CO2 shortage yet to affect Norman businesses

Sep. 2—Norman businesses say they have yet to be affected by a nationwide carbon dioxide shortage, but experts believe its effects will only grow as more shutdowns are expected in the coming months.

Between toilet paper, plastic cups and computer chips, consumers and businesses alike are well-accustomed to "supply chain shortages," and now a carbon dioxide disruption is having a considerable effect on brewers and cannabis producers across the country, though some local businesses have yet to experience it.

Experts point to seasonality and contamination at Jackson Dome, a natural carbon source field and the leading supplier of carbon dioxide east of the Mississippi River.

Gasworld reports the 200-square-mile gas source likely became contaminated when Denbury, the independent energy company that owns Jackson Dome, used existing CO2 supply for enhanced oil recovery and drilled more wells to feed the CO2 pipeline.

Doug Foltz, operations manager for CO2 supplier City Carbonics said contamination has filtered through Denbury's entire system.

"They had to shut down, and when they did that, they shut off half the country's flow of CO2," Foltz said.

Tabbi Burwell, executive director of the Oklahoma Craft Beer Association, hasn't heard of any Norman brewers experiencing difficulty with C02 supply, though one Oklahoma City brewery has expressed some concern.

"We talked about it at our guild retreat in Madison, Wisconsin a few weeks ago, and several other states are experiencing issues," Burwell said.

Stephen Swanson, founder and co-owner of Lazy Circles Brewing on Main Street, said the shortage has yet to affect them, though he has noticed a change in the frequency of deliveries from the company he uses for C02 refills.

He suspects it's hitting some of the nation's larger markets and hopes it doesn't worsen, or it could affect smaller local breweries across the country like Lazy Circles.

"They don't come as frequently to fill our CO2, and we have a very large tank outside of our building that they refill," Swanson said. "I've noticed they let it get a lot lower before they refill it, which so far, hasn't really been affecting us."

Foltz said aside from brewers, and dairy suppliers, the cannabis industry is likely the most impacted by the gas shortage.

"I'd say about 90% of our CO2 goes out to growers of cannabis," Foltz said.

High levels of the gas in a cannabis garden can ensure stronger plants with increased yields, according to Leafly, an online resource and mobile application for cannabis.

"It can give them about 30% to 40% more growth in yields, so if you can (do that), and pot is going for $1,500 a pound, you can imagine the amount of money you're making," Foltz said.

Buzz Banfield, vice president of operations for Native Harvest, a line of metro-area dispensaries, said the shortage hasn't affected operations, and their vendors haven't indicated it will.

Foltz said while smaller companies may not be seeing its effects yet, larger companies like Tyson and Coca Cola are likely concerned, and in a worst case scenario, the prices of those products could rise. The cost to procure CO2 is already going up for Foltz and City Carbonics, where extra steps have been necessary to secure enough to supply their clients.

"We're trying to source it out," Foltz said.

Recently, Foltz said he's called Mississippi, Texas, Kansas and Missouri to fulfill orders.

"Then we have to get a transport, and we have to hire a guy to drive to east St. Louis to pick up a load and bring it back to us," Foltz said. "We've had to add fuel surcharges (to orders)."

Gasworld reports Hopewell, a CO2 plant in Virginia is scheduled to shut down in September. This means about 75 fewer truckloads of the gas in the supply chain per day.

Jeff Elkins covers business, living and community stories for The Transcript. Reach him at jelkins@normantranscript.com or @JeffElkins12 on Twitter.

Advertisement