Tired of seeing prices march inexorably upward at the grocery store? Well, sorry, but here’s a bit more bad news for you: a massive fire that just raged at a BP refinery, the sixth-largest fuel refinery in the US, has put this season’s harvest at risk. How so? By making the fuel needed to reap the harvest all the more expensive, pushing the limits of what farmers can afford to pay for the diesel fuel needed to bring in the crops.
In fact, the problem was bad enough that DoT had to declare a regional emergency for four of the farm-centric states in the Midwest, with Climate Nexus reporting that on Twitter saying:
“A Department of Transportation agency declared a regional energy emergency for four Midwestern states on Saturday after a fire at an oil refinery in Indiana forced the facility to shut down.”
A Department of Transportation agency declared a regional energy emergency for four Midwestern states on Saturday after a fire at an oil refinery in Indiana forced the facility to shut down.https://t.co/bWPAVQer7Q
— Climate Nexus (@ClimateNexus) August 28, 2022
Essentially, the problem is that the price of wholesale fuel, which is what farmers rely on when buying fuel for farm equipment, particularly the massive farming operations that can span thousands of acres in the Midwest.
That price increase, taking place just before harvest season, could either put the price of fuel out of reach by farmers already bloodied by fertilizer shortages and high fuel prices, or make food more expensive because of the hugely increased cost put into not just sowing but also reaping them.
Vanessa at Trending Politics News, reporting on the fire itself and the details surrounding the facility so seriously damaged by it, along with the potential after-effects of the fire on the agricultural sector in those states, reported that:
The fire happened on August 24th, knocking out the electrical power and the cooling water system used to prevent equipment damage. As a result, the facility will remain shut while it undergoes assessment.
Shutting down the plant due to this fire can have lasting, adverse effects on most of that region’s distribution centers, as it processes gasoline, diesel, and jet fuel. And right when farmers are preparing for the harvest season. This is also the time of year when the demand for diesel rises as people get ready to start filling their heating tanks, and more extensive machinery used for farming relies on the energy source. Stockpiles of gasoline are currently at their lowest since 2014, and diesel stockpiles have been at their lowest since 2006.
The Federal Motor Carrier Safety Administration has made an emergency declaration and the need to transport gasoline, diesel immediately, and jet fuel for Illinois, Indiana, Michigan, and Wisconsin, the four states that rely on energy from the Whiting processing plant in Indiana. This declaration will allow these states exemption from specific federal regulations to manage the emergency. It is estimated that the plant provided between 20 to 25 percent of the refined gas, diesel, and jet fuel to these four states.
[…]CBOB, a common grade of gasoline, increased by 30.5 cents a gallon in the Chicago area on August 25th, just one day after the oil refinery shutdown. Ultra-low sulfur diesel increased by 17 cents on the same day.
In fact, the problem was bad enough that even the Wicked Witch of the Midwest, Governor Gretchen Whitmer of Michigan, jumped in to deregulate fuel transportation trucking and speak on the emergency, saying:
“The impacts of the outage at the Whiting facility will be widespread across our region, and I am taking proactive steps to help Michiganders get the fuel they need to drive their cars and help businesses keep their products moving. With today’s action, I am freeing up more gas supply and removing any impediments to gas delivery to cut down wait times at stations.”
BP has spoken on the situation and said the refinery will come back online in the coming days. But if that is delayed and fuel prices in the region remain elevated, the damage to the agriculture sector in the region could be astoundingly bad.