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Storm Takes Toll at the Pump, Curbs Energy Production
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"The problem is we don't really know how long it will take to get the refineries back up because of so many power outages," said Edward L. Morse, managing director and chief energy economist at Lehman Brothers.
The storm illustrated the region's significance to the nation's oil supply. About 40 percent of U.S. oil refining capacity lies along the coast, with about 23 percent along the Texas Gulf Coast.
As of yesterday afternoon, 99.7 percent of the oil production and 98.5 percent of the natural gas production in the gulf were shut down, according to the Minerals Management Service. Oil production from the gulf is estimated at 1.3 million barrels per day, while natural gas production is estimated at 7.4 billion cubic feet per day.
Personnel had been evacuated from 611 production platforms, or 85.2 percent of the manned platforms in the gulf, and from 101 rigs, or 83.5 percent of the rigs.
Officials from the Energy Department said 14 of 17 oil refineries on the Texas coast between Corpus Christi and Beaumont were shut down, and the rest were on reduced runs.
Concerned about gasoline availability and prices, Bush said the Environmental Protection Agency has temporarily waived some provisions in 12 states across the region so that they can import gasoline from abroad that normally would not meet some U.S. requirements.
U.S. officials said hurricanes Ike and Gustav landed a weaker one-two punch against the nation's energy and petrochemical sector than Katrina and Rita delivered in 2005.
This year's Gulf Coast hurricanes were more threatening because they came over a span of 12 days, rather than 26 days, hitting a weakened infrastructure still limping back to production.
But the storms were weaker, industry preparations were stronger, and many of the most vulnerable offshore facilities damaged in 2005 were not restored, said Kevin P. Kolevar, assistant secretary of energy for electricity reliability and energy delivery.
"I can't think of any estimate or damage as to offshore facilities that caught my attention," Kolevar said. He added: "We didn't have the kind of damage [from Gustav] to the refinery sector that we did from Rita, and they have been recovering faster than they did in 2005."
