Posted in: Gas Prices,
by Patrick DeHaan on Sep 13, 2010 02:16 PM
In another frustrating case for motorists, Enbridge recently reported a rupture at its largest pipeline feeding refineries in the Midwest. Line 6A ruptured near Romeoville, IL late last week, carrying nearly 460,000 barrels of oil per day to refineries in the Chicago and Northwest Indiana area.
The immediate impact is this: three major refineries are lacking their main source for crude oil, which they then refine into gasoline. BP's Whiting, Indiana complex has the capacity to refine 410,000 barrels per day, but will likely cut production as Enbridge halts its pipeline. Refineries owned by Citgo and ExxonMobil will likely also be impacted. The three refineries have the capacity to refine 808,000 barrels per day when fully operational.
The impact may also affect Canadian refineries, but that remains to be seen. The Enbridge pipeline splits near the West tip of Lake Superior. One line flows southeast to Chicago, one line goes through Michigan's Upper Peninsula to Canada.
The closure of the pipeline has resulted in steep price hikes in many communities. Prices as far away as St. Louis have risen as supply remains in question.
The U.S. oil industry is becoming increasingly reliant on pipelines such as the one Enbridge runs from Alberta. Canada is the United States biggest source for oil, shipping some 82 million barrels in June of this year. That compares to Saudi Arabia who shipped less than half that amount- 40.5 million barrels. The 82 million barrel number is also nearly half of what all OPEC countries export to the U.S.- some 165 million barrels in June.
The increased reliance on these pipelines will certainly not ebb quickly- the U.S. is increasing use of oil from Alberta's oil sands developments. New pipelines have and are continued to be constructed, but some aren't expected to come online until 2013.
This is Enbridge's second pipeline leak and closure in two months. Previously, their 6B line ruptured in Marshall, Michigan, causing thousands of barrels to leak into the Kalamazoo River.
Line 6A, the latest rupture, is 34" and can carry over 600,000 barrels per day. It costs between $3 and $4 to ship a barrel from Alberta to the Chicago area.
Motorists should watch the news for developments on the pipeline rupture- the quicker the pipeline is repaired, the faster gasoline prices will come back in line with the national average.
Prices compared to their week ago level in the affected area:
Illinois- a week ago $2.79, today $2.97.
Michigan- a week ago $2.77, today $2.92.
Indiana- a week ago $2.70, today $2.84.
Missouri- a week ago $2.49, today $2.60.
Ohio- a week ago $2.69, today $2.83.
Wisconsin- a week ago $2.68, today $2.83.
Kentucky- a week ago $2.71, today $2.82.