Hurricane Harvey & Electric Truck Release | Weekly News Update

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Texas is still reeling after Hurricane Harvey wreaked havoc along its coasts as prices reflect large disruptions to US production and refineries are felt on a national scale. Meanwhile technology continues to charge forward with the release of a new electric truck ahead of expectations. OPEC extends its ‘Oil Cut Deal,’ weight fees are in flux, and is it possible to turn trailers into electric vehicle charging units?

Harvey’s Record Rainfall Causing Widespread Issues in Houston

Hurricane Harvey made landfall as a category 4 storm just east of Corpus Christi in South Texas.  Harvey was downgraded to a tropic storm, though its impact has strengthened as it moves along the Texas Gulf Coast.  The large amount of rain combined with the slow-moving system created over 50 inches of rainfall in certain parts of the Houston area – a record amount from a single storm in the continental US.  The flooding caused by the storm displaced thousands of individuals and created tens of billions of dollars in damage.

In the energy sector, Harvey’s impacts were felt throughout the refined products supply chain.  Harvey’s impacts on the US energy industry will be felt well after the floodwaters subside. Reduced crude oil production of offshore oil wells in the Gulf of Mexico, closure of key marine terminals for global trade of oil and refined products, and reduced oil refinery output of 4-5 million barrels per day (20-25% of overall US refining capacity) are among the most notable effects of the storm.

Diesel prices have risen nearly 20¢/gallon since Harvey entered the Gulf of Mexico, while gasoline has surged more than twice that amount.

The Breakthrough®Fuel Applied Knowledge team continues to closely monitor changes in the US fuel market in the wake of Hurricane Harvey. Read more in our Advisor Pulse Updates for more detailed and timely coverage as conditions continue to evolve in Texas.

Cummins Releases a Heavy Duty All-Electric Truck

Cummins – a leading manufacturer of diesel and natural gas engines – unveiled an all-electric truck at the end of August, ahead of the highly-anticipated unveiling of the Tesla Semi set for September.

The vehicle, named AEOS, is a class 7 tractor that is being targeted for urban delivery vehicles and short haul movements in marine or railway terminals.  While this vehicle is limited by a 100-mile range, one-hour charge time, and class 7 classification, it speaks volumes about Cummins’ belief that all-electric vehicles will have a place in the future of commercial transportation.  Cummins plans to supply the fully integrated battery system by 2019 (as opposed to manufacturing the entire all-electric vehicle) as a part of their variety of available engine technologies.

In Other News

8/28

WSJ – Saudi Arabia, Russia Pushing for Three-Month Extension to Oil Cut Deal

Top oil producers, Saudi Arabia and Russia, are pushing to extend their deal to limit crude oil production for another three months. This would leave the output deal between OPEC and non-OPEC producers in place through the end of June.

8/29

Transport Topics – Oregon Raises Weight Fee System for Trucks Under New Transportation Law

Under the law, the weight fee would shift from “$16.38 cents per mile to an estimated $25.12 cents per mile by 2025.” Also, starting on Jan. 1, the motor vehicle fuel tax will increase 4 cents per gallon. That tax will then increase 2 cents in 2020, 2022 and 2024 until it reaches 10 cents per gallon.

CCJ – Harvey, aftermath to swing freight movement, stress trucking capacity

Hurricane Harvey and the damage it is inflicting in southeast Texas will crimp trucking industry capacity, alter the country’s freight flow and likely push rates upward in the coming weeks and months, said pricing and supply chain experts Mark Montague and Eileen Hart of loadboard and data firm DAT Solutions.

9/1

Bloomberg – Spaghetti-Like Pipeline System Falls Short as Gulf Flows Lag

Harvey is putting a new spotlight on a spaghetti-like network of petroleum pipelines that run across the plains and fields of Texas, disrupting the ability of at least two major Gulf Coast conduits to send fuels north.

Freight Waves – Turning trailers into electric vehicle charging units

Is a trailer just a box on wheels or potentially a portable battery charger? That is one of the questions that could be answered through continued innovation of commercial vehicles. Rick Mihelic of Mihelic Vehicle Consulting talked about where future innovation may come from during a Stifel conference on Wednesday titled, “Envisioning Future Commercial Vehicles.”

This weekly publication is designed to highlight relevant industry news to provide professionals in the transportation, supply chain, and energy sectors with up-to-date information in a rapidly changing marketplace. This update is purely a compilation of industry news and as such, does not necessarily reflect the opinion of Breakthrough®Fuel. We do not warrant or guarantee accuracy or completeness of information. For additional information, please contact us at info@breakthroughfuel.com.

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