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The U.S., particularly the Southeastern part of the country, will very soon have a major diesel fuel shortage on its hands.
In many areas, actual fuel prices are currently 30-80 cents higher than the posted market average, because supply is tight. Usually the “low rack” posters can sell many loads of fuel before running out of supply; now, they only have one or two loads. That means fuel suppliers have to pull from higher cost options, at a time when low-high spreads are much wider than normal. At times, carriers are having to visit multiple terminals to find supply, which delays deliveries and strains local trucking capacity.
Because conditions are rapidly devolving and market economics are changing significantly each day, Mansfield is moving to Alert Level 4 to address market volatility. Mansfield is also moving the Southeast to Code Red, requesting 72 hour notice for deliveries when possible to ensure fuel and freight can be secured at economical levels.
Read that last paragraph again. Mansfield is not a company to just sound an alarm for news clicks. No, this looming diesel shortage is very real. As in this news from Bloomberg via PJ Media:
The US has just 25 days of diesel supply, the lowest since 2008, according to the Energy Information Administration. At the same time, the four-week rolling average of distillates supplied, a proxy for demand, rose to its highest seasonal level since 2007.
That was on October 14th.
Taking from @JavierBlas: “US has just 106 million barrels of diesel stockpiles. Last time inventories were that low in mid-October was in 1951. Inventories should be 30% higher this time of the year.” Fed have another wave of energy-led inflation coming? https://t.co/HURQmUg2oH pic.twitter.com/vKMmCheowA
— Valerie Tytel (@ValerieTytel) October 19, 2022
What has the Biden Administration done to alleviate this issue? What, if anything has Pete Buttigieg done to stave off this crisis? Not one damned thing that I could find.
I still haven't heard any response about the Diesel Fuel Shortage?
— Teri (@TeriOwen82) October 28, 2022
Isn't anyone concerned.
Are we just going to wait until the trucks and trains stop rolling?
Why is this looming diesel shortage a VERY BIG DEAL? Let me count the ways.
Trains run on diesel. Trains move a significant amount of product around the country. If the trains can’t run because of shortages, or possibly won’t later this month if the railroads DO strike, I shudder to think what will happen.
Oh, but let’s just transport everything via trucks! Except that semi trucks run on…you guessed it… DIESEL. Want your grocery stores supplied in a consistent manner, or your mail to arrive on time? Those semis need diesel fuel in order to make deliveries.
Want wheat for bread, corn for cornmeal and other by products? It’s harvest season right now. A significant amount of farm equipment ALSO runs on diesel fuel. No diesel, no crops harvested. Having grown up on a ranch, I can tell you that a significant amount of ranch/farm operations would come to a screeching halt if there’s no fuel available.
The Diesel Fuel Shortage?
— Convenience Store News. (@CStoreNews_) October 31, 2022
Isn't anyone concerned.
Are we just going to wait until the trucks and trains and tractors stop rolling? #PetrolDieselPrice #Diesel pic.twitter.com/0jVI1AG3SS
Here’s another issue. Many many homes in the northeast use heating fuel to heat their homes. The shortages are already seriously impacting both prices (which are nearly $3 higher than one year ago) and ability to get fuel. Rationing is already happening in several states. Not only that, but Democrats in Connecticut decided it was a grand idea to add an additional tax on the fuel delivery trucks.
https://twitter.com/MikeGrant262/status/1583061524347691008?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1583061524347691008%7Ctwgr%5E23ac96947cbb6235d7b414b913682139906f597e%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fredstate.com%2Fbobhoge%2F2022%2F10%2F25%2Fit-begins-new-york-new-england-begin-rationing-heating-oil-before-peak-winter-has-even-hit-n648816
Some in the media are placing the blame solely on the issue of Russian imports getting shut down. Yet, that’s not the real answer as to why there’s a critical diesel shortage right now. Newsweek kind of gives it away here.
For the past two years, amid pandemic closures and climate pledges promising to invest more in renewable, green energies, refineries in the U.S. have significantly reduced their capacity—leading to less diesel produced in the country.
The Green Energy people have been working for years to get refineries to shut down. And many are no longer in operation. Which adds to the issue of being able to ramp up production. It’s difficult to do when refineries have been permanently shuttered because of climate change/green energy science crap.
Our country functions on a significant amount of diesel fuel. If that comes to a halt due to shortages, it won’t be pretty. Furthermore, this isn’t just a U.S. issue, it’s a global issue.
While I don’t want to sound alarmist, I hope all our readers pay attention to this very real Canary in a Coal Mine issue.
The Democrats believe the sole issue facing American voters is abortion. They are running down that hill as fast as they can while ignoring the genuine issues of inflation, tanking home prices and high interest rates, the national debt, border security, and fuel prices.
Some relief to the diesel shortage is on the way. At least two ships carrying a total of some 90,000 metric tons of diesel and jet fuel have been diverted from their original destinations in Europe to the East Coast, as reported by Reuters on October 14. The vessels carrying 1 million barrels of diesel are due to arrive in New York.
However, it will take some time to get that diesel offloaded and distributed. Furthermore, what are the current production levels at the refineries and what is/can be done to ramp up that production? What, if any, onerous government regulations are hindering production? Again, the Biden Administration is keeping a little too silent on this issue.
Take a good look around folks, and vote accordingly.
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Feature Photo Credit: Fuel truck Chevron station via Pixabay, cropped and modified
JAW3 says: So who will pay a bigger price for this coming crisis? Will it be the green heads who are foolish zealots, the Corporate types who cave to the green lobby and divert their refineries to soy bean distilleries, or to the politicians who never made an informed judgement by asking for input from all sides and not just the screaming children with their hands glued to their arses.
And if it’s to be believed, where were the tankers diverted from?
Quartermaster says: They should get the membership lists of ecofreak organizations, especially “Earth First” and tell them they get no fuel and only a limited amount of foodstuffs, enough to keep them alive.
Scott says: QM, the only issue I have with your post is the last statement… I believe you’re being far too generous. Tp paraphrase Marie Antionette, and their own “geniuses”, LET THEM EAT BUGS!
Unless some idiots decide to implement price controls, we won’t run out of diesel fuel. However, the price of diesel will climb. That will encourage the oil industry to increase capacity. With any luck, the Biden administration will get out of the way. Those people have no idea of how to lead or follow. They are just good at telling big lies.
The northeast, in particular, uses a lot of fuel oil (which is similar to diesel fuel) for heating. As winter kicks in, the demand for fuel oil will rachet up. So, prices for diesel fuei and fuel oil will climb. Inflation could increase, and people will be turning down the heat. People need to check on their neighbors to make sure they are not freezing.
Hominem Humilem says: There is no quick way to increase capacity; the environmentalists have seen to that via laws that prevent construction of more refining and storage. Even if these foolish laws are repealed, constructing that infrastructure takes time (and resources that are already in short supply).
We have earned the reward we voted for–a political class that responds quickly to the economically illiterate green movement and lacks any understanding of how the magnificent world bequeathed by their much smarter predecessors works.
JAW3 says: Unless we ever see Biden rescind his executive order “All of Government” decrees against basically the American way of life, this will not really ever end
[…] Starship Progress Victory Girls: Pelosi Attacker David DePape Is A Drug-Addled Leftist Progressive, A Major Diesel Shortage Is Approaching Fast, and No Pandemic Amnesty For Anyone, Accountability For All Volokh Conspiracy: The Arbitrariness of […]
Nohaaj says: Lol, those two ships will provide the equivalent of less than 5 hours of the transportation industry’s consumption. People keep citing those two ships as “relief”. Hah. Those two ships are essentially meaningless in our supply chain.
The problem is real. Both with our supply chain, and our journos.
Mansfield, the diesel supplier mentioned in the post, also has on the site, “What Does ‘Diesel Shortage’ Really Mean? It points out that there has been this kind of shortage before. As for now:
>>>>
For diesel specifically, the shortage will be painful at the macro level, but hopefully manageable at the micro level. Put another way – a tight diesel supply will force prices to go up, which will eventually make it too expensive for some people. High prices will bring demand back down enough that it balances with limited supply. At the US economy level, that means pain as consumers cut back and businesses slash costs. At the local, load-by-load level, supply will still be available for those for whom diesel is a business-critical priority.
That’s not to say there won’t occasionally be situations where there is a true physical lack of products. Some cities might run dry on diesel for a few days, at least at the terminal level. But the fuel supply chain is dynamic, and suppliers will rally to fill in any gaps in supply. Once again, those shortages will drive up prices, which will make it economical to long-haul product from surrounding markets which do have supply. The fuel will be delivered but at higher costs.
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In other words, consumer prices will go up a lot because (a) diesel prices will go up from reduced diesel supply and (b) product producers will therefore pay more to ship to market. Also, scarcity of end-buyer products of all kinds will decrease because some producers simply will not be able afford to ship, driving consumer prices still higher.
But "consumer" also includes industrial diesel consumers such as electrical plants. And even if those plants use coal, that coal has to get there somehow. Almost always, it is by train, and guess what powers locomotives? Diesel fuel which is burned to generate electrical power to turn the wheels (hence "diesel-electric" locomotives).
Coal account for just over than one-fifth of electricity production in the US; it takes a *lot* of coal. According to the TVA, the Kingston Fossil Plant near Knoxville, Tenn., burns "about 14,000 tons of coal a day, an amount that would fill 140 railroad cars." What do the 700,000 homes getting juice from that plant do when the railroads cannot deliver that much coal because they cannot get enough diesel?
Electricity generated from fossil fuels of all kinds accounts for 61 percent of America's electricity. Again, those fuels have to get there somehow. Much of liquid fuels and natural gas, I would guess, is piped in. But pipes don't run themselves; they take electrical power to run also and more importantly to monitor and operate safety controls.
So why not produce more diesel? For sure, refineries will attempt to do that, but operating capacity is already near its highest practical rate – around 90 percent – and routine maintenance prevents much higher than that. But wait! There's more! Total capacity of US refineries has fallen during Biden's term from its record high of 18.98 million bpd in 2019, to last August's (latest EIA figures available) of 17.962 million bpd.
Cameron says: Someone get Pete Buttigieg on the case. He’ll remind us he’s gay and that should solve this problem.
[…] them of price gouging rather than own up to his own responsibility concerning today’s crappy economy and the inflation we are dealing […]
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