You are here
Deadly floods choke everything from oil to wheat in US Midwest
[HOUSTON] Deadly flooding across the US Midwest is disrupting everything from oil to agriculture, forcing pipelines, terminals and grain elevators to close and killing off thousands of pigs.
The floods have killed at least 20 people and closed hundreds of roads across Missouri and Illinois, according to AccuWeather Inc. Rain-swollen rivers will set records in the Mississippi River basin through much of January. 80km of the Illinois River have been closed, according to the US Coast Guard, as well as 130.4km 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 traffic and threatened refinery and chemical operations. The current situation increases stockpiles of crude oil and may extend this year's price slide.
Hog producers in southern Illinois were calling other farmers, hoping to find extra barn space to relocate pigs, said Jennifer Tirey, executive director of the Illinois Pork Producers Association.
Processors are sending additional trucks out to retrieve market-ready pigs, she said on Thursday. In one case, an overflowing creek took out electricity and made roads impassable, causing 2,000 pigs to drown.
'SO MUCH RAIN'
"There was no way to get the pigs out," Ms Tirey said. "Honestly, it was just an act of God. That creek had so much rain." So far, the biggest oil shutdown involves Enbridge Inc's Ozark pipeline, which was booked to carry about 200,000 barrels a day this month to Wood River, Illinois, from Cushing, Oklahoma.
The outage of the section under the Mississippi River may further add to stockpiles at Cushing that reached a record high last week.
"The closure of the Ozark pipeline will just add to the stocks at Cushing," said 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 because of the river's condition, the company said in an e-mailed statement.
St Louis received 15cm from Dec 26 to Dec 28, according to AccuWeather data. By Wednesday, Ameren Missouri was ferrying employees to and from its Sioux Energy Centre north of St Louis. The coal-fired power plant is still operational and workers will continue to travel by boat until the floodwaters recede, the company said in a statement.
Kinder Morgan Inc shut its Cahokia terminal in Sauget, Illinois, and its Cora terminal in Rockwood, Illinois, company spokesman Richard Wheatley said by e-mail. Cahokia handles chemicals, coal, cement and metals while Cora handles coal and petcoke, according to the company's website. Kinder Morgan declared a force majeure, which protects it from liability for contracts that go unfulfilled for reasons beyond its control.
Exxon Mobil Corp is shutting a fuel terminal on the Mississippi River at Memphis "in anticipation of severe weather," spokesman Todd Spitler said in an e-mail Wednesday.
Barge operators shipping grain took advantage of early forecasts for the heavy rain and flooding to transport loads before Christmas to ports in New Orleans, where there's "adequate inventory," said Wes Traina, logistics manager for Zen-Noh Grain Corp in Convent, Louisiana. Still, high water may continue to slow shipping and loading throughout January, he added.
"The biggest concern from the high waters and fast currents will be from barges hitting a bridge and breaking apart," Mr Traina said by phone. "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 extended hours to accommodate the large number of farmers hauling in grain from on-farm bins that could be compromised by flooding, said general manager Carl Tebbe.
"We're just hopeful the water doesn't quite get as high as what they're saying," Mr Tebbe said. "Everyone has done a lot of work."
The Coast Guard issued a high-water safety advisory for 566 miles of Mississippi River between Caruthersville, Missouri, and Natchez, Mississippi. It also instituted high-water towing limitations near Morgan City, Louisiana, for vessels heading south that are 600 feet or shorter, it said in a statement.
The floodwaters may eventually reach Louisiana, which has 10 refineries in the Baton Rouge-New Orleans area with a combined capacity of about 2.5 million barrels, or 13 per cent of the nation's capacity, said Andy Lipow, president of Lipow Oil Associates in Houston.
Refineries including Exxon's facility in Baton Rouge and Marathon Petroleum Corp.'s in Garyville, Louisiana, will probably try to get their crude and ship out their products if they can before the river levels rise, Mr Lipow said.