When We’re Out Of Diesel, We’re Out Of Everything.

Unless you drive an old Volkswagen or Mercedes, you’ve probably never put diesel fuel in your car. Cars are powered with gasoline, another distillate of crude oil. But practically everything else does run on diesel.

This includes trains, trucks and cargo vessels. That’s the backbone of the entire global transportation network.

When Chinese manufactured goods get to your local convenience store, they’ve arrived via container cargo ships that depart Ningbo (near Shanghai) and sail to the Port of Los Angeles. From there, the containers are loaded onto special flatcars for trains or truck chassis. They are then carried by train or truck to distribution centers, where they are placed on other trucks for the final journey to your local store.

Diesel fuel powers the transportation lanes that connect the global supply chain. Diesel also powers a lot more, including generators, heavy equipment, fishing fleets, recreational boats, and more. Without diesel, the world would quickly grind to a halt even more devastating than the worst of the pandemic panic in March 2020.

Right now, the U.S. is running out of diesel fuel. The U.S. typically has a 30-day supply of diesel that is continually topped up by new deliveries from oil refineries. Today that supply is under 25 days.

Critically, the refineries can’t keep up with demand, so the supply is dwindling by the day and cannot easily be replenished. As explained in this article, refineries can’t increase output. Worse yet, some portion of U.S. refinery output is being shipped abroad by major oil companies to avoid shortages in Europe that are even worse than what’s emerging in the U.S. Government.

Officials are yelling at refinery operators to produce more, but they can’t. The U.S. has not added any refinery capacity since 1977. Some refineries have even been closed recently.

There’s no inclination to invest in new refinery capacity because the Biden administration has threatened to destroy the U.S. oil and gas industry. Why invest in an industry that’s targeted for destruction by the White House?

This diesel shortage is coming to a head fast. The best case is prices will skyrocket. That means the prices of all the goods carried on trains, trucks and vessels will skyrocket too, because those higher transportation costs get passed along in the form of higher prices for the goods being exported.

The worst case is a gradual shut-down of transportation lanes, bare shelves in stores, food shortages and social unrest. When gas is $10.00 per gallon and you can’t buy baby food for your children, you can thank the Green New Scam ideologues and Joe Biden for the dismal economic state of affairs.

 

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