The US Senate Subcommittee on Energy and Natural Resources held a hearing to examine the impacts of COVID-19 on the energy industry. The liquid terminal industry, and particularly terminal storage, has seen enormous impacts from the pandemic and has gone above and beyond to successfully manage these challenges.
ILTA submitted written testimony to the record. It said: “Terminal storage plays an essential role by greatly enhancing the flexibility of the supply chains for both petroleum and refined products and allowing all players along these supply chains to respond to market fluctuations.”
It said as of spring, several developments have caused a “perfect storm” that dramatically increased the demand for petroleum storage. First, gasoline demand fell precipitously due to lessened economic activity caused by COVID-19 stay-at-home orders. Second, foreign petroleum producers such as Russia and Saudi Arabia flooded markets with supply.
It said had it not been for these extraordinary events, which occurred nearly simultaneously, “the enormous storage capacity provided by our industry would almost certainly have been extensive enough to balance supply and demand and provide valuable flexibility to oil markets”.
The Environmental Protection Agency seems to acknowledge the difficulty faced by terminal operators, particularly during the COVID-19 pandemic, but ILTA said “its guidance to date has been sparse and has not provided adequate certainty for terminal operators”.
It said its goal in raising this issue, is “to draw attention to the need for transparent guidance from EPA to ensure that our members are not penalised for circumstances beyond their control – either during the COVID-19 pandemic or afterward when they will face a backlog in out-of-service inspection requirements. We need a plan that is fair and achievable, on a timeline that is agreed between members of our industry and their regulatory partners.”
For more information visit www.ilta.org