America Running on Fumes – Only 25 days of diesel fuel remain

Diesel stockpiles in the U.S. are reportedly at their lowest point since 2008, with only enough fuel for a 25-day supply – Bloomberg

With increased fuel needs for winter around the corner and inflation already at 40-year highs, a new threat to the American economy has emerged; running out of diesel fuel. While this seemingly has little effect on the average person’s day to day life, diesel is the lifeblood of American transportation. Diesel is also what drives large parts of the repossession industry and the entire auto transport industry.

According to the U.S. Energy Information Administration (EIA), the current average price of diesel is $5.34 per gallon. That’s $1.67 per gallon higher than the same time last year. Hardest hit is New England, where diesel fuel is burned more for heat more than anywhere else in the country and their current stockpiles of diesel fuel are at a third of normal for this time of the year.

Not a surprise, the dishonor of owning the nation’s highest cost of diesel fuel is California. The Golden State’s average cost per gallon is closing in on $6.50 per gallon. Almost $2.00 per gallon higher than the same time last year.

America’s diesel fuel crisis is hitting just as the winter demand beginning and the Energy Information Administration is reporting that there is only 25 days of supply remaining. According to National Economic Council Director Brian Deese, diesel inventories are “unacceptably low” and “all options are on the table” to bolster supply and reduce prices.

One reason for the shortage, is that the demand for diesel, unlike gas and jet fuel, recovered from reduced pandemic demand at a much faster pace. And diesel is necessary for transporting food and consumer goods as well as powering construction equipment and farms. Of course, let us not forget the US military which uses vast quantities even in times of peace.

The American transportation sector alone consumed 46.82 billion gallons in 2021. That’s an average of about 128 million gallons a day.

According to Bloomberg News, there may hope on the horizon. One million barrels of diesel fuel is said to be headed to New York, after two shipping vessels were diverted from their original European destinations. At the same time, a Trainer, Pennsylvania-based diesel refinery is coming back online after its seasonal maintenance, which will help increase diesel production in the U.S.

Solution?

Without drastic governmental intervention, the impact on transportation costs for goods could cause inflation to soar to even more catastrophic levels. But what can they do?

National Economic Council Director Brian Deese reported that the Fed does have some tools to bolster diesel supply, like tapping into the Northeast Home Heating Oil Reserve, which houses one million barrels of diesel for use in the event of disruption in supply. “We have looked very carefully at being prepared to deploy as and when necessary,” he said.

But according to The Washington Post, with the current state of demand for diesel fuel is so high, that even if that million barrels of diesel were delivered from the Northeast reserves, they would be depleted in less than six hours.

There is no easy fix to this as it has been a crisis in the making for almost two-years under a White House that had declared their desire to put and end to fossil fuels in our nation. Fossil fuels that are needed to grow food, transport it and keep people warm in the winter. And of course, diesel which is the plasma of the auto transport and repossession industries. Industries that help drive the financial sector.

This newest of Washington created crises is a trifecta of calamity that appears to be striking at a time to the most damage. It may be too late. You can’t unscramble an egg.

Source: Yahoo, Newsweek, The Drive, Bloomberg