Gulf Coast Oil Industry Repairs to Cost Billions
STEVE INSKEEP, host:
The business news starts with the slow recovery of offshore oil drilling. Federal officials say it will take until next year for oil and gas drilling here along the Gulf Coast to recover from Hurricanes Katrina and Rita. Interior Secretary Gale Norton offered a preliminary assessment of the storms' damage, and NPR's Scott Horsley reports this morning.
SCOTT HORSLEY reporting:
Of some 4,000 drilling platforms in the Gulf of Mexico, more than 3,000 sat in the path of the hurricanes. While more than a hundred older platforms were damaged or destroyed, most of the newer facilities weathered the storms intact. Even so, Interior Secretary Gale Norton says it will take another 10 days to get people back on all the manned platforms, weeks to make even minor repairs, and months to undo the worst of the hurricanes' damage.
Secretary GALE NORTON (Interior Department): We have no official estimates of the dollar value of the damage and the amount that it will cost to repair those facilities, but it will clearly be in the billions of dollars.
HORSLEY: The number two oil company, BP, said yesterday the storms trimmed an estimated $700 million from its third-quarter profits. Chevron says Katrina alone reduced its profits by some $350 million. As of yesterday, 90 percent of the Gulf's oil production remained shut down, along with more than 70 percent of its natural gas. Norton says even though most of that production will eventually come back, the storm damage points up the need to find sources of oil and gas in regions other than the hurricane-prone Gulf.
Sec. NORTON: We have put so many of our eggs in one basket, and with a strong push from Katrina and Rita we have now dropped the basket. While we work to restore Gulf production to pre-Katrina levels, we must not lose sight of the fact that diversification of our nation's energy supply is a key goal for this administration. It must remain a top priority for our nation's economic and national security.
HORSLEY: In the meantime, Norton renewed the administration's call for conservation by consumers of both gasoline and natural gas.
Scott Horsley, NPR News.
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