
Floods Choking Everything From Oil to Wheat in U.S. Midwest
By Barbara Powell and Tim Loh
(Bloomberg) — The worst flooding throughout the U.S. Midwest in 4 years is disrupting all the things from oil to agriculture, forcing pipelines, terminals and grain elevators to shut and killing off 1000’s of pigs.
Fifty miles (80 kilometers) of the Illinois River have been closed, based on the U.S. Coast Guard, in addition to 81 miles of the Mississippi River in two segments.
The flooding is the worst since May 2011, when rising water on the Mississippi and its tributaries deluged cities, slowed barge visitors and threatened refinery and chemical operations. The present state of affairs will increase stockpiles of crude oil and should lengthen this 12 months’s worth slide.
Hog producers in southern Illinois are calling different farmers, hoping to seek out further barn house to relocate their pigs, stated Jennifer Tirey, government director of the Illinois Pork Producers Association. Processors are sending further vehicles out to retrieve market-ready pigs, she stated. In one case, an overflowing creek took out electrical energy and made roads impassable, inflicting 2,000 pigs to drown.
‘So Much Rain’
“There was no way to get the pigs out,” Tirey stated. “Honestly, it was just an act of God. That creek had so much rain.”
So far, the largest oil shutdown includes Enbridge Inc.’s Ozark pipeline, which was booked to hold about 200,000 barrels a day this month to Wood River, Illinois, from Cushing, Oklahoma. The outage of the part beneath the Mississippi River might additional add to stockpiles at Cushing that reached a file excessive final week.
“The closure of the Ozark pipeline will just add to the stocks at Cushing,” stated Amrita Sen, chief oil economist at Energy Aspects Ltd. in London.
Spectra Energy Corp. shut the 145,000 barrel-a-day Platte oil pipeline between Guernsey, Wyoming, and Wood River as a precaution due to the river’s situation, the corporate stated in an e-mailed assertion.
St. Louis obtained 5.91 inches of rain (15 centimeters) from Dec. 26 to Dec. 28, based on AccuWeather information. By Wednesday, Ameren Missouri was ferrying staff to and from its Sioux Energy Center north of St. Louis. The coal-fired energy plant remains to be operational and employees will proceed to journey by boat till the floodwaters recede, the corporate stated in an announcement.
Closed Terminals
Kinder Morgan Inc. shut its Cahokia terminal in Sauget, Illinois, and its Cora terminal in Rockwood, Illinois, firm spokesman Richard Wheatley stated by e-mail. Cahokia handles chemical compounds, coal, cement and metals whereas Cora handles coal and petcoke, based on the corporate’s web site. Kinder Morgan declared a power majeure, which protects it from legal responsibility for contracts that go unfulfilled for causes past its management.
Exxon Mobil Corp. is shutting a gasoline terminal on the Mississippi River at Memphis “in anticipation of severe weather,” spokesman Todd Spitler stated in an e-mail Wednesday.
Barge operators transport grain took benefit of early forecasts for the heavy rain and flooding to move masses earlier than Christmas to ports in New Orleans, the place there’s “adequate inventory,” stated Wes Traina, logistics supervisor for Zen-Noh Grain Corp. in Convent, Louisiana. Still, excessive water might proceed to gradual transport and loading all through January, he added.
‘Fast Currents’
“The biggest concern from the high waters and fast currents will be from barges hitting a bridge and breaking apart,” Traina stated by cellphone. “It’s inevitable that accidents will occur.”
The southern Illinois co-op Gateway FS Inc. has closed three of its grain elevators. Employees are working prolonged hours to accommodate the big variety of farmers hauling in grain from on-farm bins that might be compromised by flooding, stated normal supervisor Carl Tebbe.
“We’re just hopeful the water doesn’t quite get as high as what they’re saying,” Tebbe stated. “Everyone has done a lot of work.”
Delek U.S. Holdings Inc., which has a merchandise terminal in Memphis, declined to remark, based on spokesman Matt Barkett. Steve Lee, a spokesman for Valero Energy Corp., which has a 180,000 barrel-a-day refinery in Memphis that lowered operations through the 2011 floods, stated he was unable to reply instantly about plans to cope with the present flooding risk.
The floodwaters might finally attain Louisiana, which has 10 refineries within the Baton Rouge-New Orleans space with an mixed capability of about 2.5 million barrels, or 13 p.c of the nation’s capability, stated Andy Lipow, president of Lipow Oil Associates in Houston.
“They could see the effects there in several weeks,” Lipow stated. “Sometimes, a refinery isn’t flooded, but the ability to move product out or move crude in is impacted and you can’t leave workers in a flood situation.”
–With help from Brian Ok. Sullivan, Sheela Tobben, Mark Shenk, Lydia Mulvany and Jeff Wilson.
©2015 Bloomberg News