Gasoline Detergent Additive Shortage Compounded by Lubrizol Shutdown
On August 30, BASF Corporation., one of the world’s largest chemical producers, sent letters to its oil and gas customers in North America declaring force majeure on the sale of Gasoline Performance Packages (GPP) sold under the Keropur® brand name. The notice was a consequence of BASF’s supplier suffering a shortage of raw materials and additional unforeseen production issues, thereby causing a significant reduction in supply to BASF.
Gasoline detergent additives are required to be mixed with gasoline and diesel motor fuel by the Environmental Protection Agency and 40 CFR 80, Subpart G. When the issue first arose, BASF’s production was expected to be running again by the end of January, with another 3-6 months needed to restore the full supply chain. Because BASF controls around 40% of the market share of detergent additives, the halt in sales and drastic reduction of supply in the market presented a logistical and regulatory challenge for ILTA members in the coming months.
By mid-November, the terminals industry was seemingly maneuvering to accommodate the shortage by passing around blending duties to other facilities and companies. A new challenge emerged, though, as Lubrizol, another major chemical producer responsible for about 1/3 of the global supply of detergent, sent notice that the company would be temporarily shutting down its Ohio-based plant that produces most of its detergent supply. The company’s facility allegedly failed a safety audit, forcing the organization to review urgent issues as soon as possible and halt all production. As it stands, Lubrizol expects to reopen the plant by Christmas with production to begin again by mid-January.
To that end, ILTA has been in continued discussions with EPA and the National Association of Truck Stop Owners on a viable solution. From ILTA’s most recent, early December discussion with EPA, Lubrizol is confident that it can accommodate industry demand for detergent and have its production fully restored before a major market shortage occurs. ILTA will notify membership on developments as we learn more.