Skip to comments.Katrina Lays Bare US Refinery Crisis
Posted on 09/02/2005 9:06:27 PM PDT by Brett66
Katrina Lays Bare US Refinery Crisis
Washington (AFP) Sep 01, 2005
Hurricane Katrina has shut down 10 percent of US refinery capacity at the worst possible time when oil facilities were already straining to cope with booming summer demand.
Department of Energy figures out Thursday showed that nine refineries are closed and oil production in the Gulf of Mexico remains at a virtual standstill after Katrina swept a deadly path through the southeastern United States.
Three major oil pipelines connecting the south to the rest of the country are operating at vastly reduced capacity in the deadly storm's wake.
President George W. Bush, having authorised the release of emergency crude supplies to refineries, Thursday ordered a temporary waiver enabling foreign-flagged ships to carry gasoline between US ports.
"In our judgement, we view this storm as a temporary disruption that is being addressed by the government and by the private sector," he told reporters.
"Americans should be prudent in their use of energy during the course of the next few weeks. Don't buy gas if you don't need it," Bush added.
Presenting its latest tally of Katrina's impact on US energy production, the DoE said nine refineries on the Gulf Coast in Louisiana, Mississippi and Alabama were shut down and another three were running at reduced pace.
With refineries elsewhere in the United States operating at 97 percent capacity before the storm struck to cope with sky-high demand for gasoline (petrol), there is no spare capacity to pick up the slack.
"The simplest assessment of the aftermath of Katrina is that the worst possible event has occurred at the worst possible moment," Fimat oil analyst Mike Fitzpatrick said.
"As crude oil and distillate inventories continued to climb heading into the slack demand period, the one element that still laboured under terrific stress was the refining infrastructure -- and that has borne the full brunt of the storm," he said.
Combined, the nine refineries' production capacity is 1.83 million barrels of oil a day -- about 10 percent of total US output.
Refineries as far north as Illinois, Indiana and Ohio are feeling the pinch from supply shortfalls, the DoE said.
A total of 487 platforms and rigs remain evacuated in the Gulf of Mexico, which normally supplies a quarter of US crude production, new figures showed.
Overall, 90 percent of daily Gulf of Mexico crude production is shut down and 79 percent of natural gas output is halted.
The Louisiana Offshore Oil Port, which receives about 10 percent of total US crude imports, has suffered "minimal damage" but remains hampered by lack of electricity, the DoE said.
Katrina has laid bare the burdens placed on the strained US refinery system. Due in part to tougher environmental regulations and local opposition, no new refinery has been built in the United States since 1976.
"Unfortunately for many oil consumers, we will soon see what happens when a supply shock occurs when prices are already at high levels," the US Energy Information Administration said in a report entitled "The Sum of All Fears."
"But the extent to which analysts' fears are realized will largely depend on how long petroleum infrastructure remains offline," it said.
The EIA said some refineries might resume operations within a week or two, "while others will likely be down for a more extended period, possibly several months."
The fear then would be of heating oil shortages as the United States enters the winter months.
American Petroleum Institute president Red Cavaney, however, said the situation has already "significantly improved."
"There is enough (oil) inventory. It's not in the right places. Moving it around will be very critical," he said.
I think we may get the Carter gas lines back over this IMO.
If nothing changes but the passage of time, supply will return to normal and prices will drop.
If we don't build new refineries, I doubt we'll see prices go below $2.00/gal again.
I have not seen any info on refinery damage.
Well, this emergency is a good reason for Bush to call for 15 new refineries in addition to fixing what we've got.
How about we just outlaw heating oil!
Just wait till the power grid fails. We are running at about 95% capacity on our power plants too.
We cancelled our labor day trip. We were planning on a 600 mile loop drive. We are going to stay in the Seattle area and do some tandem bike rides instead.
"This is an economy killer that is a direct result of the insanity of the environmental lobby."
The Watermelon elites of America have been setting up this disaster for close to 3 decades by blocking and preventing any new refineries while our population was growing legally and illegally.
They are probably drinking fine French Wines and French bottled water tonight and this weekend to celebrate their potential crippling of our economy.
So true, Grampa!!!
They are part of the Unholy Alliance....see the book by David Horowitz.....
Personal note, I am without my high speed internet since about noon....working with my daughter's computer and her earthlink connection ....she is down her helping me and we are doing some upgrading on her computer. May have the broadband back by noon Sunday....very painful!
I hear you! Living here in the Northern California Bay area, is colder than living in Chicago where I grew up. I'm freezing all of the time. Even in Summer. Must be because insulation is looked at as a character flaw. ;-)