The worldwide decline in fuel demand has hurt energy-producing states such as Oklahoma.
The worldwide decline in fuel demand has hurt energy-producing states such as Oklahoma.
Oklahoma Gov. Kevin Stitt on April 16 signed a letter with three other governors (Greg Abbott of Texas, Gary Herbert of Utah and Mark Gordon of Wyoming) to request that EPA Administrator Andrew Wheeler expedite a waiver of renewable volume obligations under the federal renewable fuel standard (RFS).
The governors say the COVID-19 crisis is a material threat to the refining sector, which would constitute a severe economic harm to particular states, regions, and the nation as a whole. The letter notes that the refining and petrochemical industries contribute $660 billion annually to the national economy and employs millions of workers in 33 states.
The severe decline in demand for fuel used for transportation and air travel has caused problems.
“The macroeconomic impacts of COVID-19 have resulted in suppressed international demand for refined products, like motor fuels and diesel," Stitt wrote. "The International Energy Agency (IEA) has cut its 2020 growth forecast for global oil demand, predicting the first quarterly contraction in more than 10 years. The IEA has also revised down the outlook for global refinery runs
“As the world economy responds to measures adopted to contain COVID-19, demand for refined products for air transportation, global delivery of goods, and petrochemicals decline – and any rebound of necessity will occur only after containment restores predictable economic growth. In the interim the U.S. refining sector will face real and substantial difficulty.”
The current renewable volume obligations of the RFS made assumptions that no longer hold. The governors believe that as the country deals with this crisis continuing to implement the current RVO imposes an added obligation that would severely harm the sector, as well as the economy of the states and the U.S. as a whole.
“Not only is EPA bound to act on this waiver request, it must do so immediately if it is to avoid the precise severe economic harm this waiver provision is designed to address,” the four governors wrote.
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