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10/20/2017 1:01:18 AM
9/22/2017 12:11:25 AM
Posted: 9/21/2005 11:54:30 AM EDT
[Last Edit: 9/21/2005 11:58:40 AM EDT by jmzd4]
money.cnn.com/2005/09/21/news/economy/rita_threat/index.htm

The timing and strength of the latest storm could cause worse spike at the pumps than Katrina did.
September 21, 2005: 2:43 PM EDT
By Chris Isidore, CNN/Money senior writer




Hurricane Rita could cause a new gas price spike if as expected it hits the Texas Gulf Coast Friday or Saturday.



NEW YORK (CNN/Money) - Remember when gas spiked to $3-plus a gallon after Hurricane Katrina? By this time next week, that could seem like the good old days.

Weather and energy experts say that as bad as Hurricane Katrina hit the nation's supply of gasoline, Hurricane Rita could be worse.

Katrina damage was focused on offshore oil platforms and ports. Now the greater risk is to oil-refinery capacity, especially if Rita slams into Houston, Galveston and Port Arthur, Texas.

"We could be looking at gasoline lines and $4 gas, maybe even $5 gas, if this thing does the worst it could do," said energy analyst Peter Beutel of Cameron Hanover. "This storm is in the wrong place. And it's absolutely at the wrong time," said Beutel.

Michael Schlacter, chief meteorologist at Weather 2000, said Rita now appears most likely to hit between Port Arthur and Corpus Christi, Texas, sometime between Friday afternoon and Saturday morning.

Just about all of Texas's refinery capacity lies in that at-risk zone. (For a look at CNN.com's coverage of Hurricane Rita, click here.)

"There is no lucky 7-10 split scenario to use a bowling analogy," he said. "If you're [a refiner] within 200 miles, you're going to feel the effect."

Compounding Katrina's impact
When Katrina hit, 15 refineries, nearly all in Louisiana and Mississippi, with a combined capacity of about 3.3 million barrels a day were shut down or damaged, according to the Energy Department. That represented almost 20 percent of U.S. refining capacity.

Within a week, almost two-thirds of that damaged capacity had resumed some operations, according to the department. But four refineries with nearly 900,000 barrels a day of capacity are still basically shut down.

If Rita hits both the Houston-Galveston area, as well as the Port Arthur-Beaumont region near the Texas-Louisiana border, that could take out more than 3 million barrels of capacity a day, according to Bob Tippee, editor of the industry trade journal Oil & Gas Journal in Houston.

"Before Katrina, the system was already so tight that the worst-case scenario was for a disruption that took 250,000 barrels of capacity out of the picture. That would have been considered a major jolt," said Tippee.

"We're already in uncharted territory now. We can't project what happens from another shot the size of Katrina or worse."

Part of the problem is that skilled crews needed to make refinery repairs are already busy trying to fix the Katrina damage. That would extend recovery time from Rita.

"[Rita] could have a significant impact on supply and prices -- this really is a national disaster," Valero Energy (Research) CEO Bill Greehey in an interview with Reuters Tuesday evening.

Gas not the only concern
Problems could spread beyond the gas pumps.

Tippee said that natural-gas prices could see a further spike, since so many of the offshore platforms off of Texas produce natural gas, not crude oil.

And while gasoline imports have helped bring gas prices down from record highs, there isn't as much potential for heating-oil imports, he noted.

"Gasoline tends to obscure everything, especially since we aren't paying heating bills right now," said Tippee. "But we were already looking at a winter fuel problem. We're about to take another hit that will cause a lot of problems."

Schlacter said even the oil platforms off the Louisiana Gulf Coast, which are not likely to take a direct hit from Rita, could be affected by large waves churning up the Gulf of Mexico as the storm passes to the south. Waves of as much as 40 to 50 feet could hit the platforms off the Texas Coast, he estimated.

Tippee said that production across the Gulf is already being affected by oil companies pulling workers off platforms ahead of the storm. And it's not just domestic oil being interrupted.

The Louisiana Offshore Oil Port (LOOP), the nation's largest gateway for overseas oil, stopped accepting deliveries of its 1.2 million barrels of oil a day Wednesday afternoon due to high seas, LOOP spokeswoman Barb Hesterman told Reuters. She said the disruption was expected to be "for a short time."

But if Katrina is any guide, it could take several days after Rita passes for production to resume even at oil and gas platforms that escape damage.

"There were several days where if you could have gotten out to the platform, you could have started it back up, but you couldn't find the boats or helicopters you needed to get back to the platforms," he said.

For a look at more stories about this year's oil crunch, click here.

Link Posted: 9/21/2005 11:55:22 AM EDT
I've only used 1/8th of a tank in three weeks, so I'm not terribly worried. I feel bad for the poor bastards who commute all the time like I used to.
Link Posted: 9/21/2005 11:55:39 AM EDT









Link Posted: 9/21/2005 11:59:20 AM EDT
damn

better fill up.....
Link Posted: 9/21/2005 12:00:30 PM EDT
This is gonna suck, my whole job is just driving around.
Link Posted: 9/21/2005 12:00:38 PM EDT

Originally Posted By fight4yourrights:
head.gif head.gif head.gif head.gif head.gif


head.gif head.gif head.gif head.gif head.gif


head.gif head.gif head.gif head.gif head.gif





+1
I drive 20 miles to work, 40 mile round trip.
Link Posted: 9/21/2005 12:05:44 PM EDT

Originally Posted By ALPHAGHOST:
damn

better fill up.....[V]



So I guess this is why there are long lines at the pumps AGAIN today???
Link Posted: 9/21/2005 12:07:01 PM EDT
Dammit I'm going to O.C. Maryland next weekend and was hoping gas would stay at a resonable price till after but Darwin is an asshole.
Link Posted: 9/21/2005 12:10:44 PM EDT
I'm glad I don't have a F250 or a Suburban.
Link Posted: 9/21/2005 12:13:46 PM EDT
Well, since it looks like a bunch of states attorney generals are gearing up their investigations and pursuing claims of proce gouging for the last round of media induced profiteering, I would suspect that it would only add fuel to the fire.
Link Posted: 9/21/2005 12:24:08 PM EDT
Just picked up some 5G gas cans and filled them up with
my "cheap" $2.97 regular unleaded.
Link Posted: 9/21/2005 12:35:42 PM EDT
Ok I call bullshit. There have been hundreds of hurricanes before these two. Not once before did gas go up a dollar. It might have went up 25 cents a gallon. We were all fine and the price increases were normal up until $1.70 a gallon a year ago and then the prices went crazy.

This is not normal economy pricing. Someone is getting rich here point blank. This is pathetic because they could drop prices to $1.85 tomorrow and they would still be in business. What is the deal with no new refineries? BUILD MORE REFINERIES!!!!!!!!!!! Who cares about the EPA rules? They were made so they can be broken!!!!! A new refinery or two would be less than the price hike we are paying to work the hell out of a few refineries.
Link Posted: 9/21/2005 12:44:09 PM EDT
[Last Edit: 9/21/2005 12:44:52 PM EDT by Alien]
s
Link Posted: 9/21/2005 12:45:21 PM EDT

Originally Posted By TheCynic:

Just picked up some 5G gas cans and filled them up with
my "cheap" $2.97 regular unleaded.




So, how much did you spend on those cans?
Link Posted: 9/21/2005 12:45:32 PM EDT
[Last Edit: 9/21/2005 12:54:47 PM EDT by Blued-Steel]
Sounds like the oil industry should be able to follow the .govs example. Springfield Armory allowed International Harvester to build M1 Garands to get the manufacture of small arms away a possible coastal attack.

Edited to add: Sorry about the extra posts below guys, I'm not quite sure how I did it and it won't let edit it saying "page not found"
Link Posted: 9/21/2005 12:46:02 PM EDT
[Last Edit: 9/21/2005 12:55:45 PM EDT by Blued-Steel]
edit to get rid of accidental extra post.
Link Posted: 9/21/2005 12:47:01 PM EDT
What's the incentive for refiners to build more refineries? That would just increase supply and reduce prices in the market. Our demand for gas doesn't change based on the price (it's inelastic). If the demand followed supply as it does with some products,then building more refineries would boost sales for an individual company,which would encourage more refiners to build refineries. The problem is that additional supply doesn't really do that in the short term,only in the longer term as people buy less efficient vehicles. Now that we all drive inefficient vehicles,we're stuck with our high demand.
Link Posted: 9/21/2005 12:49:39 PM EDT
[Last Edit: 9/21/2005 12:55:21 PM EDT by Blued-Steel]
edit to get rid of accidental extra post.
Link Posted: 9/21/2005 12:51:02 PM EDT
[Last Edit: 9/21/2005 12:55:13 PM EDT by Blued-Steel]
edit to get rid of accidental extra post.
Link Posted: 9/21/2005 12:55:21 PM EDT
Time to buy a sport bike.
Link Posted: 9/21/2005 12:57:45 PM EDT
Hate to see what diesel's gonna go for and whether its gonna be short again!
Link Posted: 9/21/2005 1:00:53 PM EDT

Originally Posted By fight4yourrights:
So, how much did you spend on those cans?



$7/per. So it ain't going to save me money unless gas goes
to $4.50 a gallon, but it is nice to have a way to store gas
short-term ahead of potential problems.
Link Posted: 9/21/2005 1:03:07 PM EDT

Originally Posted By afman91201:
Ok I call bullshit. There have been hundreds of hurricanes before these two. Not once before did gas go up a dollar.

This is not normal economy pricing. Someone is getting rich here point blank. .



I fully understand supply and demand and all that, but I agree with you - its BS.

However, I more think its due to media hype.

First, remember who the media loves - Al Gore and the DemonRATS.

Then remember how in his book "Earth in teh Balance" AL GOre looked forward to the days of $5.00 / gal gas - FORCING us to consume less.

The Marxist left is exploiting the hurricanes to get their social agenda in place.

Anyone got any more tinfoil? I don't think my hat here is thick enuf....



Link Posted: 9/21/2005 1:07:12 PM EDT
Luckily the city pays for the gas in my CrownVic which by the way gets around nine miles per gallon. Looks like we arent doing any joy riding in my Silverado for a while.
Link Posted: 9/21/2005 1:08:44 PM EDT
So, is now a good time to panic?

Link Posted: 9/21/2005 1:10:28 PM EDT
WE'RE ALL GONNA DIE!!!!

Already in Atlanta the sheep are lining up to get their gas.

TYPICAL.
Link Posted: 9/21/2005 1:12:59 PM EDT
Well it is rediculous. The price went up steady for years and in 2002-2003 it made it up to $1.39, in 2003-2004 it made it to $1.69, in 2004 to 2005 it stayed about the same at $1.79, and now within 9 months it has went to $3.35 Hello is that DOUBLE? Yes someone is getting rich and exploiting us.

Free market exists because of competition. If eggs price at one supplier double then they loose business. Someone else picks up their business and all is well and the only true price increases are for normal inflation. This is true with all items except gas. There is one little group of people selling this stuff and they are bastards.
Link Posted: 9/21/2005 1:18:25 PM EDT
Suggest a fire mission on GOP Reps and Senators. To expand drilling in Utah and Alaska. If we do this lets focus our collective efforts on a few politicians.??? What do you think??????
Link Posted: 9/21/2005 1:24:14 PM EDT

Originally Posted By afman91201:
Ok I call bullshit. There have been hundreds of hurricanes before these two.



When was the last time that 70% of the LA,AL,MS refining
capability (~2 MBD total) were knocked off line for weeks?

Oh, right, never...

Now we have another storm bearing down on an area that
produces upwards of 4 MBD. I'm shocked that the futures
markets are trending higher...
Link Posted: 9/21/2005 1:39:03 PM EDT
People say these prices are just a part of the free market.

Only one problem -

America is NOT a free market economy. Reality is, we're nearly as socialist as any one of the Yuro peon countries.



Link Posted: 9/21/2005 1:48:14 PM EDT

Originally Posted By garandman:
America is NOT a free market economy. Reality is, we're nearly as socialist as any one of the Yuro peon countries.



You just put into words what I have been trying to get people to recognise for years now.
Well said.
Link Posted: 9/21/2005 1:50:53 PM EDT
When the raise the gas prices bandwagon comes around (media hype), every person that has anything to do with selling fuel will jump on it. Even if they don't need to. I'm about fucking sick of that. I agree with afman91201.
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