The US drought

As Mississippi water levels decrease, Obama asked to declare emergency

Bizjournals,

29 November, 2012

If barge flow is lessened along the nation's busiest waterway on the Mississippi River, it could spell economic disaster and that's why shippers and legislators are pushing President Obama to declare a federal emergency.

Bloomberg reports the U.S. Chamber of Commerce and the National Association of Manufacturers are among those asking the president to speed up rock removal in Cairo, Ill., that could affect barge traffic with low water levels. The group is also asking the U.S. Army Corps of Engineersto halt its annual restriction of the Missouri River's flow.

Mississippi River barge traffic has slowed due to the worst drought in fifty years and a seasonal dry period that has left levels at a near all-time low, according to the report.

Barges contain nearly 60 percent of the country's grain exports in addition to 22 percent of its petroleum and 20 percent of its coal on the Mississippi.

Drought-Parched Mississippi River Is Halting Barges

Mississippi River barge traffic is slowing as the worst drought in five decades combines with a seasonal dry period to push water levels to a near-record low, prompting shippers to seek alternatives.

Bloomberg,

28 November, 2012

River vessels are cutting loads on the nation’s busiest waterway while railroads sign up new business and the U.S. Army Corps of Engineers draws criticism from lawmakers over its management of the river, which could be shut to cargo from companies including Archer-Daniels-Midland Co. (ADM) next month.

“Our shippers are looking at alternate modes of transportation,” said Marty Hettel, senior manager of bulk sales for AEP River Operations, the barge unit of American Electric Power Co. (AEP), a utility owner based in Columbus, Ohio. “If you’re shipping raw materials to a steel mill in Chicago, you’re trying to figure out if you can go to Cincinnati or Louisville, Kentucky, unload it out of the barge and rail it up to the steel mill.”

The worst U.S. drought since 1956, which dried farmland from Ohio to Nebraska, will last at least through February in most areas, according to the U.S. Climate Prediction Center in College Park, Maryland. Barges on the Mississippi handle about 60 percent of the nation’s grain exports entering the Gulf of Mexico through New Orleans, as well as 22 percent of its petroleum and 20 percent of its coal.

‘Economic Catastrophe’’

Barge, shipping and business organizations including the National Association of Manufacturers, the U.S. Chamber of Commerce and the American Petroleum Institute in a letter today urged President Barack Obama to declare an emergency in the region, calling for “immediate assistance in averting an economic catastrophe in the heartland” of the U.S.

Jay Carney, the White House spokesman, said the administration has sought drought relief for farmers, and today referred questions about the request to the Corps of Engineers

Senator Tom Harkin, an Iowa Democrat, also said Obama must act. “We need action to increase water flow from the Missouri River into the Mississippi,” Harkin said in an e-mail. “We also need to take immediate steps to enable the destruction of rock formations under the Mississippi River, which will allow navigation with less water.”

Mississippi water levels may drop to an historic low next month. The waterway is falling in part because of the U.S. Army Corps of Engineers, which last week started reducing outflows from the Missouri River as part of an annual operating plan to ensure regions further north have adequate water.

Shallow Water

That may help make the Mississippi too shallow to navigate by Dec. 10 from St. Louis south about 180 miles (290 kilometers) to Cairo, Illinois, where the Mississippi meets the Ohio River, according to the American Waterways Operators and Waterways Council Inc., a trade group based in Arlington, Virginia. About $7 billion worth of commodities usually travel on the Mississippi in December and January, according to the organization.

“It is imperative that the Corps review their actions to ensure they address this problem so it doesn’t impact waterborne commerce,” said Angela Graves, a spokeswoman for Marathon Petroleum Corp. (MPC), which operates a fleet of 180 barges and 15 tugboats to ship crude oil, transportation fuels and petroleum products on waterways, in a telephone interview.

December and January are historically the lowest times of year for the rivers because the fall season is usually dry and tributaries freeze, said Steve Buan, service coordination hydrologist at the U.S. North Central River Forecast Center in Chanhassen, Minnesota.

‘Ice Bite’

“That’s called the ice bite, the water gets made into ice and it can’t flow downstream,” Buan said.

The record low in St. Louis was minus-6.1 feet in January 1940, according to the National Weather Service. The river was at minus-1.49 feet at 1:30 p.m. on Nov. 26, and may drop to minus-5 or even minus-6 feet as measured by the river gauge in about two weeks if the weather doesn’t change and the Army Corps of Engineers drawdown of the Missouri River takes place as planned, Buan said.

About 8 million tons of grain, coal, steel, petroleum and other goods travel each month between St. Louis and Cairo, said Hettel, with AEP River Operations.

Shutting the river will increase transportation costs for shippers, he said. They’ll continue to pay full price for barges lightened to meet narrower depth restrictions. Only a few tugs are capable of operating with depth restrictions expected in December, he said.

Transport Options

Decatur, Illinois-based ADM, the largest U.S. grain processor, is “monitoring the situation closely and making arrangements for alternative transportation methods, in case they’re necessary,” said spokeswoman Jackie Anderson in an e- mail.

Enterprise Products Partners (EPD) LP is running Mississippi barges partly empty to cope with shallow water, spokesman Rick Rainey of the Houston-based pipeline company said yesterday in a telephone interview. Of its 200-vessel fleet, two barges that when fully loaded carry about 60,000 barrels, are operating on the Mississippi, Rainey said.

Rail shipments to export terminals in the week ending Nov. 14 were up 16 percent from the same period in 2011, according to the U.S. Department of Agriculture. Meanwhile, Mississippi River barge traffic south was down 29 percent and northbound shipping declined 8.9 percent from a year ago in the week that ended Nov. 17, according to the Army Corps of Engineers.

Trains Gain

Low water on the Mississippi means that Canadian National Railway Co., (CNR) based in Montreal, is “currently handling more business as a result of the situation while remaining focused on protecting its existing rail traffic base,” said company spokesman Mark Hallman.

Kansas City Southern (KSU) is “working with our customers to ensure that we are in a position to meet any increase in rail demand due to the reduction in river capacity,” said Bill Galligan, vice president for investor relations of the Kansas City, Missouri-based company, in an email.

“It will definitely be a positive for the rails,” said Lee Klaskow, a Skillman, New Jersey-based analyst for Bloomberg Industries research. Still, the changes in shipping costs may cause delays, he said. “It gets to the question, ‘Is the freight competitive with railroad?’” he said. “If it’s too expensive to ship, sometimes it makes sense for whoever’s shipping to wait it out.”

Disaster Request

Fifteen U.S. senators, 62 members of the House and the governors Illinois, Iowa and Missouri wrote the Corps asking it to delay water-reducing actions and and remove rocks that impede traffic. The Mississippi “is vital to commerce for agriculture and many other goods,” the lawmakers, including Senator Dick Durbin of Illinois, that chamber’s second-ranking Democrat, wrote.

The Army Corps is following the instructions of Congress that directed management of the Missouri River, which flows into the Mississippi at St. Louis, said Bob Anderson, a spokesman for the Army Corps in Vicksburg, Mississippi.

The federal Missouri River water-management plan can worsen the Mississippi’s situation as a result, Anderson said. The organization is “following the manual,” he said. The letter- writing lawmakers argue against that, saying their reading of law provides for more flexibility.

To mitigate its reduction of Missouri River flow, which started Nov. 23, the Corps started releasing water from Minnesota and Iowa on the upper Mississippi on Nov. 20. Still, the Mississippi may reach record lows, a disruption of traffic that may be unavoidable, he said.

“It’s not so much river management now as it is the extended drought,” he said. “We have nothing to work with. It’s gotten to the point where it’s going to become a problem with navigation.”

New York - battered supply lines

A Storm-Battered Supply Chain Threatens Holiday Shopping

The economic effects of Hurricane Sandy are reverberating beyond areas hit by the storm as businesses warn customers of delays, try to get merchandise out of closed ports and face canceled orders.

CNBC,

5 November, 2012

In addition to shutting down shipping terminals and submerging warehouses, the storm also tangled up deliveries because of downed power lines, closed roads and scarce gasoline in parts of New York and New Jersey.

The supply chain is backing up at a crucial time, just as retailers normally bring their final shipments into stores for the holiday shopping season, which retailers depend on for annual profitability.

“Things are slowing down,” said Chris Merritt, vice president for retail supply chain solutions at the trucking company Ryder. “This whole part of the supply chain is clogged up.”

FedEx, for example, has rented fuel tankers to supply its delivery trucks as commercial gas stations run dry. Ryder has been hunting down rental trucks to add capacity. CSX, the major railroad company, was continuing to advise customers to expect delays of at least 72 hours on shipments. And retailers ranging from Amazon to Diane von Furstenberg have told customers to expect delays on shipments.

Many economists expect the storm to shave up to half a percentage point from growth in the fourth quarter. That is a big reduction, with growth estimated to reach an annual rate of 1 to 2 percent before the storm, and the economy facing other significant headwinds, including fiscal uncertainty in Washington.

While economic losses from the storm are expected to be significantly lower than those from Hurricane Katrina in 2005, this storm’s impact has been intensified because the Northeast is densely populated.

The region is responsible for about $3 trillion in output, or roughly 20 percent of the country’s total gross domestic product, said Gregory Daco, a senior economist with IHS Global Insight. “Part of what was lost will be delayed, but part is lost forever,” Mr. Daco said.

Last week, the Port Authority of New York and New Jersey reported that all of its major marine terminals were closed by the storm. While parts of the system have started to reopen, delays persist. The New York area’s port system is the largest on the East Coast, and the third largest in the nation. Last year, it handled $208 billion in cargo.

As a result of the closings, delays may ripple through the holiday season, according to Paul Tsui, chairman of the Hong Kong Association of Freight Forwarding and Logistics. As of Sunday, almost all rail service from the ports was suspended, terminals were damaged and much of the ports’ equipment was being reviewed to see if it still worked.

Several customers with facilities in the New York area told him “their warehouses are totally damaged, and presume the merchandise inside will have to be reported lost to insurance companies,” Mr. Tsui said.

“We are now coming into the cutoff for seasonal orders for the Thanksgiving and Christmas holidays,” he added, and companies that missed shipment deadlines must either send products by expensive air freight, pay a penalty to retailers for late shipments or face canceled orders.

Mr. Merritt of Ryder said he expected that some items that have already been advertised for sales on the day after Thanksgiving — traditionally the busiest shopping day of the year — would not get to stores in time.

The delays are hitting smaller merchants like Robert Van Sickle particularly hard.

His pet supply company, Polka Dog Bakery, was relying on a shipment of cardboard tubes from China with a merry design, intended to hold popular holiday dog treats. The products represent about 15 percent of sales at the company. But the New York Container Terminal in Staten Island, where the tubes arrived shortly before the storm, was devastated, and Mr. Van Sickle’s freight forwarder has been unable to track down the containers.

It is too late to reorder the tubes from China in time for the holidays, and Mr. Van Sickle has tens of thousands of baked dog treats piled up at his Boston headquarters. Insurance will cover the cost of the cardboard tubes, but not the finished products, and those payments will not come close to making up for lost revenue.

Last week, he was forced to call customers like L.L. Bean and tell them he probably could not fulfill their orders. “Without this product, we’re in trouble,” Mr. Van Sickle said. “I am a business owner and this is pretty much my year.”

In Cape May, N.J., Rich Layton’s six-week-old start-up, Layton Sports Cards, was supposed to be shipping sports card orders all week. But his apartment partially flooded, his Allentown distributor could not find clear roads to get to him, and U.P.S. held his other deliveries during the storm.

“It’s thousands of dollars worth of cards that people were already paying for,” Mr. Layton said.

As the days passed, Mr. Layton spent $1,000 on cards at a local shop, and gave most of them away on a live webcam feed to try to pacify customers. “It pushed my entire business back five days, and I’ve been begging and pleading with my customers to please be understanding,” he said. He ordered replacement cards on Friday, paying $170 for overnight delivery so he could start distributing them to customers.

Wayfair.com, an online home-goods retailer, said about 1,300 of its 4,000 suppliers were hit by everything from loss of power to flooding. Niraj Shah, Wayfair’s chief executive, said his site adjusted, removing two-day shipping offers for affected products and taking some merchandise off the site.

For suppliers who cannot get up and running soon, Mr. Shah said, “at this point, it is too late to get more inventory in for the holidays. If inventory’s gotten ruined because of flooding or they’re closed for two weeks, to be honest, it’s a tough time of year for that.”

Retailers are facing smaller headaches, too. At REI, whose SoHo store lost power last Monday night, employees took groups of customers around in the dark last week, aided by headlamps and flashlights. While the store was able to accept payments, its regular flow of merchandise was thrown off. Once power was restored on Friday, employees had to manually count and order merchandise, said Les Hatton, northeast retail director for REI.

Grocery stores and others that depend on perishable items are facing trouble, as delays of several days in meat or produce deliveries can mean ruined products. “They get impacted by the ability to access the stores because the roads are not repaired yet, the traffic, the ability to get even a truck driver to drive to the stores,” said Kumar Venkataraman, a partner at the consulting firm A.T. Kearney.

As for Mr. Van Sickle of Polka Dog Bakery, he has been struggling with a sense of guilt for worrying about his dog food containers at a time when the storm has destroyed homes and killed people. He is considering repackaging the biscuits and donating proceeds to storm relief efforts.

“It’s been really difficult to take stock of what’s happening on the ground in New York and New Jersey,” he said, “versus what’s happening in my little office in Boston, where I’m calling my important customers and saying, ‘I’m sorry, guys, I don’t think you’re going to get any product’.”

This story originally appeared in The New York Times

Gasoline shortages in northeast U.S. highlights how quickly modern societies will unravel following disasters

Gasoline Runs Short, Adding Woes to Storm Recovery

Widespread gas shortages stirred fears among residents and disrupted some rescue and emergency services on Thursday as the New York region struggled to return to a semblance of normalcy after being ravaged by Hurricane Sandy

NY Times,

1 November, 2012

Tiny increments of progress — some subway and bus lines were back in service — were overshadowed by new estimates of the storm’s financial cost, struggles to restore power, and by the discovery of more bodies in flooded communities.

The lines of cars waiting for gas at a Sunoco here ran in three directions: a mile-long line up the Garden State Parkway, a half-mile line along Vauxhall Road, and another, including a fleet of mail trucks that needed to refuel before resuming their rounds, snaking through a back entrance. The scene was being replayed across the state as drivers waited in lines that ran hundreds of vehicles deep, requiring state troopers and local police to protect against exploding tempers.

“I’ve been pumping gas for 36 hours, I pumped 17,000 gallons,” said Abhishek Soni, the owner of an Exxon in Montclair, where disputes on the line Wednesday night had become so heated that Mr. Soni called the police and turned off the pumps for 45 minutes to restore calm. “My nose, my mouth is bleeding from the fumes. The fighting just makes it worse.”

Four days after Hurricane Sandy, the effort to secure enough gas for the region moved to the forefront of recovery work. The problems affected even New York City, where the Taxi Commission warned that the suddenly indispensable fleet of yellow cabs would thin significantly Friday because of the fuel shortage.

City officials said they had reached an agreement with a major supplier Thursday night that would ensure emergency operations — fire, police, sanitation and work by the parks department to clean up downed trees — would continue uninterrupted.

Though Thursday marked a return to routine for many who ride the subway to work or celebrated the resumption of power, the scenes of long lines, fistfights at gas stations and siphoning at parking lots highlighted the difficult, uneven slog to recovery.

The losses from the storm will approach $50 billion, according to an early estimate from economists at Moody’s Analytics — about $30 billion in property damage, the rest in lost economic activity like meals and canceled flights. At the same time the death toll in New York City rose to 38, as rescuers continued to discover bodies while combing through coastal wreckage. Among them were the bodies of two boys, 2 and 4, who had been torn from their mother by raging floodwaters on Staten Island on Monday night.

The lack of power continued to bedevil efforts to address the damage. About 43 percent of customers in New Jersey and about 16 percent in New York State remained without electricity, and Officials said that they expected power to be restored to all of Manhattan by Saturday. Those issues were only aggravated by the increasingly short supply of gas, particularly given that many suburban residents in New Jersey and elsewhere were heading to the stations to fuel generators, which provided the lone source of power and heat to homes across the region.

According to figures from AAA, of the gas stations it monitors, roughly 60 percent of stations in New Jersey and 70 percent on Long Island were closed.

At stations that were open, nerves frayed. Fights broke out Thursday at the block-long Hess station on 10th Avenue in Midtown Manhattan, forcing the Police Department to send three officers to keep the peace, a police official said. By evening, the police had to close two lanes of the broad thoroughfare to accommodate a line of customers stretching eight blocks, to 37th Street.

The ports and refineries that supply much of the region’s gas had been shut down in advance of the storm and were damaged by it. That disrupted deliveries to gas stations that had power to pump the fuel. But the bigger problem was that many stations and storage facilities remained without power.

Politicians were scrambling Thursday to increase the supply of fuel — the Port of New York and New Jersey opened just enough to allow boats carrying gas to move, and Gov. Chris Christie of New Jersey waived restrictions that make it harder for stations to buy gas from out-of-state suppliers. Mr. Christie’s office had warned that price gougers would be prosecuted, but drivers were reporting that some stations were charging more than $4 a gallon, even though the state had set gas prices at $3.59 on the highways last week.

Mr. Christie said Thursday afternoon that President Obama had sent 250,000 gallons of gas and 500,000 gallons of diesel fuel to the state through the Department of Defense, and he pledged to send more if needed.

Despite these steps the situation was not expected to get significantly better on Friday. Utility companies said power might not be fully restored until late next week.

In Paterson, N.J., the state’s third-largest city, the Police Department was trying to negotiate emergency contracts for gas, and short of that, said it would beginning siphoning it from other city vehicles to keep police cruisers running.

The Essex County executive, Joseph N. DiVincenzo Jr., said that the fuel shortage had become his No. 1 concern, causing officials to start limiting gas half a tank at a time to police and fire vehicles. “All 22 of our municipalities are having problems getting fuel,” he said. “Everyone’s on edge.”

Some drove hours out of their way, across state lines, in search of gas. Others tried their luck at a dozen stations, finding many roped off, or turned to Twitter, trading tips about where lines were long.

That is how Jason Brown, 25, of St. Albans, Queens, learned there might be gas at a BP station two miles away in Valley Stream, Nassau County. He walked there lugging a five-gallon Igloo cooler hoping to fill it with gas for his car — only to find a line stretching a quarter-mile along Sunrise Highway. When the generator pumping the gas failed, the crowd erupted into fights and police were called in to close the station.

“I’m trying to get gas for my family,” Mr. Brown said. “Everywhere you go, it’s either a riot or there’s no gas.”

The lines themselves only exacerbated the problem; reports in the local media provoked drivers to buy gasoline before stations ran out. Some spent what fuel they had searching for more and could be seen pushing vehicles toward relief.

“I just want to have it, because you don’t know how long this is going to last,” said Richard Bianchi, waiting in the half-mile line at the Sunoco in Union with a tank that was three-quarters full.

“People are panicking,” said Jimmy Qawasmi, the owner of a Mobil in the Westchester County town of Mamaroneck. “People must have heard something.”

Bloomfield Avenue, a traffic artery connecting several towns in Essex County, N.J., was unusually congested as drivers stopped to lean out their windows at every station: “You got gas?” Mr. Soni’s station in Montclair had received a delivery of 8,000 gallons at 4 p.m. Wednesday, but that had run out by 2:30 a.m. Thursday. A tanker truck passed by, prompting a cheer. “I’m empty!” the driver called out.

Up the road, a tanker turned into one gas station just down from where a crowd was waiting at another. The people waiting dashed across the street, only to see the tanker turn and go to the station where they had been waiting. The police were refusing to let the station open for three hours, but people were determined to hold out.

As Benito Domena, holding two gas cans, said: “The wait is just going to be worse elsewhere.”

16 Photos Of Chaos As New Yorkers Attempt To Get Back To Work

Across New York and New Jersey, commuters fight staggering bus lines and fuel shortages to get back to their normal lives.

Buzzfeed,

1 November, 2012

1. A bus line wrapping around the Barclays Center in Brooklyn

Source: @RAndersonBRKLYN

2. The Manhattan-bound bus line in Brooklyn

Via: instagram.com

3. The line for the bus outside the Barclays Center in Brooklyn wrapped twice around the building

Via: AP

4. A three-block bus line in Brooklyn

Source: statigr.am

5. The line for Manhattan-bound buses in Brooklyn

Source: twitpic.com

6. Cars waiting for gas at a Brooklyn BP

Source: statigr.am

7. A line for the ferry from Jersey City into Manhattan

Source: @hsbakshi

8. A line for the bus over the Manhattan Bridge

Source: @joshrobin

9. Bus lines in Manhattan

Source: statigr.am

10. A Manhattan intersection with no police, lights, or traffic signs

Source: @jasonWSJ

11. A line for a dumpster outside of a Whole Foods in lower Manhattan

Source: @capexa

12. A gas line wraps around a station in New Jersey

Via: http://Getty%20Images

13.

Via: http://Getty%20Images

14. Gas lines at the Jersey Shore

Source: statigr.am

15. Gas line on the Jersey Turnpike

Via: AP

16. A man charges his phone with a generator on 14th St. in Manhattan

'A new reality'

A frank admission from Gov. Cuomo

Cuomo: flooding ‘a new problem for New York State’

NBC’s Brian Williams speaks with New York Gov. Andrew Cuomo who toured the damage in New York City on Tuesday

Visit NBCNews.com for breaking news, world news, and news about the economy

New York subway

NY Subway May Take Weeks to Restore Service, 5 Million Affected; 80 Flooded Homes Destroyed by Fire; Stunning Flood and Fire Images

Mish's Global Economic Analysis,

30 October, 2012

Hurricane Sandy has moved on but the damage remains. The following picture of Times Square posted on Gizmodo caught my eye. Fortunately, it does not look real. Lights should not be on and there would be debris everywhere.

However, the Metra chairman did say water was "literally up to the ceiling" at one downtown station, so take this image and use your imagination, adding dead rats, debris, and whatever else suits your fancy.

 

Bloomberg reports the New York Subway System May Take Weeks to Recover From Flooding.

Restoring service on New York subway lines that have been flooded could take weeks, said Mortimer Downey, a former MTA executive director and current board member of the Washington Metropolitan Area Transit Authority.

“From the New York viewpoint, they’ve got a lot of work ahead of them,” Downey said in an interview. “It’s going to be days and possibly weeks.”

He declined to estimate what the recovery may cost because there’s no precedent for the work that will need to be done.

Previous reports said the New York city subway would remain closed for 14 hours to four days. 

Unprecedented Challenges 

Reuters reports Sandy leaves unprecedented challenges for New York City subways

 The giant storm Sandy wreaked havoc on the New York City subway system, flooding tunnels, garages and rail yards and threatening to paralyze the nation's largest mass-transit system for days.

"The New York City subway system is 108 years old, but it has never faced a disaster as devastating as what we experienced last night," Joseph Lhota, the chairman of the Metropolitan Transit Authority, said in a statement early on Tuesday.

He later said that water was "literally up to the ceiling" at one downtown station.

All seven subway tunnels running under the East River from Manhattan to Queens and Brooklyn took in water, and any resulting saltwater damage to the system's electrical components will have to be cleaned - in some cases off-site - before the system can be restored, MTA spokeswoman Deirdre Parker said on Tuesday.

At dawn, emergency crews were assessing the damage to tunnels and elevated tracks. Restoring the system is likely to be a gradual process, Parker said.

"It's really hard to say which areas will come back first," she said, adding it will likely be a combination of limited subway and bus service. "It will come back gradually."

The storm brought a record storm surge of almost 14 feet (4.2 meters) to downtown Manhattan, well above the previous record of 10 feet (3 meters) during Hurricane Donna in 1960, the National Weather Service said.

Link if Video does not play: Sandy Floods NYC Subway System

Watch More News Videos at ABC

80 Flooded Homes Destroyed by Fire

The Huffington Post reports At least 80 Flooded Houses Destroyed By NYC Blaze.

 A huge fire destroyed 80 to 100 houses in a flooded beachfront neighborhood Tuesday, forcing firefighters to undertake daring rescues and injuring three people.

More than 190 firefighters contained the blaze but were still putting out some pockets of fire more than nine hours after it erupted.

As daylight broke, neighbors walked around aimlessly through their smoke-filled Breezy Point neighborhood, which sits on the Rockaway peninsula jutting into the Atlantic Ocean. Electrical wires dangled within feet of the street.

Click on preceding link for a video and images of the fire.

The economic losses from Sandy will far exceed the physical damages. Ridership losses on the NY subway alone will be catastrophic.