Monday, August 29, 2005

the gulf coast

Not to minimize the local, human side of the hurricane story, but some quick facts about this region from an energy perspective could prove very important in the coming weeks:

Approaching Storm Slows Oil Output in Gulf of Mexico
Gasoline prices for consumers may climb further as refining capacity is stretched by the storm. Chalmette Refinery, which is about 10 miles east of downtown New Orleans and processes 190,000 barrels of oil a day, shut down over the weekend. Calls to officials at Chalmette, a venture between Exxon Mobil and PetrĂ³leos de Venezuela, went unanswered on Sunday. Valero Energy said it was shutting down its St. Charles refinery in Louisiana, and Chevron was shutting down a refinery in Pascagoula, Miss., Bloomberg News reported.

Elsewhere, the Louisiana Offshore Oil Port, the nation's largest oil-importing terminal, 19 miles off the coast of Louisiana, stopped receiving crude oil from supertankers on Sunday. Altogether, about 6.5 million barrels of crude oil a day are imported along the Gulf Coast, largely to ports in Louisiana and Texas, while roughly 1.5 million barrels of oil a day are produced in domestic waters in the Gulf of Mexico.

Roughly, the region is an entry point for 1/3 of the daily oil supply for the United States.

While I am not suggesting by any means that the entire Gulf Coast will be affected, strictly in terms of infrastructure, a significant portion of the United States oil supply could be "gone" for weeks, months, or longer. Ten percent gone for at least a month wouldn't surprise me, just as Americans are driving towards gasoline day, (also known as Labor Day).

Call it Psuedo-Peak. The temporary effects will be about the same.


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