Guest Post: US Midwest Hit By Perfect Gasoline Storm

Wednesday, August 8, 2012
By Paul Martin

by Daniel Graeber
ZeroHedge.com
08/07/2012

Retail gasoline prices in the U.S. Midwest were as much as 50 cents higher than in the rest of the country. By Monday, the price of a gallon of regular unleaded jumped 13 cents from last week in Detroit to settle at $3.99. The spike in retail gasoline prices follows a series of pipeline spills in Wisconsin and refinery shutdowns in Chicago and elsewhere. The impact of the string of industrial incidents on consumers in the region may be short-lived, but retail prices rarely decline as fast as they increase.

The American Automobile Association, in its daily gasoline report, states a gallon of regular unleaded gasoline in Detroit cost $4.05, up from the $3.69 average just one week ago. Chicago drivers, meanwhile, were paying on average $4.39 per gallon, a 10 percent increase from last week. According to AAA, the national average for a gallon of regular unleaded is $3.62. While that’s a far cry from the national spikes early this year, the regional blow has irked many area residents wary of high consumer prices and pipeline incidents.

An industry analyst said much of the region was hit by “a cluster of bad luck.” Last month, pipeline company Enbridge reported a leak on a pipeline in Wisconsin. A section of the Lakehead oil pipeline system ruptured there, cutting off oil supplies to Chicago-area refineries. U.S. Transportation Secretary Ray Lahood said the incident was “absolutely unacceptable” and forced Enbridge to keep the line closed until authorities review a restart plan for the entire 467-mile pipeline.

In Michigan, the state’s governor last month issued a fuel emergency in response to the rupture of pipeline that released 1,000 barrels of unleaded gasoline in eastern Wisconsin. Gov. Rick Snyder’s emergency declaration lifted the restrictions placed on long-haul truckers so they could deliver retail petroleum products. Less than two weeks later, Enbridge confirmed that 1,200 barrels of oil spilled from Line 14 in central Wisconsin. A nearby resident said the pipeline “blew like an oil well.”

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