Some Good News On Oil

New York Times: U.S. Appears to Have Avoided Massive Oil Supply Problems

Gasoline supplies will likely remain tight through much of the coming week if not longer, industry officials and analysts said, as refiners slowly resume operations in the gulf region. It can take several days to restart those facilities, because of the danger of explosions and other accidents.

Of the 10 refineries that were shut down by the storm initially, eight have not resumed operations, two are restarting and hope to be operational in the coming days, and three still do not have electricity, the Energy Department said on Sunday.

At least four refiners that produce about 5 percent of the nation's gasoline and other oil-based fuels have sustained significant damage and could be out of commission for a month or more for repairs, officials and analysts said. Among them are ConocoPhillips' Belle Chase, La. facility; Exxon Mobil's Chalmette, La. plant; and ChevronTexaco's large refinery in Pascagoula, Miss.

Officials at the largest of the four, ChevronTexaco, said they still do not have power or phone service at their plant, where the company is building temporary housing for up to 1,500 employees and their families. It may be days before the company can say how long it will take to restart the plant, which has a capacity to process 325,000 barrels of oil a day.

"There is a cogeneration unit with Mississippi Electric there that needs to get up and running," said Michael Barrett, a company spokesman. "We need to get natural gas there. We are putting generators in there right now. The truth is we don't have telephone lines" working at the refinery.

Of the two major pipelines that bring gasoline, diesel fuel and jet fuel to the eastern half of the United States from Texas and the gulf, the smaller one, the Plantation pipeline, said it was operating at 100 percent. The other, the Colonial pipeline, was at 73 percent as of Saturday and hoped to be at full capacity by the end of the holiday weekend.

Also, the federal government and members of the International Energy Agency, a 26-nation organization created after the 1970's oil crisis, have started releasing crude oil and some gasoline to energy companies in an effort to ease supply constraints. Those moves helped push down crude oil prices 2.1 percent in London tradingtoday. The New York Mercantile Exchange was closed for the Labor Day holiday.

The United States Department of Energy has already agreed to loan 12.6 million barrels of oil to refiners so they can keep producing gasoline and other fuels as production facilities in the gulf recover. This weekend, the government went even further and said it would sell 30 million barrels or more of oil in addition to the loans, which companies have to replace when conditions improve.

But with so much refining capacity out of service, analysts said gasoline prices would remain high in spite of the crude oil that the federal government and its allies are unleashing.

"Some of these refineries will not be back to full operation perhaps well into next year," said Paul Horsnell, an analyst at Barclays Capital in London.

A spokesman for BP, formerly British Petroleum, Scott Dean, said the company was shipping gasoline from Europe to East Coast port to help alleviate shortages but it may take some time for the current supply crunch to wind its way out of the system.

"We are making fuels, we are distributing fuels," he said. "Fuels are arriving at the terminals and going out on trucks and arriving stations, but there are still disruptions."

Again, notice - it's not the crude oil supply that's an issue - it's the refinery capacity. But there is good news on that front:

Half of Damaged Refineries Near Restarting
Sep 05 5:35 PM US/Eastern
By STEVE QUINN
Associated Press Writer (JACKSON)

As half of the Gulf Coast refineries damaged by Hurricane Katrina begin to ramp up production this week, industry experts have this message: be patient.

"What you've got are a whole series of requirements and processes and that takes days, if not weeks," said John Felmy, chief economist for the American Petroleum Institute.

The going is also slow for the restoration of offshore oil and gas production. Almost 70 percent of normal oil production and half of the natural gas output remains shut down, according to the U.S. Minerals Management Service, which said activity is slowly recovering.

Eight major refineries that produce gasoline, diesel and jet fuel and heating oil were knocked out of commission and the output at two others was cut by last week's killer hurricane and the flooding that followed. That cut overall U.S. refining capacity by more than 10 percent and contributed to a surge in retail gasoline prices and spot shortages around the country.

Motiva Enterprises LLC, Marathon Oil Corp. and Valero Energy Corp. said that they hope to restart, and in some cases make fully operational, four of those refineries this week.

Motiva, a joint venture between Royal Dutch Shell PLC and Saudi Refining Inc., said its Convent, La., refinery restarted on Sunday and its refinery in Norco, La., is expected to get started by mid-week. Both are located west of New Orleans.

Marathon said over the weekend that its Garyville, La., refinery west of New Orleans should be fully operational early this week. Valero said it's still hoping to restart this week its St. Charles refinery about 15 miles from New Orleans.

When running at 100 percent capacity, these four represent slightly more than 1 million barrels of refined oil product a day.

In contrast, Chevron Corp.'s 325,000 barrel-a-day refinery in Pascagoula, Miss., and ConocoPhillips' 247,000 barrel-a-day facility in Belle Chasse, La., south of New Orleans have suffered major damage and are unlikely to resume production for some time, according to the U.S. Department of Energy.

The ConocoPhillips facility, along with Exxon Mobil Corp.'s Chalmette, La., refinery and Murphy Oil Corp.'s facility in Meraux, La., also have no power. They represent nearly 690,000 barrels a day of refined oil products.

But industry experts say that even after power is restored, restarting an oil refinery is a tricky and time-consuming process. Crews must be meticulous with repeated inspections, checking and rechecking for leaks. They must also ensure that all saltwater has been cleared or risk igniting a fire.

"What you have is an important set of steps in terms of these are high-temperature, high-pressure facilities," Felmy said. "And that's if you have not had any damage, and we know from preliminary reports that's not the case."

There are also work force issues. With communication lines either down or overloaded, many companies have not been able to locate displaced employees.

Last week Shell Oil and Valero spoke out about efforts to locate and assist employees. In some cases, it may require providing shelter near the refineries.

Valero estimated that almost 1,000 of its employees may have been affected by the storm, including 550 at its St. Charles refinery, scheduled to restart by week's end.

On Monday afternoon, the company said it had heard from all but nine of its employees from the St. Charles work force. The company has set up a large air-conditioned tent equipped with a catering operation, according to Valero spokeswoman Mary Rose Brown.

Additionally, the company has also dispatched 50 mobile homes to St. Charles for workers who may need temporary housing.

"It appears a lot of our employees probably lost their homes," Valero Chief Executive Bill Greehey told employees last week at the company's San Antonio, Texas, headquarters. "Rest assured, we are going to take care of our employees. Whatever financial help they need, they will be taken care of by Valero."

Cal Hodges, an Houston-based energy consultant, said companies may need to recruit retired workers for stopgap help. "We need to get the workers back, but we may need to be creative, too, in getting people to the refineries," Hodges said. "That's one way to do it."

Refineries also will receive a boost from the Department of Energy, which agreed to lend oil from the Strategic Petroleum Reserve. ExxonMobil, Valero, Placid Refining Co. LLC, BP PLC, Marathon and Total SA will collectively receive 12.6 millions barrels of oil.

More is available. Energy Secretary Samuel Bodman offered 30 million to be provided beginning Tuesday. The reserve supply, however, must be replenished by the companies once conditions return to normal.

The Gulf of Mexico normally produces 1.5 million barrels of crude oil a day, or about a quarter of the United States' domestic output, according to the U.S. Mineral Management Service.

The agency on Monday afternoon reported that about 70 percent of oil production remains shut in.

Other developments critical to the Gulf's recovery include:

_ The Louisiana Offshore Oil Port, the nation's largest oil import terminal, has been unloading tankers, operating at about 75 percent capacity. It may hit full capacity this week.

_ Colonial Pipeline Co., which transports refined products from Houston to as far away as the Northeast, is operating at 76 percent capacity, up 3 percent from its weekend report.

_ Kinder Morgan Energy Partners' Plantation Pipe Line Co., which transports fuel from refineries to Eastern markets, has been capable of full capacity operations once it receives fuel from downed refineries.

_ Shell Pipeline Co.'s Capline pipeline system, which transport crude oil into the Midwest, is operating at approximately 40,000 barrels per hour; the normal rate is 45,000 barrels per hour.

Which, when you think about it is pretty good news, considering.

So blame your high gas prices on a lack of foresight and an excess of NIMBYism*. The United States has gone from 324 operating refineries in 1981 to 149 operating refineries in 2003. Production has increased, due to expansions at exisiting refineries, but that means a greater concentration of refinery capacity in fewer sites. One accident idles more production capacity than it used to. There is more info available at the Department of Energy's website.

Boiling all this down, it means your gas prices will remain high - but there will not be any actual shortages.

NIMBY - Not In My BackYard.

New Orleans Crumbles

From the Washington Post

From the Associated Press:

New Orleans in Anarchy With Fights, Rapes By ALLEN G. BREED, Associated Press Writer

New Orleans descended into anarchy Thursday as corpses lay abandoned in street medians, fights and fires broke out, cops turned in their badges and the governor declared war on looters who have made the city a menacing landscape of disorder and fear.

"They have M-16s and they're locked and loaded," Gov. Kathleen Blanco said of 300 National Guard troops who landed in New Orleans fresh from duty in Iraq. "These troops know how to shoot and kill, and they are more than willing to do so, and I expect they will."

Four days after Hurricane Katrina roared in with a devastating blow that inflicted potentially thousands of deaths, the fear, anger and violence mounted Thursday.

"I'm not sure I'm going to get out of here alive," said Canadian tourist Larry Mitzel, who handed a reporter his business card in case he goes missing. "I'm scared of riots. I'm scared of the locals. We might get caught in the crossfire."

The chaos deepened despite the promise of 1,400 National Guardsmen a day to stop the looting, plans for a $10 billion recovery bill in Congress and a government relief effort President Bush called the biggest in U.S. history.

New Orleans' top emergency management official called that effort a "national disgrace" and questioned when reinforcements would actually reach the increasingly lawless city.

About 15,000 to 20,000 people who had taken shelter at New Orleans convention center grew ever more hostile after waiting for buses for days amid the filth and the dead. Police Chief Eddie Compass said there was such a crush around a squad of 88 officers that they retreated when they went in to check out reports of assaults.

"We have individuals who are getting raped, we have individuals who are getting beaten," Compass said. "Tourists are walking in that direction and they are getting preyed upon."

Col. Henry Whitehorn, chief of the Louisiana State Police, said he heard of numerous instances of New Orleans police officers — many of whom from flooded areas — turning in their badges.

"They indicated that they had lost everything and didn't feel that it was worth them going back to take fire from looters and losing their lives," Whitehorn said.

A military helicopter tried to land at the convention center several times to drop off food and water. But the rushing crowd forced the choppers to back off. Troopers then tossed the supplies to the crowd from 10 feet off the ground and flew away.

In hopes of defusing the situation at the convention center, Mayor Ray Nagin gave the refugees permission to march across a bridge to the city's unflooded west bank for whatever relief they could find. But the bedlam made that difficult.

"This is a desperate SOS," Nagin said in a statement. "Right now we are out of resources at the convention center and don't anticipate enough buses."

At least seven bodies were scattered outside the convention center, a makeshift staging area for those rescued from rooftops, attics and highways. The sidewalks were packed with people without food, water or medical care, and with no sign of law enforcement.

An old man in a chaise lounge lay dead in a grassy median as hungry babies wailed around him. Around the corner, an elderly woman lay dead in her wheelchair, covered up by a blanket, and another body lay beside her wrapped in a sheet.

"I don't treat my dog like that," 47-year-old Daniel Edwards said as he pointed at the woman in the wheelchair.

"You can do everything for other countries, but you can't do nothing for your own people," he added. "You can go overseas with the military, but you can't get them down here."

The street outside the center, above the floodwaters, smelled of urine and feces, and was choked with dirty diapers, old bottles and garbage.

"They've been teasing us with buses for four days," Edwards said. "They're telling us they're going to come get us one day, and then they don't show up."

Every so often, an armored state police vehicle cruised in front of the convention center with four or five officers in riot gear with automatic weapons. But there was no sign of help from the National Guard.

At one point the crowd began to chant "We want help! We want help!" Later, a woman, screaming, went on the front steps of the convention center and led the crowd in reciting the 23rd Psalm, "The Lord is my shepherd ..."

"We are out here like pure animals," the Issac Clark said.

"We've got people dying out here — two babies have died, a woman died, a man died," said Helen Cheek. "We haven't had no food, we haven't had no water, we haven't had nothing. They just brought us here and dropped us."

Tourist Debbie Durso of Washington, Mich., said she asked a police officer for assistance and his response was, "'Go to hell — it's every man for himself.'"

"This is just insanity," she said. "We have no food, no water ... all these trucks and buses go by and they do nothing but wave."

FEMA director Michael Brown said the agency just learned about the situation at the convention center Thursday and quickly scrambled to provide food, water and medical care and remove the corpses.

Speaking on CNN's "Larry King Live," Homeland Security Secretary Michael Chertoff said the evacuation of New Orleans should be completed by the end of the weekend.

At the hot and stinking Superdome, where 30,000 were being evacuated by bus to the Houston Astrodome, fistfights and fires erupted amid a seething sea of tense, suffering people who waited in a lines that stretched a half-mile to board yellow school buses.

After a traffic jam kept buses from arriving for nearly four hours, a near-riot broke out in the scramble to get on the buses that finally did show up, with a group of refugees breaking through a line of heavily armed National Guardsmen.

One military policeman was shot in the leg as he and a man scuffled for the MP's rifle, police Capt. Ernie Demmo said. The man was arrested.

Some of those among the mostly poor crowd had been in the dome for four days without air conditioning, working toilets or a place to bathe. An ambulance service airlifting the sick and injured out of the Superdome suspended flights as too dangerous after it was reported that a bullet was fired at a military helicopter.

"If they're just taking us anywhere, just anywhere, I say praise God," said refugee John Phillip. "Nothing could be worse than what we've been through."

By Thursday evening, 11 hours after the military began evacuating the Superdome, the arena held 10,000 more people than it did at dawn. National Guard Capt. John Pollard said evacuees from around the city poured into the Superdome and swelled the crowd to about 30,000 because they believed the arena was the best place to get a ride out of town.

As he watched a line snaking for blocks through ankle-deep waters, New Orleans' emergency operations chief Terry Ebbert blamed the inadequate response on the Federal Emergency Management Agency.

"This is not a FEMA operation. I haven't seen a single FEMA guy," he said. He added: "We can send massive amounts of aid to tsunami victims, but we can't bail out the city of New Orleans."

FEMA officials said some operations had to be suspended in areas where gunfire has broken out, but are working overtime to feed people and restore order.

A day after Nagin took 1,500 police officers off search-and-rescue duty to try to restore order in the streets, there were continued reports of looting, shootings, gunfire and carjackings — and not all the crimes were driven by greed.

When some hospitals try to airlift patients, Coast Guard Lt. Cmdr. Cheri Ben-Iesan said, "there are people just taking potshots at police and at helicopters, telling them, `You better come get my family.'"

Outside a looted Rite-Aid drugstore, some people were anxious to show they needed what they were taking. A gray-haired man who would not give his name pulled up his T-shirt to show a surgery scar and explained that he needs pads for incontinence.

"I'm a Christian. I feel bad going in there," he said.

Earl Baker carried toothpaste, toothbrushes and deodorant. "Look, I'm only getting necessities," he said. "All of this is personal hygiene. I ain't getting nothing to get drunk or high with."

Several thousand storm victims had arrived in Houston by Thursday night, and they quickly got hot meals, showers and some much-needed rest.

Audree Lee, 37, was thrilled after getting a shower and hearing her teenage daughter's voice on the telephone for the first time since the storm. Lee had relatives take her daughter to Alabama so she would be safe.

"I just cried. She cried. We cried together," Lee said. "She asked me about her dog. They wouldn't let me take her dog with me. ... I know the dog is gone now."

While floodwaters in the city appeared to stabilize, efforts continued to plug three breaches that had opened up in the levee system that protects this below-sea-level city.

Helicopters dropped sandbags into the breach and pilings were being pounded into the mouth of the canal Thursday to close its connection to Lake Pontchartrain, state Transportation Secretary Johnny Bradberry said. The next step called for using about 250 concrete road barriers to seal the gap.

In Washington, the White House said Bush will tour the devastated Gulf Coast region on Friday and has asked his father, former President George H.W. Bush, and former President Clinton to lead a private fund-raising campaign for victims.

The president urged a crackdown on the lawlessness.

"I think there ought to be zero tolerance of people breaking the law during an emergency such as this — whether it be looting, or price gouging at the gasoline pump, or taking advantage of charitable giving or insurance fraud," Bush said. "And I've made that clear to our attorney general. The citizens ought to be working together."

Donald Dudley, a 55-year-old New Orleans seafood merchant, complained that when he and other hungry refugees broke into the kitchen of the convention center and tried to prepare food, the National Guard chased them away.

"They pulled guns and told us we had to leave that kitchen or they would blow our damn brains out," he said. "We don't want their help. Give us some vehicles and we'll get ourselves out of here!"

Associated Press reporters Adam Nossiter, Brett Martel, Robert Tanner and Mary Foster contributed to this report.

Under the weight of thousands of unprepared victims, New Orleans has become hostile territory. Looters and thugs prowl the streets, while those who did not evacuate before the storm huddle at shelters out of food and water. The entire New Orleans police force had to be pulled from rescue duty to maintenance of law and order, and their efforts are still inadequate. Rumors of police abandoning their posts or joining in the looting are common, and some have proven true.

Bandits are attacking relief efforts, firing at rescue helicopters and relief convoys.

Elsewhere throughout the city, hundreds still wait for rescue.

Eager to lay blame somewhere, critics are already criticizing FEMA and the federal response.

As he watched a line snaking for blocks through ankle-deep waters, New Orleans' emergency operations chief Terry Ebbert blamed the inadequate response on the Federal Emergency Management Agency.

"This is not a FEMA operation. I haven't seen a single FEMA guy," he said. He added: "We can send massive amounts of aid to tsunami victims, but we can't bail out the city of New Orleans."

In all fairness to FEMA - it was not for 12-18 hours after Katrina passed that it was realized that New Orleans was flooding. And I'm beginning to believe a failure of local and state leadership has played a far larger contribution to the present chaos than a slow federal response.

More importantly - all major lines of communication are shattered. One could not simply drive to the Superdome until the water receded somewhat today. Today. New Orleans only had three major roads out of the city. One of those, I-10 north is gone.

And problems are not confined to the hurricane impact zone.From the Washington Post:

Overnight, Baton Rouge Becomes Largest City in Louisiana
In a day, this city has become the largest in Louisiana, and grim local officials here predicted it would double in size, to about 800,000, permanently. "The Baton Rouge we live in and grew up in is no longer," said city councilman Mike Walker. "These people are here to stay, perhaps forever."

Many of the evacuees have brought New Orleans' lawlessness with them; crime in Baton Rouge has exploded, and National Guardsmen had to be deployed to maintain order in downtown Baton Rouge.

In Mississippi, the damage is far worse, but looting has been considerably less common. Why? Is it simply a function of population density, or was New Orleans a far sicker city than we realized?

This storm has shattered all the technologies that keep modern cities running. Communication. Transportation. Utilities. All gone.

I think it not hyperbole to say New Orleans is dead. A new city may rise, but the city we knew is dead.

Hurricane Katrina - Update 9.1.2005

From CNN.com:

Following is a rundown of the situation in the states most affected by Hurricane Katrina.


Louisiana

Deaths: The mayor said the hurricane probably killed thousands of people in New Orleans -- an estimate that, if accurate, would make the storm the nation's deadliest natural disaster since at least the 1906 San Francisco earthquake. Relief crews put aside the counting of bodies to concentrate on rescuing the living, many trapped on rooftops and in attics.

An estimated 80 percent of New Orleans is under water, up to 20 feet deep in places. Water is still rising as engineers struggle to plug two breached levees along Lake Pontchartrain with giant sandbags.

Buses carrying evacuees from New Orleans began arriving at Houston's Astrodome overnight as Louisiana officials began clearing out the hurricane-ravaged Superdome.

Lt. Gov. Mitch Landrieu said 3,000 people have been rescued by boat and air.

Sections of Interstate 10, the only major freeway leading into New Orleans from the east, are destroyed.

At least 713,000 customers estimated without power.

BellSouth Corp., the region's dominant local phone provider, estimated that about 750,000 lines may be out of service in the most heavily damaged areas.

Looting broke out in some New Orleans neighborhoods. Thieves took guns from a Wal-Mart. One police officer was shot in the head by a looter but was expected to recover. Looters also used a forklift to smash open a pharmacy. City officials themselves commandeered equipment from a looted Office Depot. During a state of emergency, authorities have broad powers to take private supplies and buildings for their use.

Quote: "You know, it's not like people are just there because they want to be there. They're there because they're trapped in the city." -- Gov. Kathleen Blanco on ABC "Good Morning America"


Mississippi

Deaths: At least 110.

More than 236,000 customers are without power.

Hundreds of waterfront homes, businesses, community landmarks and condominiums have been obliterated.

Casinos built on barges along the coast are damaged or destroyed, some floated across beach onto land.

More than 1,600 Mississippi National Guardsmen have been activated.

Major bridges were damaged in three coastal counties, including those linking Biloxi with Ocean Springs and the connection to Bay St. Louis.

Looters picked through casino slot machines for coins and ransacked other businesses.

Quote: "It is indescribable -- blocks and blocks and blocks of no houses. Ninety percent of the structures are gone. I saw Camille and the aftermath in 1969 and this is worse than Camille." Gov. Haley Barbour on NBC's "Today." Camille killed 143 and destroyed 6,000 homes.


Alabama

Deaths: Two.

About 325,000 homes and businesses are without power.

Flooding reached 11 feet in Mobile, matching a record set in 1917, according to the National Weather Service. Water got up to the roofs of cars in downtown Mobile and bayou communities. Piers were ransacked and grand homes flooded along Eastern Shore of Mobile Bay.

Major bridge over the Mobile River partially reopened; it was struck by oil drilling platform that floated away from a shipyard.


Florida

[Note: As I understand, these result from Katrina's first landfall last week. - Tyler]

Deaths: 11.

About 80,700 customers without power.

"An American Refugee Crisis"

Austin Bay:

An American Refugee Crisis

Yesterday I saw tv footage of New Orleans residents huddling around the Superdome. I also saw footage of a family walking along a road in Mississippi. The family was fleeing their drowned suburb.

The Katrina victims’ evident anxiety reminded me of the worry and fear on the faces of refugees I enountered along the Uganda-Congo border in Fall 2002. Those refugees had fled fighting in the DRC (Democratic Republic of Congo). If not for the UNHCR and western aid organizations (mostly US, British, and Canadian), and the willingness of the Ugandan government to allow them sanctuary, the refugees I saw in Uganda would have died.

I’m not drawing a one-to-one comparison between Katrina’s victims and central African refugees. War drove the Congolese into Uganda; Katrina is a natural disaster. The looting in New Orleans, while viciously criminal, is dwarfed by the anarchy and murder afflicting central Africa. In these Third World tragedies information usually moves on foot; Fox and CNN only show up if there’s combat. All too often there are no medical and food supplies, or relief is weeks away, at best. The human waves really have no place to go; they wash from one poor country to another. America has infrastructure, abundant supplies, logistical capacity, a plethora of means combined with the will to act. Forgive the pun, but our media have now flooded the disaster area. However, at the level of human suffering the comparison is apt, instructive, and illustrative.

We’ve a million people dispossessed and they are suffering. Critics grouse that the response to Katrina’s devestation has been abysmally slow. Compared to what? Slow compared to our expectations is the correct answer. Compared to every other nation on the planet, we’re moving at warp speed to address a natural disaster of extraordinary magnitude.

Watch what happens over the next week, as American aid organizations, religious groups, and willing individuals act. America’s great wealth is matched by its generosity. America is responding decisively to Katrina’s tragedy.