Gas prices jump as Isaac bears down

The Environmental Protection Agency said Wednesday that it is providing Louisiana a temporary emergency waiver of certain “clean” gasoline requirements.

“This waiver will allow greater flexibility for the fuel distribution system to support an adequate supply,” EPA said.

Analysts this week told E2-Wire that they expect gas price increases in the range of 5 to 15 cents as a result of the storm.

Isaac has brought Gulf of Mexico oil production to a near-standstill as companies have suspended operations and cleared workers off platforms.

The Interior Department said Tuesday afternoon that 93 percent of Gulf oil production has been shut in, totaling nearly 1.3 million barrels per day of output. The Gulf accounts for almost a fourth of U.S. crude oil production.

The White House has not ruled out releasing oil from the Strategic Petroleum Reserve.

The storm, which made landfall Tuesday as a Category 1 hurricane, has curtailed operations at some Gulf Coast refineries.

The Energy Department (DOE) reported Tuesday that five refineries in Isaac’s path were shutting down, representing 936,500 barrels per day, or 12 percent of total Gulf Coast refining capacity.

Three other facilities are operating at reduced rates, DOE said, citing information received as of 1:30 p.m. Tuesday.

The EPA waiver, sought by Louisiana Gov. Bobby Jindal (R), will be in effect for 10 days and applies to 14 parishes in Louisiana. EPA said it determined that "extreme and unusual supply circumstances exist" that will likely result in a shortage of gasoline that complies with federal rules.

"The federal waiver will help ensure an adequate supply of gasoline in Louisiana until normal supply to the region can be restored," EPA said.

The gas price spike arrives at a time when Republicans are continuing to criticize Obama’s energy and environmental policies, even though policymakers have few tools to influence gasoline prices.

Several speakers took aim at Obama at the first day of Republican convention speeches in Tampa.

Virginia Gov. Bob McDonnell (R) said that under Obama, the Environmental Protection Agency has become the “employment prevention agency.” 

Obama, for his part, defended his energy record in campaign stops in Colorado and Iowa Tuesday, touting new auto fuel economy rules.

“In just four years, we have doubled the generation of clean, renewable energy like wind and solar,” Obama told students at Colorado State University.

“We developed new fuel standards for our cars so that cars are going to get 55 miles a gallon next decade. That will save you money at the pump. It will reduce greenhouse gas emissions by a level roughly equivalent to a year’s worth of carbon emissions from all the cars in the world put together,” he said, according to a White House transcript.

He said Republicans are offering an energy plan “written by and for big oil companies.”