Posted in: Infrastructure,
by Patrick DeHaan on Jun 7, 2011 12:11 PM
I've gotten hundreds of calls seemingly all asking why prices in Illinois, Michigan, and a handful of other Upper Midwest states are seeing prices higher than California and even Hawaii.
As many of you are probably well aware, with the onset of warmer weather, Corvette cruises, and beach days also comes with the onset of Ozone Action Days and Air Quality alerts. It is the latter that has contributed to why we must use cleaner burning gasoline every summer. Refiners have likely gotten use to such switch overs, but unfortunately, many refiners still have kinks or problems getting their plants fully suited for the game that is summer gasoline production.
This spring we've seen refinery after refinery in the Great Lakes have problems. We've seen flooding on the Mississippi impact some refiners that feed the Midwest, we've seen severe weather disrupt refineries and pipelines that feed the area, just about anything that could go wrong did go wrong... at some point.
Memorial Day weekend may have been (and hopefully was) the end of problems for such energy installations. There were a whopping five major problems that led prices to spike in Michigan, Wisconsin, Indiana, Ohio, and Kentucky. TransCanada's pipeline that sends Canadian crude to the region leaked and was shut down. Enbridge's pipeline that sends Canadian crude suffered a power outage and was temporarily offline. Severe weather also brought down Marathon's Robinson, IL plant. Other outages occurred yet again at ExxonMobil's Joliet, IL plant and Citgo's Lemont, IL plant.
Chicago traded gasoline soared. Wholesale gasoline prices soared. Pump prices than followed sky high. It appears that since Memorial Day weekend the wheels are again moving and refineries are getting back online and pipelines are resuming shipments. Since last weekend, Chicago gasoline has fallen near 50 cents per gallon, which over the next week or two will translate to lower gasoline prices.
Like yours truly, many motorists in the Midwest are skeptical. And understandably so. No one knows if another plant will have a shut down. However, if things do remain quiet for the next couple weeks and we don't see the Green Goblin swoop in and mess things up, gasoline prices could begin dropping nicely. If nothing gets in the way, pump prices could drop 20-50 cents from their peak shortly after Memorial Day.
Yep, don't hold your breath, but at least we can be optimistic that the springtime blues are over.