Sylvie Willis
Despite reports of a diesel fuel shortage in the United States, experts say that the country will not run out of diesel fuel anytime soon. As of October 28, 2022, the U.S. had 25.8 days' worth of diesel in its stores, according to the Energy Information Administration (EIA). While this is a lower supply than in previous weeks, it does not indicate an imminent outage. However, low stockpiles have led to higher diesel fuel prices, particularly in the Northeast, and short-term regional shortages may occur. As of November 2022, governors of states including South Dakota, Iowa, and Nebraska have issued emergency waivers for transporting fuel.
| Characteristics | Values |
|---|---|
| Date of data | 28 October 2022 |
| Number of days' worth of diesel in the US | 25.8 days |
| Number of days' worth of diesel in the Northeast | Less than 25 days |
| Number of days' worth of diesel usually | 33 days |
| States with the most acute shortages | Seven states in the Southeast |
| States with the highest cancer risk from diesel pollution | California, New Jersey, and New York |
| States with the lowest cancer risk from diesel pollution | Wyoming, Montana, and Oregon |
| States with waivers for hours-of-service rules for truckers transporting fuel | South Dakota, Iowa, and Nebraska |
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What You'll Learn
The US will not run out of diesel fuel
As of 28 October 2022, the United States had 25.8 days' worth of diesel in its stores, according to the US Energy Information Administration (EIA). This figure, along with still-high fuel prices domestically and a potential energy crisis in Europe, has led some social media users to claim that the US will run out of diesel fuel in less than a month.
However, experts have confirmed that the US will not run out of diesel fuel. While the supply is low by historical standards, it typically averages around 30 days. The 25-day supply figure does not account for ongoing diesel production or the oil that is imported or produced by refineries, which refill supply. University of Houston energy lecturer Ed Hirs compared this statistic to a grocery store carrying a week of milk, stating that supply is always being replenished.
The president of Lipow Oil Associates, Andrew Lipow, also asserted that the US will not run out of diesel in 25 days. He stated that this would only occur if the country stopped producing or importing diesel and drew down its inventory. Patrick De Haan, head of petroleum analysis at GasBuddy, agreed, explaining that the 25-day supply figure is used as an industry benchmark to assess overall supply and demand balances. While demand is currently eclipsing supply, leading to higher prices, it does not indicate imminent outages.
While it is possible that some short-term regional shortages could occur, the fuel supply chain is dynamic, and suppliers will work to fill in any gaps. Governments can also intervene to help expedite the transport of fuel, as seen with emergency waivers issued by the governors of South Dakota, Iowa, and Nebraska. Therefore, while diesel fuel supply in the US is tight, it is unlikely that the country will run out completely.
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Diesel fuel shortages in the Southeast
The U.S. Energy Information Administration reported that diesel fuel inventories on the East Coast were 45% below the 5-year average at the end of October 2022. This has resulted in a diesel fuel shortage in the Southeast, particularly in North Carolina, South Carolina, Virginia, Tennessee, Georgia, Alabama, and Maryland. Carriers are having to visit multiple terminals to find diesel fuel, causing delivery delays and straining local trucking capacity.
The diesel fuel shortage in the Southeast has led to higher prices for fuel and everyday goods. The retail diesel price for the third quarter of 2022 averaged $5.16 per gallon, with estimates of $4.86 per gallon in the fourth quarter. On-highway diesel prices in the lower Atlantic region reached $5.18 per gallon in the week of October 29, 2022, an increase of nearly 40 cents since September 19.
The fuel supply company, Mansfield Energy, issued a Code Red alert for the Southeast, requiring a 72-hour notice for fuel deliveries to ensure fuel and freight can be secured at economical levels. Mansfield Energy noted that conditions are "'rapidly devolving,' with economics changing significantly daily. The company also reported that diesel prices had risen to $4.50 that week, the highest since June.
While there is no imminent threat of a nationwide diesel fuel shortage in the U.S., some cities may experience temporary outages or delays. Experts attribute the low diesel fuel inventories and high prices to a combination of factors, including high demand, low refinery output, and competition from fuel oil for home heating in the winter.
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Diesel prices are increasing
As of 28 October 2022, the United States had 25.8 days' worth of diesel in its stores, according to the Energy Information Administration (EIA). This figure, along with still-high fuel prices domestically and a potential energy crisis in Europe, led some social media users to suggest that the US would run out of diesel in less than a month. However, experts have confirmed that the US will not run out of diesel fuel.
Despite this, low stockpiles of distillate fuels (diesel fuel and heating oil) have resulted in higher diesel prices. On a typical day, East Coast markets have 50 million barrels in storage, but currently, there are fewer than 25 million barrels available. Diesel prices are averaging more than $1.50 higher than gasoline at the pump, and many expect the price of diesel to increase further.
The situation is particularly challenging in the Southeast, where the most acute shortages are concentrated. Mansfield Energy has identified seven states that will be hit the hardest by diesel shortages, and they have been given an Alert Level 4 to address market volatility. The entire Southeast has been moved to Code Red, which requires a 72-hour notice for fuel deliveries to ensure economical fuel and freight security.
While there may be occasional short-term regional shortages, the fuel supply chain is dynamic, and suppliers will work to fill in any gaps. Some regions, like the Northeast and Mid-Atlantic, could experience tighter supply, but outages in individual stations are not indicative of broader shortages. The high diesel prices are driven by low distillate stockpiles and higher demand.
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Fuel supply chains are dynamic
The US had about a 25-day supply of diesel as of October 28, 2022, according to the Energy Information Administration (EIA). This data sparked concerns on social media about an impending diesel shortage, but experts clarified that it does not account for imported oil or refinery production. The low stockpiles of distillate fuels, including diesel, have resulted in higher diesel prices, especially in the Northeast, where stocks are the lowest.
The dynamic nature of the fuel supply chain is further influenced by global events, such as the conflict between Russia and Ukraine, which has led to sanctions on Russian petrochemical products and subsequent market price increases. The supply chain disruptions have also impacted the availability of raw materials, affecting production processes. As a result, supply chains may need to be reconfigured around alternative supply points, such as increased output from American drillers and other key producers like OPEC countries.
The rising energy prices due to global disruptions have also encouraged the exploration of cheaper options and sustainable energy offerings. For example, US fracking production will increase, leading to greater volumes of Liquefied Natural Gas (LNG) being shipped to Europe. Additionally, the search for cost-effective alternatives includes liquefied natural gas in Qatar and the Gulf of Mexico and sustainable energy from offshore wind farms and solar energy parks.
The dynamic fuel supply chain is also influenced by policies regulating carbon emissions. For instance, VCER (in Europe and the US) and DCP (in China) are central policies impacting the fuel consumption reduction and carbon emission strategies of manufacturers and suppliers. These policies have implications for the production of fuel vehicles and the exploration of new energy vehicle markets.
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Diesel pollution is a health risk
While the US has not run out of diesel fuel, there have been reports of low stockpiles, which have resulted in higher diesel fuel prices. As of 28 October 2022, the US had 25.8 days' worth of diesel in its stores, according to the EIA. This has led to concerns about a potential diesel shortage. However, experts have clarified that the US will not run out of diesel fuel, and the low stockpiles are due to a misunderstanding of EIA data, which does not account for imported oil or refinery production.
Despite this, diesel pollution poses a significant health risk to the public. Diesel engines emit a complex mixture of air pollutants, including gaseous and solid material. The solid material in diesel exhaust is known as diesel particulate matter (DPM), which is composed of carbon particles ("soot" or black carbon) and numerous organic compounds, including over 40 known carcinogens. Exposure to DPM can lead to asthma, respiratory illnesses, and can worsen existing heart and lung diseases, especially in children and the elderly. It is estimated that about 70% of the total known cancer risk related to air toxics in California is attributable to DPM, increasing the statewide cancer risk by 520 cancers per million residents exposed over a lifetime.
Additionally, diesel exhaust contains fine particles, nitrogen oxides, and other pollutants. In warm weather, nitrogen oxides can react with other pollutants to form harmful ground-level ozone, which aggressively attacks lung tissue and damages people's health. Breathing ground-level ozone can lead to coughing, throat, and chest irritation, and high levels can irritate the respiratory system.
To address these health risks, the EPA has implemented regulations to reduce diesel emissions, and the Diesel Emissions Reduction Act (DERA) provides funding for projects that use verified or certified diesel emission reduction technologies. The American Recovery and Reinvestment Act of 2009 provided $300 million for national and state programs to implement these technologies, and DERA was reauthorized in 2020 for up to $100 million annually through 2024. These efforts aim to reduce the health risks associated with diesel pollution and improve air quality for the public.
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Frequently asked questions
No, the US is not running out of diesel fuel, according to experts. While stockpiles are low, causing higher prices, the country will not run out of diesel fuel imminently.
The Southeast is facing the most acute diesel shortages, while the Northeast is experiencing high prices. Mansfield Energy identified seven states that will be hit the hardest, with an Alert Level 4, while the entire Southeast was moved to Code Red.
Low distillate stockpiles and higher demand have led to higher diesel prices. The Northeast is particularly affected as diesel faces competition from fuel oil for home heating in winter.
Yes, diesel prices are expected to increase further. Diesel prices are already averaging more than $1.50 higher than gasoline, and with low stockpiles, prices will continue to rise.
