Storm Takes Toll at the Pump, Curbs Energy Production

Hurricane Ike pulverized the Gulf Coast with maximum winds of about 100 mph and left a wide swath of flooding and devastation in its wake.
By Nancy Trejos and Spencer Hsu
Washington Post Staff Writers
Sunday, September 14, 2008

It didn't take long for consumers to feel the impact of Hurricane Ike at the gas pumps.

Nationwide, the average price per gallon of regular unleaded gas jumped to $3.73 yesterday from $3.68 the day before, as about a quarter of U.S. energy production remained out of commission.

In the District, the price climbed from $3.68 to $3.74. In Maryland, it was $3.57, compared with $3.52 the day before. And in Virginia, it soared from $3.54 to $3.63.

Across the country, particularly near the storm's path, there were reports of price gouging as retailers wondered when their next shipments would arrive. John B. Townsend II, a spokesman for AAA Mid-Atlantic, said some areas saw gas prices climb by as much as $1 because of the shutdown of offshore platforms and drilling rigs along the Gulf of Mexico and oil refineries. There were reports of prices topping $4 in the Carolinas, he said.

Along the Gulf Coast, "prices have jumped in some cases to $5, and that's unconscionable," he said.

Nonetheless, Townsend said consumers should not be surprised if gas prices reached record highs, as they did over the summer. "I think that for some consumers, depending on where they are, in time you may see the return of $4 gas," he said.

In brief comments at the White House yesterday morning, President Bush warned against price gouging.

"The Department of Energy, the Federal Trade Commission and, I know, state authorities will be monitoring gasoline prices to make sure consumers are not being gouged, make sure consumers are being treated fairly," he said.

The nation's leading oil producers, including Exxon Mobil and Shell, said it was too early to assess the damage to its refineries and other operations, but power outages were proving to be a vexing problem for refiners all across the region. For instance, Valero Energy, the nation's largest refiner, reported that power was out at its Houston, Texas City and Port Arthur refineries, which it had closed in anticipation of the storm. The company said last night that assessment crews found no significant structural damage to the facilities.

The storm also led to the shutdown of several pipelines, including Colonial Pipeline, which transports fuel from the Gulf Coast through cities along the Eastern Seaboard, including some in central Virginia and Maryland. Steve Baker, a spokesman for Colonial, said that the company's Houston area stations had lost power and that two pipelines, one carrying gas and one carrying distillates such as diesel fuel and home heating oil, were shut down.

The Interior Department's Minerals Management Service said it had confirmed reports of two drilling rigs adrift in the central Gulf of Mexico. The agency, along with the U.S. Coast Guard, was monitoring the paths of the rigs.

The latest disruption comes on the heels of Hurricane Gustav, which also forced oil companies to curtail production.

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