How Katrina Turned Off the Oil

After a severe pummeling from Hurricane Katrina, a big segment of the US energy industry is struggling to get up off the mat. Several major Gulf Coast refineries remained shut Aug. 30, battling pipeline and power outages in the aftermath of the storm.

The amount of lost production is enormous. Roughly 1.9 million barrels per day of the refining capacity on the Gulf Coast was off-line, with many plants down completely and others operating at reduced rates.

Platts has received reports that terminals were running out of product. While the White House's early-morning announcement of Aug. 31 that it's ready to tap the Strategic Petroleum Reserve may offer refiners some relief, the plan's details were still unclear as of 8:26 a.m. ET.

(...)

Refiners are allocating supplies in order to deal with outages, according to Robert Slaughter, president of the National Petrochemical & Refiners Assn. (NPRA). He notes that "people who can't produce may have to cover with spot purchases."

Products terminals are empty or low everywhere from the Mississippi River to the Appalachian Mountains, including Indiana, Ohio, South Carolina, Arkansas, and South Tennessee, according to Dan Gilligan, president of the Petroleum Marketers Association of America.

"There's no unbranded product available. If you aren't a branded station with a terminal contract, you are out of luck," he says. "Some trucks are going to have to travel great distances and sometimes over state lines to find products."

http://www.truthout.org/docs_2005/083105R.shtml