Ethanol Shipments Delayed in U.S. as Ice Slows Rail and TruckLucia Kassai and Mario Parker
Ethanol shipments in the U.S. are facing bottlenecks as railroads perform maintenance after a winter storm froze tracks.
The wintry weather that blanketed the Midwest to the Northeast has slowed movement of the biofuel by rail and truck. Deliveries by rail are taking twice as long, according to Eco-Energy Inc., which has distribution terminals in the U.S. Midwest and East Coast, and Green Plains Renewable Energy Inc. said that the weather affected its operations supplying in the midwest and southeastern U.S.
“It’s a very challenging environment,” said Chad Conn, vice president of operations for Eco-Energy in Franklin, Tennessee, in a telephone interview. “You have severe weather, maintenance at railroads and congestion because you have more commodities on the rail.”
About 70 percent of ethanol in the U.S. is transported by rail, according to the Association of American Railroads.
“It’s affected us some,” said Jim Stark, an Omaha, Nebraska-based spokesman for Green Plains. “Trucks are having a tough time and rail’s been delayed. Things are returning to normal, but it’s not quite there yet.”
Denatured ethanol for February delivery fell 1.4 cents to $1.899 a gallon at 1:14 p.m. New York time on the Chicago Board of Trade. Prices have dropped 15 percent in the past year.
Ethanol is blended with gasoline as part of government biofuel mandates and to boost octane. Distilleries are concentrated in the corn-rich Midwest.
Kinder Morgan Inc. said yesterday that it lifted force majeure at its Chicago and Argo, Illinois, ethanol terminals as the frigid air subsided.
Union Pacific Corp., BNSF Railway Co. and Norfolk Southern Corp. were among railroads that warned customers earlier this week to expect delays.
Eco-Energy trades, transport and distributes ethanol in North America. The company handles about 10 percent of the biofuels market in North America, according to its website.