Sixth District Energy Updates: Hurricane Ike

September 15, 2008

photo of an oil platform
The Department of Energy (DOE) reported that 15 refineries in Texas and Louisiana, representing 22 percent of total U.S. refining capacity, were reported shut down. It is unclear how long these refineries will remain offline.
Early assessments note minimal damage to refineries. However, until power is fully restored, production will not return to normal. Most estimates are for full output to be achieved in one to two weeks. In this environment, product supplies will remain tight, and prices could remain elevated. Inventories for gasoline are at their lowest level since 2000.
The DOE has thus far granted a handful of requests for Strategic Petroleum Reserve (SPR) crude from refiners in the wake of Hurricanes Gustav and Ike.
The New Orleans Branch reports that refineries in Lake Charles fared better than expected and that refineries in Baton Rouge and Plaquemine areas are up and running, according to their contacts.

photo of power lines
In Texas, more than 2.4 million people, or 23 percent of the state's customers, were reported without power yesterday morning. Nine percent of customers in Louisiana and 10 percent of those in Arkansas were without electricity.

photo of a man pumping gas
Oil and Gas Production
On Sunday afternoon, the Minerals Management Service reported that nearly 100 percent of the oil production and 92 percent of the natural gas production in the Gulf remained shut in.
The New Orleans Branch reports that a contact who spoke with the owner of a private oil company indicated that damage assessments were still under way in south Louisiana. He reports that there will be enough staff to fly out to the rigs by Tuesday to assess the damage, which they believe to be less than anticipated, and should be up and running by the end of next week.

photo of a shipping port
Ports and Pipelines
Major crude pipelines originating in Texas and Louisiana shut down operations in preparation for Hurricane Ike.
As of September 14, the Colonial and Plantation product pipelines, major routes for products going from the Gulf to the East Coast, are operating at reduced rates.
The Louisiana Offshore Oil Port has resumed limited operations and is expected to resume operating its marine offloading facilities today.
Although there have been no reports of damage to natural gas pipelines or production infrastructure, major offshore pipelines remain shut in as a result of evacuations.
Henry Hub remains shut in as a result of the storm surge and intermittent power outages.