Sixth District Energy Updates: Hurricane Gustav

September 8, 2008

The Federal Reserve Bank of Atlanta's Research Department produces updates on the impact of recent tropical cyclone activity on the Gulf of Mexico and the coastal area's energy sector. These reports are developed from a variety of publicly available resources and are updated as events dictate.

photo of power lines
•  Power outages pose one of the biggest challenges to Louisiana's energy industry.
•  In Louisiana, 18 percent of customers remained without power as of Sunday morning. Electricity has thus far been restored to more than 975,000 (or 37 percent of total) customers who lost power during Hurricane Gustav.
Entergy Corp. estimates that electric power will be restored to New Orleans customers by tonight. Full power restoration is expected to take several weeks.

photo of a man pumping gas
Oil and Gas Production
•  On Friday the Department of Energy (DOE) reported that infrastructure assessments were continuing and that there had been no reports of damage to pipeline or production infrastructure.
The Minerals Management Service reported that approximately 80 percent of oil production and 70 percent of natural gas production in the Gulf remained shut in on Sunday morning, down from 100 percent of crude and 95.4 percent of gas production that was shut in after the storm.
Personnel remain evacuated from 28 percent of the manned platforms and from 8.3 percent of rigs in the Gulf.

photo of an oil platform
•  Even without damage, shut-down refineries can take a week or more to return to normal operations.
Because of the consequences of Hurricane Gustav and the pending shortages expected from Tropical Storm Hanna, the Environmental Protection Agency and the DOE issued an emergency fuel waiver on Sept. 5, removing the 7.0/7/8 RVP maximum and ethanol additive for the states of Alabama, Florida, Georgia, Louisiana, and North Carolina through Sept. 15.
The DOE reported that six refineries in Louisiana remained shut down on Sept. 6, representing more than 300,000 barrels per day of gasoline output and 200,000 barrels per day of distillate fuel output. Another six refineries had reduced their crude throughput.

photo of a shipping port
Ports and Pipelines
•  Temporary generators continue to supply power and compression at Henry Hub, and gas is flowing.
The Plantation pipeline has full commercial power. Colonial pipeline is operating on reduced flows. Centennial pipeline is back to normal operations.
Electrical power has been restored to all Strategic Petroleum Reserve sites.
  The U.S. Coast Guard reported on Sept. 7 that the Gulf Intracoastal Waterway is fully open. The Inner Harbor Navigation Canal in New Orleans and the Mississippi River are open for limited use.