Katrina Cripples 95% Of Gulf's Oil Production
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KATRINA CRIPPLES 95% OF GULF'S OIL PRODUCTION
By Elliot Blair Smith
August 31, 2005
Fearing the worst, energy traders at the New York Mercantile Exchange bid up
futures prices to records. "This is clearly the most panic I've seen," said
Nymex trader Eric Bolling.
Meanwhile, the sky above the Gulf of Mexico filled with private aircraft as
oil and gas executives began to look at the damage.
The gulf accounts for about 23% of the USA's domestic natural gas and 30% of
its oil, according to the U.S. Department of the Interior's Minerals
But the storm interrupted 95% of gulf oil production and 88% of the outer
continental shelf's natural gas production, the agency said.
Moreover, deliveries of foreign oil to the USA's largest offshore oil port,
the Louisiana Offshore Oil Platform, have been suspended since Saturday,
cutting off about 1 million barrels a day of crude.
And Louisiana's Port Fourchon, which normally processes 18% of domestic oil
and gas and 13% of U.S. energy imports, suffered extensive storm damage and
is now inaccessible due to floodwaters, the Energy Department said.
Energy experts said it could be weeks or months before production is fully
restored because a shortage of crude supplies combined with widespread
electricity outages also shut down most of the region's refineries and
A big offshore rig supplier, Noble, said the storm blew one of its giant
platforms 17 miles off its moorings.
Another rig supplier, Rowan, said one of its rigs may have capsized and
The Alabama Port Authority said another rig washed against a pier and a bulk
material handling terminal at the Port of Mobile, causing some damage.
In a touch-and-go rescue before the storm, ENSCO International said efforts
to tow one of its deepwater rigs with several employees aboard about 120
miles south of Louisiana ended when the towline snapped.
Before the storm struck, a helicopter rescued the employees; the rig was
recovered later, ENSCO spokesman Richard LeBlanc said.
Swift Energy President Bruce Vincent said he would deploy small teams of
employees, supported by barges with sleeping quarters and kitchens, to
inspect and restart that company's offshore rigs.
"The bigger issue is the people," Vincent said. "Many people who work
offshore live in southeastern Louisiana, and their homes may have been
affected (by the storm). They have to provide food, shelter and clothing for
Chevron spokesman Mickey Driver said, "It's safe to say the storm has been
of catastrophic proportions. We don't know what (we'll) find when we look at
our facilities. We will hope for the best."
Colonial Pipeline, which normally delivers about 100 million gallons of
gasoline and heating fuel a day on its 5,000-mile transmission line from
Houston to New York, hopes to begin restoring service this weekend, says
spokesman Steve Baker.
Much of the pipeline has been shut down since Monday.
"Getting Colonial back is going to be huge," said John Kingston, global
director of oil at Platts.
But Plantation Pipe Line spokesman Rick Rainey said electric power must
first be restored before that company can restore shipments on its 3,100
miles of pipeline from Baton Rouge to Washington, D.C.
Says Rainey: "We have power and are receiving product from only one of the
seven refineries that are operating in (the Gulf Coast) area."
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