Officials in Gulf of
Mexico Area Say They're Worried about Winter Natural Gas Shortages
September 14, 2005 — By H. Josef Hebert, Associated Press
BATON ROUGE, La. — It may take months
to resume full natural gas production after Hurricane Katrina, top Bush
administration officials said. They're worried about shortages in the
coming cold weather because, unlike with heating oil and gasoline, the
country lacks the ability to make up the difference with imports.
"There are concerns about the supply of natural gas," Energy Secretary
Samuel Bodman said Tuesday, a week after an agency in his department
predicted that natural gas prices in some parts of the country will be
71 percent higher than they were during the last cold season.
Bodman and Interior Secretary Gale Norton took a helicopter tour of the
Gulf of Mexico to observe the damage to oil platforms and flew over the
Louisiana Offshore Oil Port, the terminal in deep waters miles
(kilometers) offshore where huge oil tankers drop their cargos.
Evident that the recovery of the region's oil production facilities is
incomplete, at least half a dozen tankers were anchored near the port
waiting to disgorge their cargos. The facility, known as the LOOP,
returned to full operation just this past weekend.
Norton said 90 percent of the Gulf oil platforms "will be capable of
production by the end of the month." But she emphasized that widespread
damage remains at onshore facilities that will hamper production beyond
then.
Bodman and Norton visited one of the Strategic Petroleum Reserve
facilities from where the government is providing oil to several
refineries to compensate for supply losses. They then went to an
ExxonMobil refinery near Baton Rouge, Louisiana, which escaped damage
from the hurricane but has needed government oil to continue production.
Bruce March, the refinery's manager, said about 20 percent of its crude
is coming from the government stockpile. The refinery, the second
largest in the country, scaled back production briefly after the
hurricane hit two weeks ago but is again in full production, March said.
Norton said that 58 percent of Gulf oil production remains shut down, as
does 38 percent of the region's natural gas production.
Both Cabinet members are worried about coming supplies of natural gas.
About one-third of the Gulf's natural gas production was disrupted by
the hurricane.
Bodman said "there is less known" about the extent of damage to
underwater natural gas pipelines, and it is uncertain when those
facilities will be up in full operation. He said it could be several
months before the region's natural gas system recovers.
While the loss of oil production is being made up from government
reserves and foreign supplies, there is no such backstop for natural
gas.
"We don't have an international market" that the country could rely on
for additional supplies as it does with oil, Norton said.
Last week, the Energy Information Administration estimated that natural
gas prices would soar this winter because of the hurricane, including
increases as much as 71 percent in parts of the Midwest.
Bodman and Norton met with senior executives from two dozen energy
companies Monday night in Houston. The executives said they needed
government help to arrange housing for thousands of employees as they
struggled to return the Gulf's oil and gas system to full operation, he
said.
Source: Associated Press |