Hurricanes wiped out boats, docks; stalling recovery: Dallas Fed

Washington (Platts)--19Oct2005

An unlucky choice of staging areas to service offshore rigs and platforms
may be one of the culprits behind the energy industry's inability to quickly
recover production following the twin blows of Hurricanes Katrina and Rita,
the US Federal Reserve Bank of Dallas said in its latest look at Gulf Coast
states' economies.
     "Katrina's damage to Louisiana's staging areas for the Gulf forced the
industry to move its logistical base to Cameron[, Louisiana], which was wiped
out by Rita," the Dallas Fed noted in its "Beige Book" released Wednesday.
"Loss of docks, boats, warehouses and equipment has hampered repairs in the
Gulf. The repair effort will create jobs for diving companies, supply boats
and helicopter transportation for months or years to come."
     The Fed also noted that the hurricanes' damage to the energy complex has
begun to spill over into other industries, notably chemical manufacturers.
Immediately after Rita, the Fed noted, 90% of the region's chemical plants
were closed, creating a drop in demand that permitted normal storage
injections. As the chemical plants re-open, the Fed said, they are having
trouble obtaining gas as a feedstock. 
     "A lack of basic inputs is keeping a number of chemical plants on partial
or complete shutdown," The Dallas Fed said. "Contacts say the actual damage to
these plants is not serious. The system is unbalanced for a number of
products, pushing up costs and prices."
     According to the Dallas Fed, the situation has pinched chemical supplies
and chemical manufacturers are raising prices and rationing production on
products such as ethlyene propylene and a host of plastic products.
                                     ---Bill Holland, bill_holland@platts.com

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