As of Friday, October 14, the U.S. had 25.4 days of diesel supply left in storage. That was according to data from the Energy Information Administration (EIA). That means the shortage will hit immediately after the election. We have already seen some rationing in the northeast.
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, Newsweek reported earlier this month.
Last week, the Energy Information Administration (EIA) reported that distillate inventories were at their lowest levels since 2008. (The primary distillates are diesel, jet fuel ,and heating oil). However, in 2008 distillate levels were low coming out of spring. Currently, they are low going into fall. That’s far worse than the situation in 2008, says one Forbes contributor.
According to Robert Rapier, a senior contributor to Forbes, “Distillate demand generally spikes in spring — when farmers are planting crops — and in fall, when they are harvesting those crops and people start buying fuel oil for winter. Thus, a low distillate inventory in late April 2008 isn’t quite as serious as a low inventory in October 2022. In fact, distillate inventories haven’t been this low in October since the EIA began reporting this data in 1982.
These low distillate inventories are why diesel prices are above $5.00 a gallon nationwide, even though the nationwide average price for gasoline has dropped below $4.00 a gallon.
Rapier says the loss of Russian imports is part of the problem. Prior to Russia’s invasion of Ukraine, the U.S. was importing nearly 700,000 barrels per day (BPD) of petroleum and petroleum products. Most of those imports were finished products and refinery inputs that boosted distillate supplies in the U.S.
THE SHORTAGE IS SPREADING TO THE SOUTHEAST
A major fuel supply and logistics company is raising a red flag on upcoming diesel fuel shortages.
According to Fox Business, Mansfield Energy issued the alert Friday stating there was a developing diesel fuel shortage in the southeastern region of the United States. The company speculated that the shortage could be generated from “poor pipeline shipping economies” and a historically low supply of diesel reserves.
“Poor pipeline shipping economics and historically low diesel inventories are combining to cause shortages in various markets throughout the Southeast,” the company said. “These have been occurring sporadically, with areas like Tennessee seeing particularly acute challenges.”
Reuters confirms diesel supplies are becoming critically low with shortages and price spikes likely to occur in the next six months unless and until the economy and fuel consumption slow.
That shouldn’t be a problem then. Bidenistas are planning for a slow economy and fuel consumption. Our quality of life will sink under Democrats.
Related
Leave a Comment