Overnight Energy & Environment — Analysts predict rising gas prices

by Rachel Frazin and Zack Budryk - 12/28/21 6:35 PM ET

Welcome to Tuesday’s Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. Subscribe here: digital-stage.thehill.com/newsletter-signup.

Today we’re looking at a potential rise in gas prices this spring, new EPA requirements to report a carcinogenic gas, and the latest following a Navy fuel leak near a drinking water source in Hawaii.

For The Hill, we’re Rachel Frazin and Zack Budryk. Write to us with tips: rfrazin@digital-stage.thehill.com and zbudryk@digital-stage.thehill.com. Follow us on Twitter: @RachelFrazin and @BudrykZack.

Let’s jump in.

Gas prices could go up this spring

Analysts expect U.S. gasoline prices to rise in 2020, saying they could reach around $4 per gallon in late spring, presenting a major political problem for President Biden.

Tom Kloza, global head of energy analysis at the Oil Price Information Service, told The Hill that there’s a “good chance” prices will be “close” to 2008 highs, when prices were above $4 per gallon.

“Notwithstanding another variant…we’re going to see excessively high prices in 2022,” said Kloza. “It’s going to run up, I’d say, between Presidents’ Day and Cinco de Mayo.”

He attributed the potential increase to reduced refining capacity leading to less gasoline supply.

Meanwhile, Patrick De Haan, head of petroleum analysis at fuel price app GasBuddy, predicted a similar rise, telling CNN that it’s possible the country’s average price “flirts with, or in a worst-case scenario, potentially exceeds $4 a gallon.”

The news outlet also obtained an analysis from GasBuddy that predicted prices will peak at $3.79 in May, but eventually fall below their current level.

But, the U.S. government says otherwise…The Energy Information Administration, an Energy Department statistics agency, predicts that gasoline prices next year will remain relatively low.

The agency’s latest short term energy outlook, which was published on Dec. 7, predicted that U.S. prices will average $2.94 in next year’s first quarter, $2.95 in Q2, $2.89 in Q3 and $2.74 in Q4.

Agency spokesperson Chris Higginbotham told The Hill in an email that it expects an increase in crude oil production next year, and that this will lower gasoline prices. He also said that the omicron variant could lead to a decline in demand.

But he also noted that the new variant caused uncertainty in the projection.

And there’s always politics. A price rise could be politically troubling for Democrats, as Republicans have repeatedly used gas prices to criticize them, even though presidential power over gasoline prices is limited.

EPA to require reports of carcinogen releases

A flag of the Environmental Protection Agency is seen outside their headquarters in Washington, D.C., on June 3

The Environmental Protection Agency (EPA) announced Monday that it will require more facilities to report the release of a carcinogenic gas called ethylene oxide (EtO), after previously not requiring them to do so.

The agency said in a statement Monday that it believes the 29 facilities facing the new requirement are “likely to exceed” the emissions reporting threshold of 10,000 pounds per year of EtO.

It argued that the move will help communities deal with the substance, which is mainly used to make other chemicals and for sterilization.

“For too long, many communities in this country, particularly those with environmental justice concerns, have been at risk of exposure to EtO without even knowing it,” said Assistant Administrator for the Office of Chemical Safety and Pollution Prevention Michal Freedhoff in a statement.

“This will help inform EPA’s future actions and empower communities to act at the local level,” Freedhoff said. According to the agency, there’s evidence that ethylene oxide exposure increases risks of white blood cell cancers and breast cancer.

Official calls out Navy fuel storage facility

A Hawaii official says that the Navy’s Red Hill underground fuel storage facility is a “ticking time bomb” as both sides grapple with the fallout of a leak that contaminated an important source of drinking water.

David Day, who has been overseeing hearings regarding operations at Red Hill, made the comment in a proposed order upholding a previous state mandate to defuel the facility, among other demands.

“The weight of the evidence establishes that the Red Hill Facility, as currently situated, is a metaphorical ticking time bomb located 100 feet above the most important aquifer on Hawaii’s most populous island,” Day wrote.

The Navy has until Wednesday to file any exceptions to the proposed order. A Navy spokesman told The Hill that it is aware of the proposed decision but had no further statement.

Some background info: The Red Hill facility, which was constructed during World War II, is an underground storage system in Oahu, about 2.5 miles northeast of Pearl Harbor. The facility sits directly above a groundwater aquifer, which is the principal source of drinking water for the island.

In late November, the Navy reported a release of about 14,000 gallons of a mixture of fuel and water at the Red Hill facility, which caused fuel contamination of one of the military’s drinking water sources.

Read more about the situation here.

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ICYMI