Effects on US Energy Supply, Energy News, ET EnergyWorld

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Companies evacuated oil and gas rigs in southern Louisiana before Hurricane Ida, but a far greater concern was potential damage to refineries and petrochemical plants on the predicted path of flooding and storm surges.

Nearly 300 offshore platforms – half of the manned platforms in the Gulf of Mexico – were evacuated before the storm, with production temporarily halted, the US Bureau of Environmental Safety and Enforcement said. on its website. The floating platforms were also cleaned. In total, more than 80% of the Gulf’s oil and gas production has been halted, the agency said.

But a potentially more serious concern was the fate of refineries and petrochemical plants along the Mississippi River between Baton Rouge and New Orleans in or near the predicted track of a storm whose maximum sustained winds are expected to reach 130 mph ( 209 km / h) on intended landing. late Sunday.

Louisiana’s 17 oil refineries represent nearly a fifth of the nation’s refining capacity and can process. More than 4 million barrels of refining capacity were at risk, said Richard Joswick, director of S&P Global Platts Analytics.

The Energy Information Administration said Ida could affect local energy supply – especially fuel and electricity for transportation. Its maps show more than a dozen factories along the petrochemical corridor vulnerable to flooding.

It is less clear whether the domestic fuel supply could be affected. The daily oil consumption of the United States is just under 20 million barrels per day. Analysts said it was too early to tell, although Platts said the storm could halt 765,000 barrels per day production in the Gulf.

Joswick of Platts said any impact on Ida’s oil prices would likely be most acute for gasoline, but it could be expected to return to pre-storm levels in one to three weeks. .

It was not immediately clear how many refineries and petrochemical plants could be closed.

Phillips 66 was halting production at its refinery in Mississippi, just south of New Orleans in Belle Chasse, Louisiana, in part because of “storm surge potential,” the company spokesperson said, Bernardo Fallas. Its daily capacity is 250,000 barrels.

Exxon Mobil said its Baton Rouge refinery, which produces approximately 520,000 barrels of crude per day, continued to operate while Chevron said it shut down operations at the Mississippi River and Gulf Coast terminals and their systems. related pipelines. Shell, Marathon and Valero also have refineries close to the storm’s predicted path.

“The industry has experienced this perhaps too often over the past few decades,” Peter McNally, energy analyst at Third Bridge, said of the hurricane. Several refineries in Lake Charles, west of Ida’s predicted track, suffered wind damage from Hurricane Laura almost exactly a year ago.

Meteorologist Jeff Masters, who piloted hurricane missions for the government and founded Weather Underground, said Ida is expected to pass through “the worst place for a hurricane.”

While refineries and petrochemical plants are typically built to withstand high winds, they are not necessarily prepared for high water, a growing problem as global warming results in more rainfall during major storms.

McNally said the industry is most concerned about the flooding, which caused so much damage in 2017 with Hurricane Harvey in the Houston area, where petroleum products were spilled on flooded tankers and chemical plants.

“Louisiana is low, so you’re prone to flooding. These things are built to withstand winds, but you have a harder time dealing with flooding,” he said.

Sixty percent of the gasoline used on the east coast is shipped from the Gulf Coast, much of it through the Colonial Pipeline, which sits on Storm’s Path.

In addition to oil production, Louisiana accounts for 9% of US natural gas yields. Last year, the state’s two liquefied natural gas export terminals shipped about 55 percent of total U.S. LNG exports, according to the Energy Information Administration.

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Science writer Seth Borenstein in Kensington, Maryland, contributed to this report.


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