Getting the job done

Staff Report
August 24, 2006 at 2:39 pm  | Mobile Reader | Pring this storyPrint 

With the anniversaries of Hurricanes Katrina and Rita fast approaching, broadcasters and news reporters across the country are scurrying for stories.

What's happened in New Orleans and Cameron and St. Bernard and Plaquemines? Where are our people? When are they coming back? Much remains to be accomplished and, with predictions that it could take six to 10 years to recover, it's easy for the media to focus on what's left to be done, rather than progress made.

There's one "good news" story that hasn't yet gotten play, and it certainly should be lauded throughout the country. The Department of Energy (DOE) recently issued a report on the impact of the 2005 hurricanes on the natural gas industry in the Gulf of Mexico, and the story it tells is truly amazing.

In late August of last year, Hurricane Katrina bore down on the toe of Louisiana, and four weeks later Rita churned her way up the Sabine River. The Minerals Management Service estimates that, of the 4,000 production platforms in the Gulf, about 3,050 were in the direct path of one of the two storms, as were 22,000 of the 33,000 miles of pipelines. These platforms and pipelines are responsible for delivering onshore about 10 billion cubic feet (BCF) of natural gas per day—20 percent of the nation's production.

Before, during, and after both storms, reports came in from DOE twice daily, indicating the damage to facilities as well as the reduction in production. Actually, the worst day for natural gas production was August 30, when 88 percent of the production was shut in. For crude oil, the worst was September 25, when 100 percent of the crude was shut in—29 percent of the country's production. The disruptions drove gasoline prices higher and higher, and shortages plagued motorists throughout Louisiana, Mississippi and Texas.

Destroyed—and sometimes "lost"—platforms were reported, with 44 destroyed and 20 damaged by Katrina. Rita actually did more damage, destroying 69 platforms and damaging 32 others.

Onshore, too, the hurricanes threatened the 47 major natural gas processing plants and 17 natural gas liquids fractionation sites across the Gulf Coast. Those plants can process almost 23 BCF per day, and nearly 75 percent of the capacity was shut in by the two storms. In advance of Katrina, 11 oil refineries closed, and 15 were shut down before Rita, reducing gasoline production by about two million barrels a day.

The good news? The oil and gas industry rallied despite what might have seemed to be insurmountable odds and, within six months post-storms, natural gas production had already returned to about 9 BCF per day, and the primary pipelines were filled within normal ranges. All but two of the 47 processing plants were in operation. As of the end of June, 91 percent of the daily gas production was back on line.

Almost all individuals and companies in south Louisiana faced the many hardships of recovery, and those faced by the oil and gas industry were hardly different. The service industry which supports offshore production was devastated; docks and fleets were destroyed; shipping channels were closed; electricity was lost; and transportation fuels weren't available. Workers were scattered, and those who were available had limited necessities such as shelter, food and water. But, all these odds were overcome by an industry that reinvested its manpower and significant resources to assure that the country's energy supply was disrupted for the shortest time possible.

Industry and government worked together at all levels to repair and restore the Gulf Coast's energy facilities. They deserve considerable credit for effective planning, preparation and execution, as do the restoration crews for their tireless efforts under catastrophic circumstances.

LABI Energy Analyst, Ginger Sawyer, contributed to this column.

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