We are still in the phase of finding out, after Rita's landfall, exactly what the level of damage will be. Today's MMS report
has 100% of the oil shut down with 81% of the platforms still evacuated
and 68% of the rigs. The 17-miles of road leading to the LOOP terminal
are still underwater. One can take the Valero comment that it will take between two weeks and a month for repairs to be completed at their refinery at face value.
Further it is not unreasonable to expect that there may be serious off-shore damage
Energy
Industry analyst Jon Kilduff of FIMAT told CNN there are reports of
some missing semi-submersible offshore rigs, but no details were
available.
Kilduff said that, even in the best case scenario, it will take "10 to
14 days" days to return refineries to full operations. He warned that
structural damage is not the only concern; refineries depend on
electrical power that may have been affected by the storm.
The news from the Houston Chronicle that tankers were being brought in to ensure that
existing gasoline supplies get distributed is encouraging.
The north Houston and Pasadena terminals that supply Shell stations
were open again today with enough gasoline to fill up at least 30
tankers with 270,000 gallons of fuel. The tanker drivers have
instructions to start with gas-needy I-45, I-10 and Highway 290.
Exxon Mobil was bringing in tanker trucks from as far away at New
Jersey and Illinois. Company officials said they delivered 531,000
gallons of gasoline to 14 retail stores in the Houston area on
Saturday, the equivalent of the normal daily demand for the entire
Houston market.
If the refineries are down for a month then the already weakened stock positions will get worse. And further, as the Guardian points out, the supplies are not reaching everyone:
The
principal problem was a petrol shortage in an area that is usually the
hub of the US oil industry. Long lines of cars formed outside Houston
petrol stations yesterday. The shortage also affected salvage work. In
Port Arthur, where the levees stood up to the storm surge but
torrential rain left extensive flooding, a policeman said the local
force was hamstrung by shortages.
"We've got no gas. We're just about ready to burglarise some of the
transport businesses to get some," said the officer, who did not want
his name used.
"We're attempting to find fuel wherever we can," a police spokeswoman,
Wendy Billiot, said, confirming that petrol could be commandeered. "If
it's necessary, we are considering that option."
We should now be seeing the refineries starting to produce the heating
oil for the winter. If a significant part of that possible production
has to be redirected to the production of gasoline then that heating
oil stock build-up will not take place.
And in this regard I think I would rather be called wrong by suggesting
that there may be a problem with heating oil this winter as a result,
than sit complacently saying that there won't be a problem, The United
States is, I believe, the only nation that stores most of its fuel in
crude form, rather than as refined product, and that means that if the
refineries can only produce at a certain rate, if the reserve stocks
aren't there then it is going to be a cold winter. I think it might be
better to know that now, that when calling the fuel oil salesman in
December, only to be told that there isn't any.
