White House Directs Refineries to Postpone Maintenance, Forget ULSD
8 September 2005
The Financial Times reports in its 8 Sep edition that the White House has told US refiners to postpone all scheduled maintenance in a drive to maximize gasoline and diesel production.
The instructions come in the wake of the latest DOE forecast of an average price for oil of around $70 per barrel in September ($67 in the event of a very fast recovery from Katrina; more than $72 in the case of a slow recovery).
Washington has also told refiners to stop producing ultra low-sulfur diesel to increase gasoline output, according to the report.
A senior executive from a big refinery in Houston said: “The message from the government is: ‘run the refinery as high as you can and avoid all the non-priority maintenance in the next four or six weeks’.”
A Louisiana refiner said: “The White House said: ‘Forget about (ultra) low-sulphur diesel. We need gasoline and diesel. We need you working 100 per cent’.”
New regulations on producing ultra-clean diesel were due in January but are now likely to be postponed, refiners said.
Postponing maintenance is a dangerous game—especially when running at full capacity—that can lead to serious accidents. Reducing fuel quality standards may make sense in a very short term emergency, but in the long-term would have negative impacts not only on public health, but also on the engines and exhaust systems that are being (expensively) developed anticipating the availability of clean fuel.
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