Posts Tagged ‘Sandy’

AAA research reveals need for regulators and industry to suspend E15 sales to protect motorists

ORLANDO, Fla. (Nov. 30, 2012) – A recent survey by AAA finds a strong likelihood of consumer confusion and the potential for voided warranties and vehicle damage as a result of the Environmental Protection Agency’s (EPA) recent approval of E15 gasoline. An overwhelming 95 percent of consumers surveyed have not heard of E15, a newly approved gasoline blend that contains up to 15 percent ethanol. With little consumer knowledge about E15 and less than five percent of cars on the road approved by automakers to use the fuel, AAA is urging regulators and the industry to stop the sale of E15 until motorists are better protected.

Additional Resources

Only about 12 million out of the more than 240 million light-duty vehicles on the roads today are approved by manufacturers to use E15 gasoline, based on a survey conducted by AAA of auto manufacturers. AAA automotive engineering experts also have reviewed the available research and believe that sustained use of E15 in both newer and older vehicles could result in significant problems such as accelerated engine wear and failure, fuel-system damage and false “check engine” lights for any vehicle not approved by its manufacturer to use E15.

“It is clear that millions of Americans are unfamiliar with E15, which means there is a strong possibility that many motorists may improperly fill up using this gasoline and damage their vehicle,” said AAA President & CEO Robert Darbelnet. “Bringing E15 to the market without adequate safeguards does not responsibly meet the needs of consumers.”

Unsuspecting consumers using E15 could end up with engine problems that might not be covered by their vehicles’ warranties. Five manufacturers (BMW, Chrysler, Nissan, Toyota and Volkswagen) are on record saying their warranties will not cover fuel-related claims caused by the use of E15. Eight additional automakers (GM, Ford, Honda, Hyundai, Kia, Mazda, Mercedes-Benz and Volvo) have stated that the use of E15 does not comply with the fuel requirements specified in their owner’s manuals and may void warranty coverage.

The only vehicles currently approved by automakers to use E15 are flex-fuel models, 2001 model-year and newer Porsches, 2012 model-year and newer GM vehicles and 2013 model-year Ford vehicles. These approvals extend only to cars, light-duty trucks and medium-duty passenger vehicles (SUVs). The use of E15 is expressly prohibited in heavy-duty vehicles, boats, motorcycles, power equipment, lawn mowers and off-road vehicles.

“The sale and use of E15 should be suspended until additional gas pump labeling and consumer education efforts are implemented to mitigate problems for motorists and their vehicles,” continued Darbelnet. “Consumers should carefully read pump labels and know their auto manufacturer’s recommendations to help prevent any problems from E15.”

AAA urges fuel producers and regulators to do a better job of educating consumers about potential dangers before selling E15 gasoline. This outreach should include a consumer education campaign and more effective pump labels, among other potential safeguards to protect consumers and their vehicles. AAA also recommends additional testing to conclusively determine the impact of E15 use on vehicle engines and fuel system components. At least  ten gas stations currently sell E15 and that number is expected to grow, which means now is the time to suspend sales before more retailers begin offering the fuel.

The EPA in June officially approved the sale of E15 after receiving a waiver request from producers interested in expanding the use of corn-based ethanol. Despite objections by auto manufacturers, the EPA approved the use of E15 gasoline in flex-fuel vehicles and 2001 model year and newer cars, light-duty trucks and medium-duty passenger vehicles and SUVs. AAA urges consumers to follow the recommendations of manufacturers to truly protect themselves from voided warranties or potential damage.

AAA supports the development and use of alternative fuels. More than 95 percent of the gasoline sold in the United States contains up to 10 percent ethanol. Lower ethanol blends should remain available to consumers while the challenges with E15 are addressed.

The survey findings related to consumer knowledge of E15 are from a telephone survey conducted among a national probability sample of 1,012 adults comprising 504 men and 508 women 18 years of age and older, living in private households in the continental United States.

As North America’s largest motoring and leisure travel organization, AAA provides more than 53 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited on the Internet at AAA.com.

(WASHINGTON, November 26, 2012) Today’s national average price for a gallon of regular unleaded gasoline is $3.42.  This price is 13 cents less expensive than one month ago, but it is fractions of a penny more expensive than one week ago and 12 cents more expensive that one year ago.  Today’s price is the highest on record for this calendar day and continues the streak of daily record prices that began on August 20.  The price at the pump this Thanksgiving was the highest ever for the holiday — 11 cents higher than the previous record set last year.

Over the last week, prices in 27 states have declined, led by Alaska (-10 cents per gallon), Utah (-6.8 cents) and Idaho (-6.2 cents), while motorists in Kentucky (+10.2 cents), Ohio (+7.1 cents) and Indiana (+6.5 cents) have seen the greatest price increases.  Drivers in Missouri currently pay the least for a gallon of gasoline at $3.14.  Drivers in Hawaii currently pay the most, at $4.07, and it remains the only state with an average price higher than $4 per gallon.

The national average price at the pump peaked this summer at $3.87 on September 14, the day before much of the U.S. began the transition to winter-blend gasoline.  Since that day, gas prices have fallen steadily (60 of 73 days) and are now 45 cents below the recent peak.  This decline was the product of the changeover to winter-blend fuel, which is less expensive to produce; cheaper crude oil prices; lower demand; and economic concerns.   Prices fell nearly nine cents during the second half of September and dropped more than 26 cents in October.  However, the national average has declined less than a dime to-date in November.  The reasons for this slowing decline are regional disruptions to distribution in the aftermath of Hurricane Sandy, higher crude oil prices, and bullish U.S. economic news.

Following the Hurricane, electrical outages and infrastructure damage disrupted regional distribution networks.  While these issues were slowly resolved, prices in impacted areas were pressured temporarily higher, offsetting falling prices in other regions.  Prices in affected areas have returned lower recently, however the decline in the national retail price of gasoline has now been impacted by rising crude oil prices.  Oil prices rose as high as $99 per barrel in September, before falling to less than $85 earlier this month.  From that low, crude prices increased to more than $89 per barrel to begin last week, and these prices continue to put upward pressure on retail gas prices.  Additionally, recent bullish economic news, including some positive signals in Washington, D.C. regarding efforts to address the looming U.S. “fiscal cliff,” have seen commodities prices, including gasoline, move higher.  A stronger economy would be expected to demand more gasoline, which puts upward pressure on prices.

At the close of today’s formal trading on the NYMEX, West Texas Intermediate (WTI) crude oil was down 54 cents on the day to settle at $87.74 per barrel.

(WASHINGTON, November 19, 2012) Today’s national average price for a gallon of regular unleaded gasoline is $3.42.  This price is two cents less expensive than one week ago and 28 cents less expensive than one month ago, however it is still five cents more expensive that one year ago and the highest price on record for this calendar day.  Today’s price continues the streak of daily record prices that began on August 20.

To begin last week, motorists in some of the areas hit hardest by Hurricane Sandy still faced long lines at the pump due to lingering regional fuel distribution issues in the aftermath of the storm.  In response to these lines, northern New Jersey, New York City and Long Island each imposed odd-even gasoline rationing policies.  As distribution has returned to normal and lines have dwindled, New Jersey ended rationing rules last Tuesday, after ten days, and Long Island lifted the restriction last Friday at midnight, after eight days.  Rationing in New York City was scheduled to end today but has been extended through Friday citing the Thanksgiving travel week.

Both long lines at the pump and gasoline rationing policies have drawn comparisons to those seen in the 1970s.  The circumstances, however, are very different.  While the recent situation was due to a temporary and regional disruption to distribution, the situation in the 1970s was due to a prolonged and nationwide supply shortage.

While pump prices in New York and New Jersey did increase following the hurricane, prices have just as quickly returned lower as power and distribution issues have been resolved.  Prices in Long Island are 16 cents lower than one week ago, prices in New York City are 11 cents lower and prices in New Jersey are eight cents lower.

Nationally, the retail price of gas has been falling steadily since mid-September.  Motorists in every state are paying less at the pump than they were one month ago, with the sole exception being drivers in Ohio. Consumers in the Buckeye State are paying one-tenth of a penny more than a month ago but still 36 cents less than in September.  Motorists in Hawaii ($4.11) and Alaska ($3.97) pay the most for a gallon of gasoline, while those in Missouri ($3.08) and South Carolina ($3.12) pay the least.

AAA expects that gas prices across the country will continue to decline approaching the end of the year, barring any major market moving news, as lower demand, cheaper winter-blend gasoline and economic concerns continue to pressure pump prices lower.

Two such potential market moving news items have been front and center over the last week: escalating violence between Israel and Palestine and the looming U.S. “fiscal cliff.”  While neither Israel nor Palestine is a major oil producer, increased geopolitical uncertainty in the Middle East puts upward pressure on prices, as do signs in Washington of progress working to address economic concerns.  Oil prices last week remained flat, however developments with both stories prompted bullish market sentiment and sent prices sharply higher today.  At the close of today’s formal trading on the NYMEX, West Texas Intermediate (WTI) crude oil was up $2.36 on the day to settle at $89.28 per barrel — the highest settlement price since this day last month.

(WASHINGTON, November 12, 2012) Today’s national average price for a gallon of regular unleaded gasoline is $3.44.  This price is three cents less expensive than one week ago and 36 cents less expensive than one month ago. For nearly three months the national average has been the highest on record each calendar day, however that gap has almost disappeared.  One month ago the national average exceeded the previous record for that day, also set in 2011, by more than 30 cents. Today it is less than a penny and may fall below last year’s price before the end of the week.

The national average reached a recent peak of $3.87 per gallon on September 14, the day before the many parts of the country made the seasonal switch from summer- to winter-blend gasoline. Since that peak, the price has fallen 43 cents, including 31 of the past 32 days as lower crude oil prices, reduced demand, and economic growth concerns have pressured pump prices lower.  Every state and Washington, D.C. has a price today that is lower than mid-September, and in many cases the price is much lower.  However, nine states (Ill., Ind., Kent., Mich., Minn., New Jersey, New York, Ohio, and Wisc.) have seen prices rise in the last week.

In the immediate aftermath of Hurricane Sandy, power outages in New York and New Jersey left many stations unable to operate pumps, despite gasoline in their storage tanks.  Long lines developed quickly in many areas with only a limited number of open stations. Even as power was restored to some stations, others with electricity ran out of fuel to sell because of distribution issues from closed petroleum terminals and infrastructure damage.  While stations have continued to reopen as electricity has been restored to many impacted regions, long lines have persisted as distribution and resupply issues are slowly resolved.

On Nov. 2, AAA estimated that 45-50 percent of stations in New Jersey and 40-45 percent of stations in New York City were in operation – meaning they had conducted at least one fuel transaction that day.  As of today, AAA estimates this number has improved to 70-75 percent of stations in New York City and 80-85 percent in New Jersey.

Looking up the supply chain, to the closed terminals that are currently the primary factor in distribution issues, on November 1 the Department of Energy reported that 13 of 57 terminals in the path of the storm were closed, as of today the Agency reports that seven remain shut.  The issues in restoring these terminals to normal operation is the primary reason motorists have continued to experience lines at gas stations in some areas, and has led to continued gasoline rationing in New York City and Long Island. New Jersey announced today that it is ending gasoline rationing beginning at 6:00 AM tomorrow morning.

This continues to be a distribution problem and not a systemic issue with gasoline supplies.  As petroleum terminals return to service, there is plenty of gasoline ready to make its way to stations.  Once this is able to happen, AAA expects pump prices in affected areas to follow the rest of the country lower. AAA predicts that the national average price will be $3.25-3.40 by Thanksgiving and $3.10-3.30 by the end of the year.

Lower crude oil prices have added to the recent downward pressure on retail gasoline prices.  With continued signs of global economic weakness and a somewhat stronger U.S. dollar, West Texas Intermediate (WTI) crude oil prices have continued to move lower.  At the close of today’s formal trading on the NYMEX, WTI crude oil was down 50 cents on the day to settle at $85.57 per barrel.

(WASHINGTON, November 5, 2012) Today’s national average price for a gallon of regular unleaded gasoline is $3.47 — the lowest price in more than 100 days.  This price is 17 cents less expensive than one week ago and 34 cents less expensive than one month ago. The national average has been the highest on record each calendar day since late August; however the gap between this year’s price and the previous record has nearly closed.  Three weeks ago the national average exceeded the previous record for that day, also set in 2011, by more than 30 cents. Today it is only a nickel.  The national average price at the pump has now fallen for 24 consecutive days, the longest streak since prices earlier this year dropped 26 days in a row from May 15 through June 11.

The only lines longer than those expected at polling locations for tomorrow’s presidential election may be those seen during the last week at some gas stations in New York and New Jersey.  Power outages and distribution issues in the wake of Hurricane Sandy left some delivery terminals and service stations — particularly in Northern New Jersey and New York City — without electricity and thus unable to deliver gasoline to stations and consumers.  It is important for motorists to realize that this continues to be an issue of electrical supply rather than a gasoline shortage.  Once power is restored, there is more than adequate gasoline supply ready to be delivered to consumers.

The U.S. Department of Energy reported this morning that 11 of the 57 terminals affected by Hurricane Sandy remain closed.  On Friday, AAA estimated the number of stations operating in both New Jersey and New York City at 45-50% and Long Island at 35-40%.  As of this afternoon, AAA estimates that each of these numbers has improved: New Jersey – 55-60%, New York City – 60-65%, and Long Island – 50-55%.

The result of this truncated delivery system has been the sometimes long lines at those stations with power to run pumps and sell gasoline.  As power is restored in the coming days, these lines and distribution issues are expected to continue to diminish, and prices will be expected to move lower.

Since last Monday, the price at the pump has increased by three cents in New York and nearly seven cents in New Jersey.  During the same period, prices have fallen in every other state and Washington, D.C., led by declines on the West Coast: Calif. -18.5 cents, Wash. -13.6 cents, and Ore. -13 cents.  The price in every state, including New York and New Jersey, is lower today than it was one month ago.  During that time, the price has fallen by more than 40 cents in 11 states and by more than a quarter in 32 total states.

While prices in some storm affected areas have increased temporarily, ultimately the price impact of Hurricane Sandy will be due to demand destruction rather than supply destruction and pump prices will continue to decline.  When demand numbers are announced later this week, AAA expects that, in the days following the storm, American’s will have consumed one to two million barrels per day less of gasoline than in the days prior to the hurricane. This demand destruction will add to the recent downward pressure on gasoline prices from already low demand, continued economic concerns, and the switch to less expensive, winter-blend gasoline. AAA continues to predict that the national average will be $3.25-3.40 by Thanksgiving and $3.10-3.30 by the end of the year.

Lower crude oil prices have added to the recent doward pressure on retail gasoline prices.  With continued signs of global economic weakness and a somewhat stronger U.S. dollar, West Texas Intermediate (WTI) crude oil prices ended last week below $85 per barrel for the first time since July 10.  At the close of today’s formal trading on the NYMEX, WTI crude oil had risen back above this threshhold, settling down 79 cents on the day at $85.65 per barrel.

Podcasts

B-Roll

YouTube Videos

AAA Senior Driver Expos

NewsRoom Video Gallery

Media: Find and Download AAA Videos and B Roll.