Weekly News Summary For July 14-20, 2008:
(Editor’s note: This is Part 2 of a series of articles by Tom Gladders, former president of Gladders Towing Company, on the impact of high fuel prices on the marine industry.)
If one looks at a graph depicting the cost of crude oil and diesel fuel, the two lines move virtually in lock step. Although minor differences may exist due to refinery outages, regional distribution issues, seasonality and other factors, we can expect for certain that increases or decreases in the price of crude are very quickly reflected in wholesale and retail prices.
Historically, oil has always been priced in U.S. dollars, wherever the sellers and buyers may be located. Until recent years, the U.S. dollar was the world’s most stable and prized currency. As any observer of world currency markets will know, however, the U.S. dollar has fallen drastically against almost all foreign currencies.
In 2002, the euro replaced, on a phased̵in basis, most of the western European currencies. At the time it was issued, the euro was priced at .86 U.S. dollars—put another way, the dollar was worth 1.16 euros. As recently as mid 2003, the dollar was worth .92 euros, while today it is worth around .64 euros, a dramatic difference. The fall in the value of the U.S. dollar has been influenced by the low interest rates in the U.S., thanks to the Federal Reserve bailing out major Wall Street investment firms.
The decreased value of the dollar has led producing countries to push up the dollar–denominated crude oil they are selling. They obviously want to maintain parity in the purchasing power of their oil production ….
A wetter–than–normal spring has dramatically changed the picture for the Corps of Engineers’ operations of the upper Missouri River reservoirs. Water levels in the six big reservoirs have risen by nine to 12 feet since April 1, the Corps reported last week.
The rise was due to a combination of a normal snowpack in the mountains, followed by rain over much of the upper basin, and flooding in the lower basin, which allowed the Corps to sharply reduce the amount of water reduced from the reservoirs.
“The heavy rain in June pushed the Missouri River over flood stage in a 600-mile reach of the lower river,” said Larry Cieslik, chief of the Corps’ Water Management office in Omaha, Neb. “Releases from the reservoirs have been drastically reduced to help lower river stages downstream.”
The releases averaged a record low 12,000 cubic feet per second (cfs.) in June, half the normal 25,000 cfs. The previous low was 16,700 cfs. in 1984, the Corps said ….
After declaring an “extreme public emergency,” the commissioners at the Port of New Orleans were able to work quickly through the bid process to secure a contract to repair damage to the Napoleon Avenue wharf.
The pilot who was docking the MSC Turchia on June 2 reported he believed the ship hit a mud lump and caused it to veer as it was approaching the dock. Instead of landing flat on the fendering, the bow of the ship landed first, causing damage to the fender pilings and load–bearing pilings under the dock surface.
Chris Bonura, the port’s manager of corporate communications, said the mud lump was probably caused by the recent high waters on the Mississippi River.
“The location was regularly surveyed by the Corps of Engineers before the incident and the depth was fine,” he told The Waterways Journal. “But these areas can shoal up quickly during high water.”
The Corps conducts daily surveys of water depths on the Lower Mississippi River because of the propensity of shoaling, particularly during high–water events.
The location of the mud lump was more than 100 feet from the face of the dock but not in the recognized channel. The port is required to dredge from the dock out 100 feet, Bonura explained. The Corps is responsible for maintaining the channel depth ….
Louisiana Gov. Bobby Jindal signed into law a bill creating the Louisiana International Deep Water Gulf Transfer Terminal Authority on July 7.
The Port Authority will have jurisdiction over a piece of state property in Plaquemines Parish near the Southwest Pass of the Mississippi River. The parish itself is not a partner of the new authority.
The bill, SB 780, was authored by Louisiana Sen. A.G. Crowe, who has been promoting a deep–water container port at the location as a way of growing the area’s port capacity. Studies of the port’s feasibility await further funding ….
The phrase “fuel-eating bugs” brings to mind, for most of us, a few highly—publicized occasions when oil-eating bacteria have helped clean up oil spills.
But for transportation companies that run on diesel, the associations are less benign. Bacteria that feed on diesel can clog fuel filters and intake valves, reduce fuel efficiency, and even corrode steel over time. One company calls them “diesel algae.” A build–up of fuel–eating bacteria can be visible as a corrosive slime or sludge.
But companies have responded with fuel treatment biocides that fight what one company calls “HUM-bugs” (the HUM stands for Hydrocarbon Utilizing Mirco-organisms).
“These HUM–Bugs are only microscopic in size, but cause serious harm,” says Rick Richardson. He is vice president of the Hammonds Companies Inc., a diversified company that includes a leading fuel biocide, Biobor, among its more successful products.
Richardson says more than 250 different microorganisms can live and even thrive in the water bottoms of fuel tanks. Fewer than a dozen of these actually feed on the fuel; the rest live in the interface between fuel and water. But those few produce acid wastes that can corrode fuel tanks and pipes, and increase wear on engine components ….
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