Gas terminals are empty across South Dakota. From Sioux Falls to Yankton to Sioux City, they are all out. And tankers cannot find anywhere to fill up.
I was going to do some work on my book, and here I sit, completely unable to dismiss this report without replying.
A few days ago, I posted that LOI was not just a function of inventory, but also the rate of consumption. That is, 185 mb of inventory may be adequate when Product Supplied is 9.0 mb/d, but could be insufficient at 9.1 mb/d. This is derived from the application of simple Queuing Theory models and gives us at least a guideline to go by.
We saw some shortages appear at 193 mb, and now we are seeing shortages appear at 201 mb (though, even the EIA admits that this may not be correct). Inventories in some areas have obviously dropped below critical threshold levels, and this has occurred while national inventories were well above the theoretical minimum levels. The question is, can all areas of the country be supplied adequately, even though national levels are sufficient. I would say, probably, no.
Our plunge to 193 mb several weeks ago depleted regional inventories, and from this point on, unless demand is substantially curtailed, no amount of additional supplies on a national level will be able to restock those areas. As long as demand stays at its present level, the national supply system can not maintain adequate regional inventories to prevent periodic shortages from appearing around the country. We have not reached the LOI inventory part of the function, but we may have reached the rate of consumption limit.
Also , the summer driving panic is just beginning!