Disruptions to U.S. railways likely to cause spike in energy prices, gasoline shortages
“A rail strike could trigger an energy crisis in the United States, and the impact would be felt most strongly in the northeast. First, nearly all ethanol, which constitutes 10% of our gasoline blend, is produced in the Midwest and is transported via rail to the rest of the country. Due to EPA mandated blends, this could lead to a rapid spike in wholesale gasoline prices across the nation,” said Shon Hiatt, a global energy expert and associate professor of management and organization at USC Marshall.
“Second, the U.S. is running low on middle distillates (e.g., diesel, fuel oil, kerosene, jet fuel), and this shortage is severe in the eastern United States due to high European demand for these refined products. Consequently, not only is the spread of diesel price to gasoline the highest on record, but the nation’s heating oil reserves are at their lowest. Given that around 80% of residents in the northeast use heating oil as their home heating source, a rail strike could leave hundreds of thousands in the cold.”
Contact: shiatt@marshall.usc.edu
