LUBBOCK, TEXAS (RFD NEWS) — South Texas drought is becoming more than a farm and ranch water issue as Corpus Christi refineries and chemical plants face possible water surcharges. According to OPIS, the city is preparing for a projected Level 1 Water Emergency tied to a prolonged five-year drought.
The region includes Valero, Flint Hills Resources, and Citgo refineries, with a combined crude distillation capacity of 900,000 barrels per day. That equals about 5 percent of U.S. refining capacity.
Most analysts do not expect major refinery production impacts on refinery production for now. Companies have been recycling, reclaiming, and reusing water, and some may absorb added costs rather than cut operations.
Still, drought near a major refining and petrochemical hub poses a risk to agriculture. If shortages worsen, producers could eventually feel pressure through diesel, freight, irrigation fuel, chemicals, plastics, and fertilizer-related costs.
The concern grows if drought overlaps with hurricanes, outages, strong summer demand, or tight inventories.
