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Katrina hits Minnesota, part 2

I linked here to a post on how national gasoline & oil supplies would be affected by the impact of Katrina, but I was thinking too small. Today's Wall Street Journal had a slew of articles on how this is going to impact the ag sector (wheat prices are already down $0.15/bushel because elevators can't book barge space) since the Port of New Orleans is one of the two major ports through which grain flows from the Midwest to the world. King at SCSU Scholars doesn't think gas is going to hit $4/gallon, especially now that W has released oil from the Strategic Reserve and the EPA has waived the regulations that force refineries to make a bunch of "boutique" blends for particular regions, which should even out the prices by making the markets more flexible. I think the ready availability of ethanol in the Midwest will help, too: a lot of the larger SUVs can be tweaked to run on E85, which is widely available throughout the Upper Midwest. In fact, you can get E85 just about everywhere in the US except for Washington, Oregon, the Deep South, Delaware, Pennsylvania, New York and New England. Most of those can import gasoline from South America and Europe, anyway.

So look for the state's economy to take a hit. We don't depend on the ag sector as much as we used to, and certainly Duluth will benefit some from New Orleans being offline for a few weeks, but I wouldn't be surprised if the recent economic growth in the state didn't stall out.

Comments

433
Sep. 2nd, 2005 12:10 pm (UTC)
Right, but you said...

a lot of the larger SUVs can be tweaked to run on E85,

...is there some way to retrofit a vehicle cheaply?
wombat_socho
Sep. 2nd, 2005 01:43 pm (UTC)
I thought there was, based on my experience with multifuel military trucks, but apparently not. I'm guessing your best bet would be to try and pick up a used E85 vehicle from some state or local government, otherwise you'd have to swap out the engine.