Low Water Levels Complicate Oil, Products Movements on the Mississippi
Low water levels in the Upper Mississippi River are tying up barge traffic at a time of dramatic change for movements of energy commodity-laden vessels on the river, according to the U.S. Department of Energy's Energy Information Administration (EIA).
"On the crude side, what we're seeing is an increase in movements from PADD 2 to PADD 3, from North to South," said EIA analyst Arup Mallik.
PADD 2 and PADD 3 are the two U.S. Government-designated "Petroleum Administration for Defense Districts" that correspond to the Midwest and Gulf Coast regions, respectively.
"On the products side, it's really just a reversal in direction of volume," added Mallik.
He explained that barge and tanker shipments of petroleum products from PADD 2 to PADD 3 have been on the increase. Waterborne products shipments in the opposite direction have been declining, though.
The following graphs, based on EIA data, show how annual barge and tanker movements between PADDs 2 and 3 have changed within the past decade.
The Mississippi River has long been a major avenue of commerce through the midsection of the United States. Surging oil production growth from the Bakken Shale play, coupled with limited southbound pipeline capacity and strong demand for railcar capacity, have elevated the river's role in transporting Bakken crude to Gulf Coast refineries. However, low water levels in the Upper Mississippi have created navigation challenges and exacerbated traffic congestion for southbound barges and tankers.
The low water levels stem from drought conditions that have been plaguing much of the Lower 48 United States west of the Mississippi. As the U.S. Drought Monitor website hosted by the University of Nebraska-Lincoln shows, some of the driest conditions extend through two major watersheds that drain into the river: the Arkansas-Red-White and Missouri river basins. The drought has kept water levels below normal in these tributaries and in the Upper Mississippi River, which extends upstream from Cairo, Ill., at the confluence of the Mississippi and Ohio rivers.
The U.S. Army Corps of Engineers has been working to ease the flow of barge and tanker traffic in the Upper Mississippi by dredging sediment from the navigation channel and blasting rocks from the river bottom. The National Weather Service also expects Mother Nature to provide some relief in the coming months in the form of drought-mitigating precipitation in portions of the Great Plains and Upper Midwest.
"Perhaps the permanent solution would be an easing of drought conditions because more rain would eventually be too much rain and a river with too much water is also not navigable," concluded EIA analyst M. Tyson Brown.
Matthew V. Veazey has written about the upstream and downstream O&G sectors for more than a decade. Email Matthew at firstname.lastname@example.org. Twitter: @Matthew_Veazey