May 9 (Bloomberg) -- The Mississippi River is forecast to crest today in Memphis, Tennessee, just below its 74-year-old record, as a bulge of water moves south toward the riverside refineries in Louisiana, a threat that pushed gasoline futures to the largest gain in 21 months.
The Mississippi threatens 3,075 buildings, including 949 homes and 12 apartment complexes, in Tennessee’s Shelby County, which includes Memphis, the Memphis/Shelby County Emergency Management Agency said yesterday. Exxon Mobil Corp. shut its fuel terminal in the city April 29, Kevin Allexon, a company spokesman, said in an e-mail.
“A big monster is rising up on the downtown shores and wrapping its arms around the city,” said David Shular, a spokesman for Shelby County. “There are crowds of people along the riverbank just to look at it because they just haven’t seen it this high.”
The river is forecast to reach 48 feet in Memphis at 7 p.m., compared with the old mark of 48.7, according to a revised National Weather Service forecast.
“Essentially it is beginning to crest right now,” said Bill Borghoff, an NWS meteorologist in Memphis. “We expect it should remain near 48 feet through Wednesday night or so.”
Heavy rain on ground saturated by last winter’s melting snow has caused flooding across the central U.S., said Jeff Graschel, a hydrologist with the Lower Mississippi River Forecast Center in Slidell, Louisiana.
The Mississippi River, the third-largest watershed in the world, drains 41 percent of the continental U.S. Flooding along the river and its tributaries has closed roads and set crest records in New Madrid and Caruthersville, Missouri. Barge traffic stopped on the Ohio River, which drains into the Mississippi at Cairo, Illinois, last week.
The water has the potential to close oil operations in the New Orleans-to-Baton Rouge region, which has 11 refineries with a combined capacity of 2.5 million barrels a day, or 13 percent of U.S. output, said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
“The worst case is that the Mississippi rises and we get actual flooding in the refineries and that could shut them down several months like we saw with Hurricane Katrina,” Lipow said today on Bloomberg Television’s “InsideTrack.” However, he said he doesn’t expect the flooding to get that bad.
Gasoline for June delivery surged 18.83 cents, or 6.1 percent, to settle at $3.2784 a gallon on the New York Mercantile Exchange. It was the first gain in six days and follows a loss of 11 percent last week. The gain was the largest since July 30, 2009.
In addition to flooding concerns, Chevron had a crude unit fire in its Mississippi refinery and Exxon Mobil Corp. had a unit failure in its Illinois plant.
At Baton Rouge, the Mississippi was at 40.91 feet as of 2 p.m. local time, above the 40-foot mark considered major stage flooding, according to the weather service.
The U.S. Army Corps of Engineers opened the Bonnet Carre Spillway, upriver from New Orleans, today, said Rachel Rodi, a spokeswoman for the agency. The spillway allows excess river water to flow into Lake Pontchartrain, which drains into the Gulf of Mexico.
Because of the damage that the river water can cause to commercial fishing, Robert Barham, secretary of the state Wildlife and Fisheries Department, asked the U.S. Department of Commerce declare a fisheries failure, which would allow federal assistance.
The flood threat on the Mississippi has led Louisiana Governor Bobby Jindal to request 1,500 National Guard troops and to declare an emergency in advance of flooding there.
The Mississippi and Ohio rivers are major delivery systems for commodities and petroleum products. Wheat, soybeans and other crops are grown along their banks.
“Tennessee hasn’t seen flooding like this in 75 years,” said Lee Maddox, spokesman for the Tennessee Farm Bureau. The northwestern part of the state, where entire counties are largely under water, is “the breadbasket row-crop area of the state,” with concentrations of corn and soybeans.
“Corn is out of the question because that window is closing this week to keep up a good yield,” Maddox said. “Now their only option is soybeans, if they can get that planted in June. It’s unfortunate, especially at a time when commodity prices are so good. They’re the best prices ever, and our farmers aren’t going to take part in that.”
About 900,000 acres may be affected in Mississippi, mostly corn, soybeans and cotton, said Greg Gibson, spokesman for the Mississippi Farm Bureau Federation, based in Jackson.
Mississippi has about 11 million acres of farmland, and the land under flood threat “is the richest, most fertile farmland in Mississippi,” he said. “If the waters don’t go down quickly after the flood, farmers aren’t going to be able to plant.”
As long as Louisiana’s levees hold, crop losses will be smaller than for other states because flooded areas will be mainly swamp and woodlands, said Kyle McCann, associate commodity director for the Louisiana Farm Bureau Federation.
Should the levee system fail, “then you’re talking about serious agricultural damage,” he said, declining to give an acreage estimate.
Flooding from other rivers has killed at least two people in Arkansas and closed a 23-mile stretch of Interstate 40, the third-longest highway in the U.S. system.
Across the Mississippi from Memphis, in Arkansas, Crittenden County Emergency Management Coordinator Ronny Rogers said he is confident the levee will hold back the river.
“I don’t have my bags packed,” Rogers said. “I’m not worried about the levee breaking.”
The levee protecting the county, which includes West Memphis, Arkansas, can withstand floods up to 56 feet, Roger said. It has never held back a flood as high as the current one.
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