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2 days ago 4 min read
Carbon dioxide (CO2) supply disruptions are currently impacting the US Southeast, with some brewers in the region having to navigate periodic operational shutdowns.
Brewers and analysts have told gasworld, quality issues at Jackson Dome in Mississippi are understood to be impacting supply, with force majeure declarations in effect and several plants offline.
“[They] are facing… unreliable delivery schedules, really strict allocations of CO2, and in looking for alternative sources, highly volatile pricing.”
The impact is already being felt on the ground. New Orleans-based Urban South Brewery ran out of CO2 last Friday and was unable to secure another load until Wednesday, forcing it to halt production.
Jacob Landry, founder and President of Urban South Brewery, said Urban South relies on Jackson Dome for its CO2 supply and has experienced previous occasions when CO2 coming from some of its wells has fallen below beverage grade.
He explained that Urban South’s supplier cannot clean the affected CO2 to beverage grade, while other suppliers that can process it have faced additional demand.
“So, this is really, in 10 years is the first time we’ve run completely out of CO2. So, once that happens, we’re dead in the water. We can’t operate.”
He explained that CO2 is required throughout the brewery’s production process to prevent oxygen from coming into contact with the beer, including for purging tanks, moving beer, and canning.
The shutdown also had a direct impact on sales, with Landry saying “you just lose sales that you never make up”
Skypeck said his understanding is that the current issue involves a small number of wellheads at Jackson Dome, affecting the availability of supply to one or two commercial suppliers.
He said the disruption highlights the difficulties brewers can face in securing alternative sources of CO2, particularly smaller businesses with existing supplier contracts and leased storage.
Skypeck also noted the regional nature of CO2 supply and the costs involved when suppliers are forced to source product from further afield.
“[O]nce a brewer…or a supplier has to start bringing in CO2 from another area, [it] becomes quite expensive to move that steel CO2 around the country, so the pricing becomes very volatile, and affects the pricing in other regions.”
Benzene
Contamination at Jackson Dome also contributed to widespread US CO2 supply disruption in 2022.
Back then, the contamination was benzene – and gasworld believes that benzene may also be contributing to the current quality issues.
gasworld also understands that as the affected wells are drawn down, benzene levels are continuing to rise, requiring plants to change their filter beds more frequently and adding to operating costs.
Benzene is a volatile organic compound and known carcinogen, with its presence in raw CO2 potentially preventing the gas from meeting specifications required for food and beverage applications.
Jackson Dome
The Jackson Dome has long played a significant role in the US CO2 market.
Located in Mississippi, it covers approximately 200 square miles.
Denbury acquired its Jackson Dome assets in 2001, with the site becoming the company’s primary Gulf Coast CO2 source. The asset is now owned by ExxonMobil following its $4.9bn acquisition of Denbury in November 2023.
ExxonMobil’s acquisition also included an extensive CO2 pipeline network, including infrastructure connecting Jackson Dome with industrial and enhanced oil recovery operations across the Gulf Coast.
The Jackson Dome is an important source of CO2 for the Gulf Coast, supplying raw CO2 to downstream purification and distribution operations serving the merchant market.
gasworld has reached out to CO2 producers in the region but is yet to hear back.
