Rita could equal $5 gas

CNN/Money ^ | 9/21/05 | Chris Isidore

[Crackingham]

Remember when gas spiked to $3-plus a gallon after Hurricane Katrina? By this time next week, that could seem like the good old days. Weather and energy experts say that as bad as Hurricane Katrina hit the nation's supply of gasoline, Hurricane Rita could be worse. Katrina damage was focused on offshore oil platforms and ports. Now the greater risk is to oil-refinery capacity, especially if Rita slams into Houston, Galveston and Port Arthur, Texas.

"We could be looking at gasoline lines and $4 gas, maybe even $5 gas, if this thing does the worst it could do," said energy analyst Peter Beutel of Cameron Hanover. "This storm is in the wrong place. And it's absolutely at the wrong time," said Beutel.

Michael Schlacter, chief meteorologist at Weather 2000, said Rita now appears most likely to hit between Port Arthur and Corpus Christi, Texas, sometime between Friday afternoon and Saturday morning. Just about all of Texas's refinery capacity lies in that at-risk zone.

"There is no lucky 7-10 split scenario to use a bowling analogy," he said. "If you're [a refiner] within 200 miles, you're going to feel the effect."

When Katrina hit, 15 refineries, nearly all in Louisiana and Mississippi, with a combined capacity of about 3.3 million barrels a day were shut down or damaged, according to the Energy Department. That represented almost 20 percent of U.S. refining capacity.

Within a week, almost two-thirds of that damaged capacity had resumed some operations, according to the department. But four refineries with nearly 900,000 barrels a day of capacity are still basically shut down.

If Rita hits both the Houston-Galveston area, as well as the Port Arthur-Beaumont region near the Texas-Louisiana border, that could take out more than 3 million barrels of capacity a day

[Perdogg]

Please.

[adam_az]

Build more refineries.... inland.

[SevenMinusOne]

The MSM continue to pray and hope gas prices reach $5 - Their joy in hoping that "something" "anything" can / will hurt our economy is sickening to watch -

You literally see the joy in their reporting -

Nevertheless, GWB will continue to lead and America and the World will continue to be better off because he is in office -

[jwalsh07]

Is there a lesson to be learned here? You bet there is and it has to do with refinery capacity and georgraphy. New England Nimbyidiots, you listening?

[cyborg]

I guess the media needs a constant boner over bad news.

[Clintonfatigued]

Freepers and conservatives in America, GET TO THE GAS PUMP TONIGHT!!!

I just filled my tank a few hours ago.

[RightWhale]

CNN thread again. The main problem in NO was the workers had to get out and couldn't get back, that plus flooding. It's pretty hard to blow down pipeworks. 76 Michoud workers had still not reported in at the Shuttle external tank assembly plant last report. There won't be any problem in Texas, maybe a couple days offline.

[Feiny]

Why is it they can raise the proces so fast, but they never lower them at the same rate?

We are all getting screwed.

[bikepacker67]

New England Nimbyidiots, you listening?

HEY!

I don't see any freakin' Midwesterners lining up for refineries to be built in THEIR backyards.

[RightWhale]

GET TO THE GAS PUMP TONIGHT

Thanks, but I just topped off last week and going back again so soon would burn as much gasoline as would fit in the tank at this point to top off again.

[Kolokotronis]

"Is there a lesson to be learned here? You bet there is and it has to do with refinery capacity and georgraphy. New England Nimbyidiots, you listening?"

Much of the gasoline and heating oil product in New England (virtually all of it in Maine) comes from the Irving refinery in New Brunswick and their crude comes mostly from Nigeria and Venezuela, none, not a drop, from the affected Gulf areas. When Katrina hit, word went out that there would be allocations of unbranded product and the price of unbranded went through the roof. Branded product, most of it Irving exchange product, went right up with it, though there was no shortage at all and no allocations except by raising the price of the product. Prices have not come down as fast as elsewhere nor as far. We need more refineries, no question about it, but don't think for a minute that they will have much if any impact on retail gasoline prices.

[GovernmentShrinker]

Translation: Some higher-ups at CNN shorted the equity markets yesterday.

[Doogle]

...I swear,if some moomoo in east lower jibbib burnt down his shack the oil companies would raise the price of gas.
I wish just once some oil company exec would come out and say.."ya know folks,would could sell this stuff for nickles
if we wanted too, but with all the European countries paying $6 and $7 dollar a gallon...aw what da *ell why would do that?"
Every time I hear that phrase.."We're lucky were not paying what their paying in Europe"...I always say...NO..their unlucky.

Doogle

[KeyLargo]

I say go for 10 dollars a gallon!

It will thin out the herd into the serious drivers only.

Donald Trump

[cyborg]

YES.

[umgud]

Gas used to be $.50/gal, then there was a crisis and it went to $1.75 and everybody screamed, so it went back down to $.75/gal and everybody was happy.

Then there was a crisis and gas went from $.75 to $2 and everybody screamed until it went back down to $1.25.

Then there was a crisis...............

[Past Your Eyes]

Exactly.

[thoughtomator]

Bring it on.

[Ronzo]

Looking at the hurricane track from NOAA, and then looking at satelite pictures of the Texas Gulf coast from Google Earth, it seems as our girl Rita is headed DIRECTLY for a BIG refinery in Freeport, TX; just south of Houston.

Anybody else notice this?

Anyway, while I don't think gas will hit $5, I can gaurentee that it will be above $3 in a couple of days, and probably linger between $3 and $4 for quite a while.

It would be better for everyone if Rita were to follow in Katrina's path, and finally turn New Orleans into a lake. Having Rita staying on her current path, and at her current intensity towards the Texas coast is doing to do terrible things to all the refinery's and ports located there.

This is not good, not good at all. Even if every single person is removed out of Rita's path, you can't move the refineries, storage tanks, and dock facilities. Also, I imagine a lot more offshore rigs will be heavily damaged if not destroyed by Rita.

While there won't be any gas shortages, things will be expensive for a while....maybe a LONG while...