Economic impact of Katrina to be unprecedented

02-Sep-05

As every aspect of the oil and natural gas chain in the United States has been affected, analysts warn that the economic impact of Hurricane Katrina could be unprecedented. Given the volumes at risk, the potential damage is on the higher end, but a lot depends on how quickly producers, refiners, and pipelines are able to restore their operations in the Gulf of Mexico. The Gulf of Mexico provides 28.5% of all U.S. oil production and 19.2% of USA's of natural gas. 95% of those oil operations and 88% of the natural gas production are now completely shut in. Louisiana Offshore Oil Port (LOOP), the facility through which 8.5% of U.S. oil imports flow, has reported "no apparent catastrophic damage Eight refineries were out of commission, and at least two of them, Chevron's facility in Pascagoula, Miss., and Exxon Mobil's plant in Chalmette, La, remained inaccessible. Flooded electrical equipment at refineries may be beyond repair, and it could take weeks to swap out parts for new equipment.