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St. Bernard Parish residents fill up their cars and gas cans as the Louisiana coast prepares for the arrival of Hurricane Ida on Friday, Aug. 27, 2021 in New Orleans.
Chris Granger | The Times-Picayune | The New Orleans Advocate via AP

Hurricane Ida temporarily shut down a critical swath of U.S. oil production and refining operations, and that should keep crude and retail gasoline prices at already elevated levels.

Now a tropical storm, Ida swept across the Gulf of Mexico production area before slamming into the Louisiana coast Sunday as a Category 4 storm, bringing torrents of rain, high winds and high tides. More than 1 million Louisiana utility customers were without power early Monday.

The energy industry was working Monday to assess when it could restore refining operations across Louisiana and oil and gas production in the Gulf of Mexico, taken off line as a precautionary measure.

Oil prices were slightly higher Monday, but off their early peak, after jumping 10% last week. However, West Texas Intermediate futures, trading at about $69 Monday, are still down over 6.5% for the month. Nearly all Gulf of Mexico oil production was shut in, accounting for about 15% of the U.S. total.

“The reaction is mixed because we avoided the worst-case scenario,” said John Kilduff, partner with Again Capital. “But supplies are tight, and that could impact prices, especially since we are moving into the peak period for storms, and weather worries are going to persist around the market for the next several weeks. As for supply, the cupboard was kind of bare going into this.”

The shut in operations in the Gulf of Mexico should resume to normal if no damage is found. The hit to supplies from the hurricane comes as OPEC+ meets this week.

OPEC+ is widely expected to restore the 400,000 barrels a day of production it had previously committed to return to the market. The Biden administration had asked Saudi Arabia and OPEC for more supply to be restored.

But the cartel and its associates, like Russia, are expected to restore only the planned amount of oil to the market. “They’re not coming to rescue us from $70 oil,” said Kilduff.

Crude inventories are at the lowest level since January 2020. In data reported last week, crude supply fell for a third straight week while fuel demand rose to the highest level since March 2020, according to the Energy Information Administration.

Price impact for Labor Day

Gasoline supplies could also be impacted temporarily by Ida, with refineries shut down across the region. The Colonial Pipeline, a key artery transporting gasoline from Houston, across the South and up to the Northeast, was partially shut down. The pipeline expects to resume service once the system is assessed. Terminals continued to distribute gasoline.

“The consumer should not expect gasoline prices are going to go down this week,” said Andrew Lipow, president of Lipow Oil Associates. Analysts expect gasoline prices to rise 5 cents to 10 cents per gallon by the Labor Day weekend for some consumers, particularly in the southern and eastern U.S.

The average national price for unleaded gasoline was $3.15 per gallon Monday, down a penny from a week ago, according to AAA. The price is the highest for a Labor Day weekend in seven years and up sharply from the $2.23 per gallon price at this time last year.

It’s unclear when refining operations will be restored to normal, since it may be difficult to move personnel back to the impacted area.

“Pretty much everything in Baton Rouge, New Orleans area is shut down, representing 12.5% of the nation’s refining capacity,” said Lipow.

Lipow said ExxonMobil is currently shutting down its entire refining operation in Baton Rouge, responsible for 540,000 barrels a day. Two other refineries in Mississippi remain in operation, but the area is under tornado and flood watch, he said. ExxonMobil said its Baton Rouge refinery was not harmed but it is shutting down operations to stabilize them.

Kinder Morgan’s Plantation pipeline, which also takes gasoline across the southeast, was operating Monday, but its Baton Rouge terminal was without power. Lipow said Plantation transports gasoline from Louisiana refineries, while Colonial also receives oil from Texas refineries.

“No facilities, as far as we hear now, appear to have any serious physical damage, which is good news for consumers,” said Kilduff. But the industry is watching to see how soon operations will be restored and whether refineries will be impacted by power outages.

“The electrical situation is the big unknown right now,” said Kilduff. If refineries are impacted, that could mean gasoline prices would rise even more.

Gasoline demand in the U.S. was a strong 9.57 million barrels a day, the Energy Department reported in its most recent weekly data. Weekly refined product demand reached another post pandemic high and a level not seen since August 2019, according to TortoiseEcofin. The top three weekly demand readings for gasoline have been in the last several weeks, it said.

“This holiday weekend, there could be epic gasoline demand if trends hold up,” said Kilduff.

Memories of Katrina

At the same time, the shutdown of economic activity, due to Ida, has resulted in a loss of demand for oil. Tom Kloza, head of global energy research at Oil Price Information Service, said he expects the loss of Gulf of Mexico production to have little impact.

“The demand destruction from Ida is probably a little bit more significant than the lost production that will accrue from the Gulf of Mexico,” he said.

Analysts said the impact of Ida on energy prices was nothing like that of Katrina, which made landfall in Louisiana 16 years ago to the day.

“The storm may draw similarities from a geographical perspective, but the sequel has a less than similar impact on the energy markets than Katrina did,” wrote Michael Tran, commodities strategist at RBC. “In fact, historical rules of thumb have changed. Hurricanes are no longer bullish for oil prices. In fact, storms can actually have longer lasting, medium- term bearish ramifications.”

At the time, the U.S. produced just 5.2 million barrels a day, and the Gulf was responsible for 1.3 million barrels a day, compared to 1.6 million barrels a day.

“Hurricane Katrina devastated offshore oil production in the US Gulf Coast in 2005, prior to the shale revolution when offshore production comprised a much larger portion (nearly 25%) of total US output,” Tran noted.

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Tesla jumped the gun, Nissan drivers will have to wait a bit for Supercharger access

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Tesla jumped the gun, Nissan drivers will have to wait a bit for Supercharger access

It sounds like Tesla jumped the gun when announcing that Nissan drivers now have access to the Supercharger network in North America.

They will have to wait a bit.

Yesterday, we reported that Tesla added Nissan to the list of automakers with EVs capable of using the Supercharger network in North America.

However, Tesla has since removed Nissan from its list of automakers with access and switched the Japanese automaker back to the “coming soon” list.

Nissan confirmed to Electrek that access is not currently available, but it will be available by the end of the year.

It sounds like a miscommunication on Tesla’s side. We hear that it should be coming soon.

Elon Musk fired Tesla’s entire charging team – seemingly to make an example of its then-head of charging, Rebecca Tinucci, who reportedly disagreed with Musk about making further layoffs following another layoff wave.

Instead of just firing her, Musk decided to fire the entire team and then sent an email to other Tesla managers using the charging team situation as a warning.

Tesla has since had to rehire several former members of its charging team to rebuild the department.

This is believed to have slowed down the opening of the Supercharger network to other automakers in North America. We were told that communications with Tesla’s charging team were difficult to non-existent for those automakers for weeks earlier this year.

As we have previously reported, the situation has definitely slowed down Tesla’s own deployment of Supercharger stations.

Nonetheless, the Supercharger network recently hit the milestone of 60,000 chargers worldwide.

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Northvolt files for bankruptcy, CEO quits

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Northvolt files for bankruptcy, CEO quits

Europe’s “green dream” Northvolt has filed for bankruptcy protection in the US after a rescue package failed to go through, leaving the battery maker with just one week’s worth of cash in the account. Cofounder and CEO Peter Carlsson, who spearheaded a costly expansion, has also quit.

The Swedish-owned battery maker filed for Chapter 11 in the Southern District of Texas, reports Bloomberg, with $5.8 billion debt. CEO Peter Carlsson, Telsa’s former chief products officer, stepped down from his role as CEO after the filing, but will remain onboard as advisor and director.

According to a statement, Northvolt said that its main factory will maintain business as usual during the reorganization, as the company now has a buffer from creditors, giving it time to restructure the balance sheet. However, the company said that this will not impact its business in Germany, and through the court process, Northvolt now has access to about $145 million in cash collateral. An additional $100 million in debtor-in-possession financing will be added to the pot via one of its customers, the report said.

In recent weeks, Northvolt has been in intense negotiations in the hope of securing a $300 million rescue package to give the company a bit more time to seek longer-term funding. But when that deal fell through, the battery maker was forced to seek protection from creditors via the Chapter 11 filing.  

The company still has a $7 billion project in place in Quebec – a new campus that is set to include a cell production plant, battery recycling, and cathode active-material production facilities –  and the bankruptcy won’t affect those plans, the company said on its website. “Northvolt Germany and Northvolt North America, subsidiaries of Northvolt AB with projects in Germany and Canada, are financed separately and will continue to operate as usual outside of the Chapter 11 process as key parts of Northvolt’s strategic positioning.”

The plant is expected to have capacity to produce 30 GWh of battery cell every year, with an expansion set to double that output, making it enough to power 1 million EVs. The Canadian government is putting $1.334 billion CND toward the project, with Quebec chipping in another $1.37 billion CND.

Northvolt has hit hard times in recent months, once thought of as Europe’s best shot to homegrown EVs and the makers of “the world’s greenest battery.” Enthusiasm mounted as the company opened the doors to its first plant in Sweden, in the small town of Skelleftea near the Arctic Circle, in 2021. Billions of dollars have been invested into the company, and Volvo, VW, and BMW rushed to place future orders.

All of this enthusiasm has been fueled by a vision to cut dependency on China by creating greener EV batteries using 100 percent recycled nickel, manganese, and cobalt. Plans were put in place to build factories in Gothenburg, in southern Sweden, and Poland, Germany, and Canada, all backed by huge government subsidies. Back in January, the company raised an additional $5 billion, firmly locking in its position as one of Europe’s best-funded startups and recipient of the largest-ever green loan in the EU.

But then things started going south, with Northvolt’s production problems and massive delays forcing BMW to cancel its €2 billion battery cell order with the company. This past May, Northvolt also announced that it pushing back its plans for an IPO until next year. The interim report that followed revealed the dire state of its finances and how far its production had fallen short of goals, with Carlsson admitting he had been “too aggressive” with the company’s expansion plan.

Since Northvolt has put in place a series of changes to reset the company’s course, including bringing onboard a new CFO, leaving the former CFO to focus solely on expansion plans. Plus the company started making cuts, including closing down its research center, Cuberg, in San Francisco and deprioritizing secondary businesses. At the end of September, Northvolt announced that it would cut 1,600 staff from three Swedish sites and about 20 percent of its international workforce.

Last month, Volvo started proceedings to take over their joint venture with Northvolt, while Volkswagen Group’s representative to Northvolt’s board stepped down this month. Sweden, for its part, is ruling out taking a stake to save its homegrown enterprise, Bloomberg reports. Carlsson had said last month that the company needs more than $900 million to permanently shore up its finances.

Photo credit: Northvolt


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YMX Logistics deploys 20 new Orange EV electric yard trucks

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YMX Logistics deploys 20 new Orange EV electric yard trucks

Leading yard operation 3PL YMX Logistics has announced plans to deploy fully twenty (20) of Orange EV’s fully electric Class 8 terminal trucks at a number of distribution and manufacturing sites across North America.

As the shipping and logistics industries increasingly move to embrace electrification, yard operations have proven to be an almost ideal use case for EVs, enabling companies like Orange EV, which specialize in yard hostlers or terminal tractors, to drive real, impactful change. To that end, companies like YMX are partnering with Orange EV.

“This relationship between YMX and Orange EV is a significant step forward in transforming yard operations across North America,” said Matt Yearling, CEO of YMX Logistics. “Besides the initial benefits of reduction in emissions and carbon footprint, our customers are also seeing improvements in the overall operational efficiency and seeking to expand. Our team members have also been sharing positive feedback about their new equipment and highlighting the positive impact on their health and day-to-day activities.”

This Orange looks good in blue

YMX Logistics electric yard trucks; by Orange EV.

One of the most interesting aspects of this story – beyond the Orange EV HUSK-e XP’s almost unbelievable 180,000 lb. GCWR spec. – is that this isn’t a story about California’s ports, which mandate EVs. Instead, YMX is truly deploying these trucks throughout the country, with at least four currently in Chicago (and more on the way).

“Our collaboration with YMX Logistics represents a powerful stride in delivering sustainable yard solutions at scale for enterprise customers,” explains Wayne Mathisen, CEO of Orange EV. “With rising demand for electric yard trucks, our joint efforts ensure that more companies can access the environmental, financial, and operational benefits of electrification … this is a win for the planet, the workforce, and the bottom line of these organizations.”

We interviewed Orange EV founder Kurt Neutgens on The Heavy Equipment Podcast a few months back, but if you’re not familiar with these purpose-built trucks, it’s worth a listen.

HEP-isode 26

SOURCE | IMAGES: YMX Logistics.

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