Diesel Fuel Shortage 2022
Nothing is as important and as publicized as the fuel shortages in the present year, 2022. The news has been mixing up the war in the Ukraine, the Biden administration closing the Keystone pipeline, Presidents Putin of Russia, and Zelensky of Russia into one big horror story. Is the fuel crisis so bad if according to OPEC more than 70 million barrels of petroleum are produced worldwide every single day? This translates into almost 49,000 barrels being extracted each minute. Incidentally the United States is on the top of the list of world oil consumers.
The connections from ship to suppliers need to be laid out on a silver platter clearly for all to understand if we want to have a successful supply chain. When a supply ship comes into port the containers must be removed from the ship as quickly as possible to get the products to the companies that ordered them and ultimately to the consumers in a timely fashion. Since COVID-19 began there has been a massive backup of product containers waiting in ports to be transported to their proper destinations. One reason this was happening was a lack of truck drivers to transport the supplies and even when the truckers began to return to their jobs there were not enough containers to transport the products from distant countries. This problem is still with us, and reliable drayage services are trying to improve the transportation of supplies to their destinations.
New and serious difficulties in the supply chain have cropped up since President Biden has curtailed the use of a crucial oil pipeline combined with the threat of a third world war is delaying and complicating the import of fuels specifically diesel which is exclusively used to fill the anxiously waiting tanks of the trucks transporting the goods in the supply chain.
The stockpiles in the United States of diesel fuel are at a twenty-year low. Just when Americans are doing a great deal of their shopping online the supply chain just cannot keep up with the demand. There are so many reasons for the shortage of diesel fuel and in this article, we will touch upon several of them.
The Texas Deep Freeze
The natural way of the earth is that Texas is a pretty warm state generally. However, this winter’s cold weather in Texas caught everyone by surprise. Just when we needed the Texas oil refineries to increase their production due to the shortages for the reasons listed above, (the war in the Ukraine) and the closing of the Keystone pipeline on President Biden’s first day in office, Texas’ oil production was greatly reduced.
Texas is the largest oil-producing state in the nation with over 4.6 million barrels extracted daily. After the oil is extracted, the oil needs to be refined to diesel grade and Texas is the home of the nations top diesel refineries.
While general gasoline prices are skyrocketing, diesel fuel is hitting record high for its costs. Dave Puma, a truck driver claims that fuel costs are more than $1,000 a month and he only transports locally! Each fill up of Puma’s 18-wheeler that has two huge diesel tanks costs $500.
Unfortunately, during the height of the pandemic the demand for diesel fuel decreased since fewer planes were taking off and trucks were not being utilized fully. In fact, many of the oil refineries that were shut down during the pandemic have not as yet reopened.
The Northeast Home Heating Oil Reserve (NEHHOR)
President Biden is seriously considering an emergency declaration of opening the emergency reserve of heating oil. (Diesel and heating oil are almost identical and can be interchanged.) The last and only time that this reserve was opened was during the very destructive and deadly hurricane Sandy that ravaged the east coast of the United States in 2012.
On July 10, 2000, President of the United States Bill Clinton signed the emergency reserve of heating oil which established a two-million-barrel reserve of the Strategic Petroleum Reserve in the Northeast. It was considered a large enough reserve to ensure that the cold weather supply interruptions would give Northeast home heating oil customers enough of a supply for ten days. This was the estimated time that it would take for ships to travel from the Gulf of Mexico to New York Harbor carrying the necessary oil.
In 2011, the reserve release was changed to one million barrels and the fuel that was stored was converted from the original #2 heating oil to a cleaner oil called ultra-low sulfur distillate (ULSD).
Fortunately, there was no need in 2000-2001 for this reserve to be used but it was kept as an emergency source of oil and confirmed again when George W. Bush was elected president.
Now, President Biden is considering releasing the NEHHOR unfortunately this is too little too late. This would only fill in 65% of a day's needs of oil in the Northeast and therefore some analysts say that the significance of the release would be minimal.
Diesel Fuel Is More Expensive Than Regular Gasoline
The shocking prices at the pump are not getting any lower. The price for regular gasoline is going to over $5.00 and if the doomsday predictions for the summer come true, we will be seeing $6.00. Look at the gas crisis of the seventies and the prices were nowhere near these comparatively. We also were more willing to conserve and not travel such long distances as often. During the oil crisis of the seventies, folks were instructed to go to the pump only every other day, therefore, you could not fill up as often. Analysts are not predicting excessive slowdowns of people using car transportation so as long as the supply of gas is their people will be lining up at the pumps despite the price increases.
Not so with our vital truckers. Since their fuel costs are so much more both because a truck may have more than one tank and to fill up, we are not talking about one or two hundred dollars. This is already making a major impact on the deliveries of indispensable products especially food. According to the AAA, the nationwide average diesel price is at $5.570 and regular gasoline is at an average of $4.593 per gallon. Since January 1, diesel fuel prices have already risen by 55%.
Diesel fuel is produced from a hydrocarbon mixture which is the byproduct of when crude oil is distilled. Diesel is heavier than regular oil and additionally diesel has a much higher boiling point than water or regular gas. For example, regular gas can evaporate at room temperature while diesel fuel has a very low evaporation point. Diesel requires heat and compression to work properly and is classified as combustible which signifies that if you light a match the diesel fuel will put it out. On the other hand, regular gas needs a spark such as a match in order to ignite. Diesel fuel’s boiling point is even higher than water.
How does diesel fuel work in an engine? The function that it uses is called direct fuel injection which means that the diesel fuel moves straight into the cylinder and can withstand lots of pressure and heat. With regular gas vehicles, the spark plug is enough to create the spark with less heat and pressure required. Diesel fuel does give more mileage and power per gallon but works less efficiently than gas in the cold weather.
The diesel fuel crisis is a complex issue. Most folks are blaming the closing of the Keystone pipeline and the war between Russia and the Ukraine as the major players in the increase and shortage of diesel fuel. Some analysts explain this crisis as the, “perfect storm” meaning that there is not just one or two things that go wrong but other tactics that had to occur to cause such an upheaval. Remember when the sky was clear, and the roads were empty during the height of the COVID-19 pandemic. At that time, there was a decrease in the need for diesel fuel and the production was cut back. Weather events, such as the Texas frost, hurricanes and other acts of G D caused the inability to bring crude oil supplies from the Midwest. The pressure by environmentalists to switch to an electric economy has also caused ill feelings and set unrealistic goals to implement these changes. Understanding exactly what diesel fuel is and what it is used for will help politicians and leaders make wise decisions in how to get the supply chain functioning again.
Using a reliable drayage service can also help to get your supplies more efficiently and on time to their destinations. When truckers do not have to go such long distances to pick up and transport supplies, they will more easily be willing to pay for diesel. It is not realistic at this point in time for one trucker to drive from east to west in this vast country consisting of thousands of miles.