May 10 (Bloomberg) -- The Mississippi River is holding just below 48 feet in Memphis today as flooding flows south, threatening more communities, refineries and shipping traffic before emptying into the Gulf of Mexico past New Orleans in about two weeks.
The river reached what may be its highest point in Memphis of 47.85 feet (14.6 meters), less than the expected 48 feet, at 2 a.m., said Danny Gant, a National Weather Service meteorologist. It was at 47.76 feet at 3:45 p.m., according to the weather service’s website.
“We think it will hover right around that area, it might go a hair or two higher,” Gant said by telephone from Memphis. “We’re just going to stay right around there for 12 to 24 hours and then it is going to slowly start to fall.”
Gasoline futures advanced amid concern that the flooding will disrupt fuel production and distribution. Futures rose 3.1 percent to $3.3797 a gallon, adding to a 6.1 percent gain yesterday, the biggest since July 2009.
The rising water has interrupted coal shipments to power plants in Tennessee, flooded more than 100,000 acres of Missouri cropland, forced thousands from their homes and prompted the Army Corps of Engineers to open the Bonnet Carre Spillway to reduce the river’s force through New Orleans.
The Mississippi is the largest river system in the country, the third-largest watershed in the world and drains 41 percent of the continental U.S., according to the Army Corps.
“We are watching a system this nation has invested $13 billion in and we are watching it get stressed and tested to its limit,” said the Army Corps Colonel George Shepard on Bloomberg Television’s “InsideTrack” today. “Right now we can calculate we have had $351 billion of damages already prevented before this flood happened, so I think we have a good investment.”
Valero Energy Corp. was forced to reduce operations at its refinery in Memphis to between 80 percent and 85 percent of capacity because of the flooding, according to people familiar with refinery operations.
Flooding limited movement of products in and out of the plant by barge, said the people, who declined to be identified because they aren’t authorized to speak for the refinery.
To relieve the threat to New Orleans and Baton Rouge, Louisiana’s capital, the corps may open the Morganza Floodway. Opening it halfway would inundate a swath of central Louisiana along the Atchafalaya River with 5 feet to 20 feet of water.
A decision to open the floodway may result in three million acres of land ending up under water, Governor Bobby Jindal said today at a press conference in Baton Rouge. About 2,500 people may be affected inside the floodway and another 22,500 by backwater flooding, he said. A decision may come as soon as May 14, he said.
“The trigger is 1.5 million cubic feet of water a second going past the Red River Landing,” Jindal said. “We are at approximately 1.36 cubic million right now.”
The opening of the spillway also would affect two refineries, his office said yesterday. One of the plants, on the Mississippi River, could have capacity cut to 75 percent for two weeks, according to the state’s Department of Natural Resources. Anna Dearmon, the DNR’s communications director, said she couldn’t release the names of the refineries because of security reasons.
Alon USA Energy Inc.’s Krotz Springs refinery will be affected if the spillway is opened, Lisa Vidrine, director of the St. Landry Parish office of emergency preparedness, said today in a telephone interview.
Refinery officials said in a meeting late yesterday they were doing engineering work on the possible construction of a levee to protect the refinery, according to Vidrine.
On the Mississippi between New Orleans and Baton Rouge, there are 11 refineries with a combined capacity of 2.5 million barrels a day, or 13 percent of U.S. output, Andy Lipow, president of Lipow Oil Associates LLC in Houston, said yesterday.
Royal Dutch Shell Plc will supply plants at Geismar and Norocol, Louisiana, by rail if the river prevents barges and ships from unloading, according to an e-mail statement from Alexandra Smith, a company spokeswoman.
Flooding stopped barge traffic on the Ohio River and north of Memphis on the Mississippi last week and has interrupted shipping south of the Tennessee city.
The Tennessee Valley Authority is facing a shortage in coal shipments at four units at its Gallatin power plant because high waters have closed a lock used to move barges up for unloading.
“The reserve at the plant is, say, 20 to 30 days of on-site coal reserves,” said Mike Bradley, a spokesman for the federally owned utility. “We expect the lock will reopen before those reserves are depleted.”
According to TVA’s website, the Gallatin plant consumes about 12,350 tons of coal daily.
The Mississippi and Ohio rivers are also major delivery systems for commodities and crops such as corn, soybeans and other crops grown along their banks.
“Tennessee hasn’t seen flooding like this in 75 years,” said Lee Maddox, a 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, he said.
“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.”
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