Brian Martin, Policy Director for Mississippi Congressman Gene Taylor, has been calling our attention to Ike’s impact on gulf oil rigs in comments today – and that told me it was time for a closer look.
The best-case scenario for Ike is that its damage is limited, allowing refineries in its
path to open in short order after it passes. One encouraging sign: oil rigs in the Gulf, many of which have been strengthened after hurricane Rita in 2005, are not expected to be affected as drastically as they were in 2005.
Unfortunately, a worst-case scenario is more likely, says Jeff Masters, chief meteorologist at the Weather Underground, an online weather service with offices in Ann Arbor, Mich., and San Francisco. Though winds aren’t as strong as the devastating hurricane Carla in 1961, Ike’s storm surge is expected to exceed Carla’s, setting Texas records and rising perhaps 15 to 20 feet high. Texas officials have gone so far as to warn residents that staying in low-lying areas means “certain death.”
Ike’s potential for damage equals that of Katrina in 2005, says Mr. Masters, because its total kinetic pressure – the sum of wind speed plus size of the storm – is equal, or even greater, than that of Katrina.
In fact, because of a massive expected storm surge along 200 miles of coastline, Masters expects Ike’s damages to top $30 billion. (Katrina caused $35 billion in insured losses, while hurricane Andrew in 1992 cost about $21 billion.) For example, he says, the surge is expected to overtop the coastal defenses of Port Arthur, Texas, by six feet, likely flooding the entire town. Port Arthur is home to three of the nation’s largest refineries.
In anticipation of those kinds of losses, some reports indicate that gas prices are already inching toward $5 a gallon along the Gulf Coast. That news is bringing back memories of gas-price spikes following hurricane Katrina in 2005, when some Atlanta gas stations were selling gas in excess of $8 a gallon.
“We may not be in quite as bad shape as in 2005, but we’re going to lose refining capacity and gas supplies are going to be tight,” says Masters.
The Houston area’s refineries handle 13 percent, or 2.22 million barrels a day, of the nation’s oil supply. A total of 19 percent of the nation’s refining capacity is now shut off, since refineries outside of the Houston area have also closed in anticipation of the storm. Nearly 80 percent of rigs and manned platforms in the Gulf have also been evacuated and shut down.
Refining isn’t the only issue. Extensive damage to the port of Houston would cut into the nation’s ability to import oil, as well, says Mr. Bullock.
The longer a cleanup takes, the more affected the rest of the country will be. Indeed, gas supplies could grow so tight that pipelines bringing oil and gas from the Gulf to the coasts may have to be reversed – a difficult, but doable engineering feat – in order to ensure gasoline supplies in the interior third of the US, says Bullock.
Next an update from Minerals Management Service (MMS)
…the government agency, which tracks offshore operations, estimated that 596 of the
717 manned production platforms – about 83.1% – remained evacuated in the wake of Hurricane Gustav earlier this month and in advance of Hurricane Ike.
As of Friday at noon ET, 96.9% of crude oil production and 93.3% of natural gas production in the Gulf of Mexico was shuttered, according to the Department of Energy. (emphasis added).
The Department of Energy announced Thursday that it loaned 130,000 barrels of oil from the Strategic Petroleum Reserve (SPR) to Placid Oil’s Port Allen refinery along a Shell pipeline in Louisiana and an additional 250,000 barrels of oil from the SPR to Marathon Petroleum Company’s Midwest refineries along the Capline pipeline system. The companies had requested the oil due to disruptions from Hurricane Gustav.
The SPR is a 700-million barrel government-controlled reserve of crude oil.
The government released a preliminary Gustav damage report that said approximately 677 of 3,800 production platforms in the Gulf were exposed to hurricane conditions. One small platform off the coast of Louisiana was destroyed, according to MMS, and five platforms “received moderate damage,” the statement said
My dad and two of my uncles were Texaco men – so long ago that I wouldn’t make mention were it not a fairly pleasant way to tell you that I understand a great deal more about the weather than I do oil production and will turn the comments here over to others.