipeline expects every US southeast and Atlantic coast market it serves to receive fuel today, and expects all systems to return to service by the end of the week.
Emergency waterborne fuel deliveries and the slowly restarting pipeline network began refilling areas hammered by panic-buying yesterday.
US regulators last night approved waivers of the Jones Act to allow gasoline and jet fuel deliveries from internationally-flagged vessels moving between US ports, including one for Valero. The movements will speed deliveries of fuel to regions drained by the shutdown of the pipeline network that started late last week.
"We will grant additional waivers if necessary," Biden said. "These steps are temporary, but they remain in place until full service is fully restored."
Operators shut the pipeline network on 7 May to stop a ransomware infection from spreading to critical pipeline systems.
Most of Florida receives waterborne fuel supplies, but southeastern states have fewer supply alternatives to the pipeline network. Though federal data showed fairly average fuel inventories for the area heading into the shutdown, the outage sparked panic buying, quickly draining retailers across the region.
The company began restarting the main segments of the network at 5pm ET yesterday.
Despite the restart of the system, ticketing, scheduling and inventory systems across the pipeline remain offline. Colonial was not allowing shippers to change any nominations.
Related news posts
JG Summit shuts Philippine cracker on technical issues
JG Summit shuts Philippine cracker on technical issues
Singapore, 10 May (Argus) — The Philippines' sole cracker operator JG Summit shut its Batangas naphtha cracker on 9 May because of technical issues. The cracker, which can produce up to 480,000 t/yr of ethylene and 240,000 t/yr of propylene, is expected to restart this coming weekend, sources close to the company told Argus . It also shut associated units — a 70,000 t/yr butadiene extraction unit and an aromatics plant with nameplate capacities of 90,000 t/yr of benzene, 50,000 t/yr of toluene and 30,000 t/yr of mixed xylenes — along with the cracker. These are also expected to return this weekend. JG Summit is keeping its downstream units running by drawing feedstock from its inventories. The producer has a 320,000 t/yr linear-low density polyethylene/high-density polyethylene (HDPE) swing plant, a 250,000 t/yr HDPE unit and a 300,000 t/yr polypropylene line at the same site. By Toong Shien Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US delays return of SPR crude until 2026
US delays return of SPR crude until 2026
Washington, 9 May (Argus) — President Joe Biden's administration has delayed by up to two years a requirement for oil companies and traders to return about 15.3mn bl of crude that have been loaned out from the US Strategic Petroleum Reserve (SPR). Oil companies and traders were initially scheduled to return up to 19mn bl of crude to the SPR from June-September and to return up to 8mn bl of additional crude over the following year. The US Department of Energy (DOE) loaned out most of that crude in 2022 because of supply shortages related to the war in Ukraine and a temporary shutdown of the Keystone pipeline. DOE had loaned the crude using a mechanism called an "exchange," under which companies agree to return the crude to the SPR at a later date, along with an in-kind payment in exchange for the loan. But over the last two months, DOE has modified at least nine contracts with ExxonMobil, Shell and other companies that had borrowed the crude, delaying the return of about 15.3mn bl of the borrowed crude to the SPR until 2026, according to contract modifications Argus Media obtained after filing a request under the Freedom of Information Act. DOE said it delayed the return of the exchange crude in support of a separate SPR program, where it has directly purchased more than 27mn bl of crude that will be added the SPR's Big Hill storage site in Texas. That purchase program will inject about 3mn bl/month to the SPR through the first nine months of this year, and DOE last week restarted efforts to buy more crude for the SPR for delivery starting in October. "These actions strategically moved back exchange returns to take advantage of stable crude oil market windows to directly purchase oil at a good price for taxpayers, while having consistently available capacity to drawdown in the event of an emergency," DOE said. The nine contract modifications were signed between 26 March and 16 April, at a time when Nymex WTI spot prices briefly surged past $80/bl, to the highest price in more than five months. Delaying the return of the exchanges will effectively free up crude that would otherwise have been injected into the SPR in June-September, during the peak of the summer driving season. Nearly all of the revised contracts will delay the return of "all remaining exchange oil" until July-October 2026. Republicans have repeatedly attacked the administration's management of the SPR, which they argue is dangerously low after Biden ordered the emergency sale of 180mn bl of crude from the reserve in 2022 in response to the war in Ukraine. Republicans have pushed the administration to prioritize refilling the SPR, which is at about half of its design capacity with 367.2mn bl of crude, given the value the reserve could have in mitigating supply shortages. US energy secretary Jennifer Granholm, in congressional testimony in March, said the administration was carrying out a plan to refill the SPR to "essentially where we would have been" if the emergency sales had never happened. DOE has already been able to cancel 140mn bl of congressionally mandated SPR sales and lined up the purchases of more than 30mn bl of crude. DOE also has said it "accelerated" the return of 4mn bl of crude exchanges. By Chris Knight SPR crude injections from exchanges mn bl Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vertex to pause Mobile renewable fuels refining
Vertex to pause Mobile renewable fuels refining
Houston, 9 May (Argus) — US specialty refiner Vertex plans to pause renewable fuels production at its 88,000 b/d Mobile, Alabama, refinery by the end of the year, returning a converted hydrocracker to produce what it says are wider-margin fossil fuel products. Vertex completed the conversion of the Mobile refinery and produced its first barrels of renewable diesel (RD) in May last year , having bought the refinery from Shell in 2022 . The company plans to use a third quarter turnaround to convert its renewable hydrocracker back to petroleum fuels production and to be up and running by the end of the year, after facing significant macro headwinds for renewable fuels, the company said on an earnings call today. The decision to return to full fossil fuels production is ultimately a near-term financial decision for the company which has an outstanding $196mn term loan, management said on an earnings call Thursday. The time line for a return to petroleum product production is contingent on permitting approvals and a successful completion of the turnaround and catalyst change in the unit. Vertex plans to sell its renewable feedstock inventories prior to the conversion. Vertex said it will retain the flexibility to return to renewable fuels processing should market conditions improve for the fuels, but does not believe headwinds to renewable markets will abate in at least the next year and a half. Conventional crude and other feedstock throughputs at the Mobile refinery were 64,000 b/d in the first quarter, down from 71,000 b/d in the same three months of 2023. Renewable throughputs were 4,000 b/d in the most recent quarter. The company expects 68,000-72,000 b/d of conventional crude and other feedstock throughputs in the second quarter and 2,000-4,000 b/d of renewable throughputs. Vertex reported a first quarter loss of $18mn compared to profits of $54mn in the first quarter of 2023. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore's GCMD to test long-term biofuel shipping use
Singapore's GCMD to test long-term biofuel shipping use
Singapore, 9 May (Argus) — Singapore-based Global Centre for Maritime Decarbonisation (GCMD) and Japanese shipping firm NYK Line will trial the continuous use of a biofuel blend over six months. The study aims to evaluate the effects of the continuous use of B24 biofuel blend of 24pc fatty acid methyl ester (Fame) and 76pc of very low sulphur fuel oil (VLSFO) on a short-sea vehicle carrier that will call at multiple ports, allowing for the regular sampling and testing of fuels stored on the ship. Fame is a "promising" fuel alternative, the firms said, but added that there are concerns about the impact of its extended use on vessel operations. The study hence aims to study the long-term impact of biofuel usage on ship engine performance and fuel delivery system operations. It will also examine the total cost of ownership of using biofuel, including fuel costs and associated maintenance costs, as well as identify potential operating challenges and suggest mitigation strategies. B24 is the current blend of alternative marine fuel that is being used or trialled for bunkering at some key Asian ports like Singapore and Zhoushan. Its usage is expected to rise, especially because the industry is pushing for higher emission cuts from shipping. Participants in the shipping industry are exploring solutions to meet the International Maritime Organization's (IMO) net zero carbon emission target by 2050, with operational safety and costs surfacing as some of the key concerns of alternative fuel adoption . "This knowledge will empower stakeholders across the ecosystem, from shipowners and charterers to biofuels producers and regulators – to make more informed business and policy decisions," GCMD chief executive officer Lynn Loo said. "Ultimately, this pilot will lead to greater confidence for biofuels use at scale, accelerating progress towards decarbonising the maritime industry." Argus assessed B24 biofuel bunker prices at $744.25-759.25/t delivered on board (dob) Singapore on 8 May. By Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more