Business

From oil to wheat, floods choke Midwest operations

Barges ride the swollen Mississippi River near St. Louis.
Barges ride the swollen Mississippi River near St. Louis. The Associated Press

The worst flooding across the Midwest in four years is disrupting everything from oil to agriculture, forcing pipelines, terminals and grain elevators to close and killing off thousands of hogs.

Fifty miles of the Illinois River have been closed, according to the U.S. Coast Guard, as well as 81 miles of the Mississippi River in two segments.

The flooding is the worst since May 2011, when rising water on the Mississippi and its tributaries deluged cities, slowed barge traffic and threatened refinery and chemical operations. The current situation increases stockpiles of crude oil and may extend the price slide.

Hog producers in southern Illinois are calling other farmers, hoping to find extra barn space to relocate their pigs, said Jennifer Tirey, executive director of the Illinois Pork Producers Association. Processors are sending additional trucks out to retrieve market-ready pigs, she said. In one case, an overflowing creek took out electricity and made roads impassable, causing 2,000 pigs to drown.

“There was no way to get the pigs out,” Tirey said. “Honestly, it was just an act of God. That creek had so much rain.”

So far, the biggest oil shutdown involves Enbridge Inc.’s Ozark pipeline, which was set to carry about 200,000 barrels a day in December to Wood River, Ill., from Cushing, Okla. The outage of the section under the Mississippi River is out of service.

“The closure of the Ozark pipeline will just add to the stocks at Cushing,” said Amrita Sen, chief oil economist at Energy Aspects Ltd. in London.

Spectra Energy Corp. shut the 145,000 barrels-a-day Platte oil pipeline between Guernsey, Wy., and Wood River as a precaution because of the river’s condition, the company said.

On Wednesday, Ameren began ferrying employees to and from its Sioux Energy Center north of St. Louis. The coal-fired power plant is still operational and workers will continue to travel by boat until the floodwaters recede, the company said.

Kinder Morgan Inc. shut its Cahokia terminal in Sauget, Ill., and its Cora terminal in Rockwood, Ill., company spokesman Richard Wheatley said. Cahokia handles chemicals, coal, cement and metals while Cora handles coal and petcoke, according to the company’s website. Kinder Morgan declared a force majeure, which protects it from liability for contracts that go unfulfilled for reasons beyond its control.

Exxon Mobil Corp. is shutting a fuel terminal on the Mississippi River at Memphis “in anticipation of severe weather,” spokesman Todd Spitler said.

Barge operators shipping grain took advantage of early forecasts for the heavy rain and flooding to transport loads before Christmas to ports in New Orleans, where there’s “adequate inventory,” said Wes Traina, logistics manager for Zen-Noh Grain Corp. in Convent, La. Still, high water may continue to slow shipping and loading throughout January, he added.

“The biggest concern from the high waters and fast currents will be from barges hitting a bridge and breaking apart,” Traina said. “It’s inevitable that accidents will occur.”

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