September 12, 2018 / 9:48 PM / a month ago

Colonial will not change fuel specs ahead of Hurricane Florence

NEW YORK (Reuters) - A major pipeline operator that sends gasoline to the U.S. Southeast said on Wednesday it does not expect to take full advantage of a government waiver aimed at ensuring adequate fuel supplies to the region.

On Tuesday, the U.S. Environmental Protection Agency (EPA) waived federal regulations requiring the use of low-volatility conventional gasoline for fuel sold in areas of North and South Carolina in anticipation of potential fuel shortages. The waiver would allow suppliers to ship off-season fuels if available.

But Colonial Pipeline said in a notice that shippers will not be able to deliver off-season CBOB fuel authorized by the waiver. The pipeline is moving summer-grade CBOB gasoline, and off-season fall or winter barrels of the fuel would not get to areas affected by Hurricane Florence before the Sept. 15 waiver expires, it said.

Hurricane Florence, the strongest storm to hit the region in decades, is expected to strike the coast of North Carolina late Thursday or early Friday.

Gasoline requirements shift seasonally to meet environmental standards, and the waiver effectively allows the sale of winter- and summer-grade fuel.

The EPA waiver also allows for the blending of reformulated gasolines with other blendstocks or oxygenates. The waiver of the prohibition is effective through Oct. 1.

Colonial, which sends fuel from the Gulf Coast to the Northeast, was operating normally on Wednesday and preparing for potential flooding and loss of power due to Hurricane Florence, the operator said in a notice to shippers.

Colonial has generators on standby to be delivered in the event of a power loss along the line.

If the storm affects remote sections of the pipeline, there would be likely no impacts to gasoline and products supply in the Northeast, said Patrick DeHaan, head of petroleum analysis at tracking firm GasBuddy.

DeHaan added he did not expect widespread gasoline shortages due to the storm.

Reporting by Stephanie Kelly; Editing by Phil Berlowitz

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