WASHINGTON, 7 September 2005 — The oil industry in the southern United States showed signs of life yesterday as authorities strained to get refineries, ports and shipping channels back up a week after Hurricane Katrina.
The Mississippi river, one of the biggest arteries for US goods, was slowly reopening to shipping, at least to military vessels conducting one of the biggest relief operations in US history.
Gary LaGrange, chief executive of the Port of New Orleans, said the US Department of Transportation was providing several ships to house 1,000 essential port workers temporarily. “In the next several weeks, almost all of the Port of New Orleans will be dedicated to military relief vessels,” he said. “In the next week to two weeks, commercial vessels will return once electrical power and manpower arrive.”
Three oil refineries on the Gulf of Mexico coast were restarting operations and another four were expected to do so soon, the Department of Energy (DoE) said.
Six refineries in the states of Alabama, Louisiana and Mississippi remained shut. Another six were operating with oil supplied from the US government’s Strategic Petroleum Reserve.
The United States is releasing 300 million barrels of crude oil from the emergency reserve, and its industrial partners another 300 million in a coordinated move that has helped to put a cap on surging oil prices.
As global markets calm and oil supplies resume from the hurricane-hit south, motorists’ organizations reported that US gasoline (petrol) prices were stabilizing after a spate of panic buying last week on the back of a big spike. “Higher gasoline prices are likely to weigh somewhat on consumer sentiment, especially among lower-income consumers, which could diminish growth going forward,” Wachovia economist Jason Schenker said.
However, Katrina’s imact on the US economy overall would prove “significant but not catastrophic, a he said.
The DoE said the Colonial pipeline network was fully back up, pumping a daily average of 95 million gallons (360 million liters) of fuel and heating oil to eastern US cities including New York and Washington.
The Louisiana Offshore Oil Port, a massive terminal for supertankers which lies in the Gulf of Mexico off New Orleans, was nearly back to full capacity but one storage facility lacked power.
Oil drilling operations in the Gulf of Mexico, which normally supply a quarter of US crude, are also getting better, the federal Minerals Management Service said.
Late Monday, 69.57 percent of daily crude production and 54.13 percent of natural gas output in the region was still offline, with 265 platforms and rigs evacuated, it said.
That is a marked improvement on the situation immediately after Katrina swept through, when Gulf production ground to a virtual halt.
Less than 990,000 customers remain without electricity in Louisiana and Mississippi, down from a peak of 2.7 million just after Katrina hit, the DoE also said.
