Scrambling for diesel as Midwest pipeline shuts before harvest
Delivery points outside of Arkansas, such as Cape Girardeau in southeast Missouri, Norris City in southern Illinois, or Seymour in south-central Indiana are fairly close to rivers and rail lines, giving suppliers those options.
But it's more expensive than before to book the railcars and barges due to the boom in inland crude oil production. Even if trains and barges are available, they may not have access to the right offloading infrastructure.
"There aren't many terminals that have the ability to unload diesel fuel via railcars or barge, particularly in the Little Rock market," said Chad Pistulka, manager of supply and logistics for agricultural fuel supplier CHS Inc.
Longer-term, there may be hope on the horizon.
A week ago, Magellan said it was seeking customer commitments to spend $250 million-$300 million to build a new 75,000 bpd refined products pipeline that would link its Fort Smith and Little Rock terminals.
After the shutdown caused a "significant diesel supply problem," the company is optimistic about the project, Mears said.
They will know soon: the deadline for binding commitments is Oct. 16. The bad news for Arkansas? It could take 18 months to build.
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