Speculation Surrounds Fate of Reformulated Gasoline Program as EPA Denies Wisconsin's Opt-out Request

Strategic Insights -

The fate of the reformulated gasoline (RFG) program continues to be a topic of speculation, with the Environmental Protection Agency (EPA) denying reports that it had refused to allow Wisconsin to opt out of the program. Industry sources have expressed concern that if Wisconsin is allowed to suspend the program, other cities may try to follow suit. Meanwhile, a related lawsuit has resulted in federal appeals court judges questioning EPA's renewable energy content standard for RFG, potentially supporting the petroleum industry. In the energy market, crude contracts have firmed, while gasoline and heating oil prices have experienced mixed trading.

Key Takeaways:

  • The EPA has denied reports that it had refused to allow Wisconsin to opt out of the RFG program, with no official decision announced as of late Thursday.
  • Industry sources have expressed concern that if Wisconsin is allowed to suspend the program, other cities may try to follow suit.
  • The American Petroleum Institute and the National Petroleum Refiners Association are suing the EPA over its renewable energy content standard for RFG, with federal appeals court judges questioning the standard.
  • Crude contracts have firmed, while gasoline and heating oil prices have experienced mixed trading.
  • Three federal appeals court judges questioned EPA's renewable energy content standard for RFG in an ongoing lawsuit.
  • Analysts forecast that price resistance for the heating oil contract will remain firm due to bearish technical indicators.

Statistics:

  • The March gasoline contract reached a daily high of 58cts. before settling at 57.91cts., up 1.69cts.
  • The March crude contract settled at $18.59/bbl, up 17cts.
  • Natural gas contracts rose 1.3cts. to $1.399/MMBtu in light trading.
  • Heating oil prices settled at 46.92cts., up 0.03cts./gallon.
  • The contract for the March oil contract is set to expire next Tuesday.

Sources:

  • Environmental Protection Agency (EPA)
  • Martha E. Casey, EPA Spokeswoman
  • American Petroleum Institute
  • National Petroleum Refiners Association
  • New York-based analyst
  • Energy Information Administration