US Gulf Coast power grid still vulnerable to storms: DOE chief

US Gulf Coast power grid still vulnerable to storms: DOE chief

Washington (Platts)--3Aug2006

US Energy Secretary Samuel Bodman said efforts to restore the Gulf
Coast's electricity grid after last year's hurricanes have left him worried
whether the region's power infrastructure can withstand such powerful storms.

He said generally that he was pleased with the government and industry
response to last year's devastating hurricanes, adding that both are better
prepared for this year's season because of work done in the last year.

"My big worry is with the electric transmission lines," Bodman said late
Wednesday on an airplane back to Washington from the Midwest, where he went to
promote Department of Energy efforts on renewable energy since the passage of
the Energy Policy Act last year.

"They had it engineered so they put it back the way it was before,"
Bodman said, adding that if similar storms hit, the impacts could be the same.

In addition to concerns over the reliability of electricity supply to to
homeowners and small businesses, Bodman said natural gas and petroleum product
pipelines that rely on power from the grid could be shut down again as
happened after hurricanes Katrina and Rita.

According to a DOE report released Monday, Hurricane Katrina--a Category
5 storm when it entered the Gulf in late August--destroyed 44 platforms and
damaged 20 others; damaged at least 100 pipelines, and resulted in the shut-in
of at least eight natural gas processing plants. The two storms cut off power
to millions of customers drove up energy prices and crippled oil and gas
distribution across major parts of the country.

Bodman said industry and government have plans in place designed to avoid
a similar outcome this year, including pre-deploying back-up generators,
making contingency plans and cross-training personnel.

He said that he was assured by one oil executive that his company would
put a lid on the price of gasoline in hurricane stricken areas for at least
one week. And he said that unlike last year, the industry is prepared to
provide ample supplies of gasoline along hurricane exit routes in the event of
an evacuation.

Bodman said that one refinery near the coast, which he refused to name,
can take a hit from a Category 3 hurricane, but will need another year to
reinforce the facility to withstand a Category 5 storm. "I would describe it
as significantly improved over the way we were a year ago, but we still have
exposures," Bodman said, "If we get a Category 5 storm and it runs up the
Houston Ship Channel we've got real problems."

--Dan Whitten, daniel_whitten@platts.com

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