Energy Industry Dodges Rita's Bullet
LIANE HANSEN, host:
From NPR News, this is WEEKEND EDITION. I'm Liane Hansen.
The rains and diminished winds of Hurricane-turned-tropical-depression Rita moved out of Texas and Louisiana and into Arkansas today. Officials along Rita's wake urged millions of evacuees not to return home as efforts are launched to help survivors of the storm and to assess the extent of the damage caused by Rita. One person has been reported killed, and preliminary reports indicated that oil refineries in the Houston area appear to have escaped serious harm.
The storm took a heavier toll further east along the Gulf Coast toward the Texas border with Louisiana. One energy company predicts it will take up to a month to restart its wind-damaged refinery in Port Arthur, Texas. With gasoline already in short supply, authorities are urging drivers to conserve. NPR's Scott Horsley reports.
SCOTT HORSLEY reporting:
When it comes to the nation's gas pumps, Hurricane Rita could have done worse, but what it did was bad enough. The storm passed to the east of the Houston-Texas City area that's home to 13 percent of the nation's refining capacity. The Energy Department says it's cautiously optimistic those nine refineries were spared serious damage, and Edward Murphy, of the American Petroleum Institute, says they could be making gasoline again within a few days.
Mr. EDWARD MURPHY (American Petroleum Institute): Assuming there is power, there is no damage to the refineries and so on. That would put you sometime around midweek under the best of circumstances that these refineries would be able to come back on board.
HORSLEY: Further east, the wait could be longer. There are four refineries in the Beaumont-Port Arthur, Texas, area--which felt the full force of the hurricane--and three more in Lake Charles, Louisiana, which also took a heavy hit. Together, those areas account for about 10 percent of the nation's refining capacity; that's less than Houston, but still significant. Justin McNaull tracks gasoline prices for AAA and he's been monitoring the storm's path.
Mr. JUSTIN McNAULL (AAA): There's really nowhere along the Gulf Coast that a hurricane can land and not impact refineries. It really will be telling on Monday, and even in the electronic trading on Sunday, where gas prices might be headed.
HORSLEY: Damage assessments in Port Arthur and Lake Charles are still sketchy. Both Motiva and Valero said their refineries in Port Arthur escaped flooding, but had significant wind damage. Valero estimates it will take two weeks to a month to get its refinery in Port Arthur up and running again.
Whatever lasting damage Rita does to refineries will only worsen the crunch caused by Hurricane Katrina. That storm crippled four refineries, knocking out 5 percent of the nation's gasoline-making ability for an extended period. A rush by consumers to buy up scarce gasoline would only make matters worse. Louisiana Governor Kathleen Blanco is one of several public officials who are urging drivers to conserve.
Governor KATHLEEN BLANCO (Democrat, Louisiana): We still can anticipate gasoline shortages. The gasoline supply chain will be compromised pretty seriously. So I'm asking that people in Louisiana don't just do idle driving, do what you can to help us to conserve our own supplies.
HORSLEY: If prices at the gas pump are alarming, just wait for this winter's heating bills. Rita and Katrina have shut down nearly three-quarters of the natural gas production in the Gulf of Mexico and sent natural gas prices to an all-time high. Editor Mark Davidson of the trade journal Gas Daily says customers have been using stockpiled gas to make up for the lost production, but that could come back to haunt them when the temperature drops this winter.
Mr. MARK DAVIDSON (Editor, Gas Daily): It's going to be a brutal winter for heating bills. Unfortunately, I think the gasoline situation, you know, is what's foremost in people's minds and they may not realize that they're going to get slammed by their heating bills in a couple of months.
HORSLEY: There are some encouraging signs on the gasoline front. Exxon said yesterday it's begun trucking gasoline to filling stations in Houston as they reopen. The company's also delivering extra fuel to Dallas, Austin and San Antonio to help supply coastal evacuees as they gas up for the trip back home. Scott Horsley, NPR News.
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