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Oil Industry Waits to Assess Storm's Impact
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However, in the earlier storms, underwater pipelines were also damaged, and that could delay the restart of offshore production even if platforms are in satisfactory condition.
Kevin Kolevar, assistant secretary of Energy, said that a category 3 hurricane was well within the design specifications for offshore drilling platforms and that production could resume quickly if there is no significant damage to platforms or undersea lines. "We don't see any indication of [significant damage] at this time, but we'll learn more tomorrow as companies start repopulating facilities," Kolevar said.
"The onslaught of Gustav reemphasizes the importance of the Gulf of Mexico energy complex and the importance of building resilience and flexibility into our energy security system," said Daniel Yergin, energy historian and chairman of Cambridge Energy Research Associates. "That means diversification."
But the United States has become increasingly dependent on the Gulf Coast. Forty percent of the nation's oil refineries are along the coast.
Some individual companies rely heavily on production in the Gulf. Shell Oil, the U.S. affiliate of Royal Dutch Shell Group, gets about 80 percent of its U.S. production from the Gulf of Mexico. So far this year, BP has been producing an average of 290,000 barrels a day in the Gulf, a company official said.
Oil companies were playing a game of wait and see yesterday. BP spokesman Darren Beaudo said the company hoped to fly over the eight offshore platforms it operates in the Gulf. "Tomorrow will give us more information," he said.
Although oil traders breathed a sigh of relief yesterday, Lehman Brothers' oil analysts warned last week, "even if this storm misses major infrastructure in the Gulf Coast, other storms pose risks this season."
