Worst drought in decades could affect U.S. energy markets

Despite the imminent landfall of Hurricane Isaac in the Gulf Coast, the United States is currently experiencing its worst drought in decades, as measured by the U.S. National Oceanic and Atmospheric Administration (NOAA). Droughts have relatively well-understood impacts on food crops and markets. But droughts can also affect energy markets. A significant amount of corn production is used to produce ethanol, which makes up about 10% of the motor gasoline pool by volume and provides 6%–7% of the gasoline's energy content. And since the generation of electricity can be very water-intensive, droughts affect the power sector.

Drastically reduced rainfall and triple-digit temperatures throughout much of the nation have damaged corn and other crops, which will have significant impacts on supplies and prices for animal feed, livestock, meat and dairy products, and processed grain products, including ethanol. The drought has also disrupted the transportation of some commodities, such as petroleum and coal, that are delivered by barges on the Mississippi River. The U.S. Army Corps of Engineers has reported groundings of traffic along the Mississippi River due to low water depths, and NOAA has stated that portions of the Mississippi River south of Memphis are below the 1988 low-water level. Droughts can also create reliability concerns for electric power plants. Increased temperatures drive demand for electricity to cool homes and businesses, but lower water levels can affect the operation of many thermoelectric power plants.

The U.S. Drought Monitor, a joint publication of USDA and NOAA, is currently reporting that large areas of the Midwest and Great Plains regions are experiencing significant drought conditions. NOAA's Climate Prediction Center (CPC), integrating Drought Monitor data with weather forecasting, is predicting that the drought conditions will remain mostly unchanged through the end of November.

An upcoming series of Today in Energy articles will focus on the impact of the drought on various energy sectors in the United States.

“When heaven is shut up, and there is no rain, because they have sinned against thee; if they pray toward this place,* and confess thy name, and turn from their sin, when thou afflictest them: / Then hear thou in heaven, and forgive the sin of thy servants, and of thy people Israel, that thou teach them the good way wherein they should walk, and give rain upon thy land, which thou hast given to thy people for an inheritance.”

— 1 Kings 8:35-36

“If I shut up heaven that there be no rain, or if I command the locusts to devour the land, or if I send pestilence among my people; / If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land.”

— 2 Chronicles 7:13-14

“Take heed to yourselves, that your heart be not deceived, and ye turn aside, and serve other gods, and worship them; / And then the LORD's wrath be kindled against you, and he shut up the heaven, that there be no rain, and that the land yield not her fruit; and lest ye perish quickly from off the good land which the LORD giveth you.”

— Deuteronomy 11:16-17

“But it shall come to pass, if thou wilt not hearken unto the voice of the LORD thy God, to observe to do all his commandments and his statutes which I command thee this day; that all these curses shall come upon thee, and overtake thee: … / And thy heaven that is over thy head shall be brass, and the earth that is under thee shall be iron. / The LORD shall make the rain of thy land powder and dust: from heaven shall it come down upon thee, until thou be destroyed.”

— Deuteronomy 28:15, 23-24

* The temple in Jerusalem that Solomon had built.

I ended up quiting a Ethanol discussion group on Yahoo as they constantly would attack anyone who would post any facts relating to the inefficiency of Ethanol or to its effect on engines (especially small engines) and fuel systems.

The usual attack was “FOX viewers believe this or that blah blah blah” and if you dared to present factual data that post was deleted by the moderator as being too political.

Never once was a deleted post challenged on the facts only that they must have come from a FOX viewer and were too political.

Well if it were not for politics the free market would have killed off the Ethanol industry before it ever got started as the numbers energy wise and cost wise are against it.

Funny how even in a discussion on Ethanol, losers in the debate will use Saul Alinsky tactics.

making ethanol with corn is insanity.

might as well be spraying gatorade on our crops.

Wasn’t that in a movie?

Black media hero as president?

Dumber than a sack of hammers?

OMG

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