Rita approaches Texas, threatening 25% refining capacity

23-Sep-05

Rita, the third most potent storm in U.S. history, with 150 mph winds, is taking aim at Texas, threatening about 25% of USA's refining capacity. A direct hit from Hurricane Rita could disrupt production and send gasoline prices to record highs. Damage to marine terminals on the Texas coast, receiving crude oil and ship refined products to market, could delay full recovery for weeks. With 26 refineries in the expected path of the storm, the potential damage is huge. The refineries have shut down in anticipation of the storm. Major oil, natural gas and petrochemical companies are active in the area, including Exxon Mobil, BP, Conoco Phillips, Valero Energy, Marathon, Citgo Union Carbide, a subsidiary of Dow Chemicals and Lyondell Chemical. It will be difficult to replace lost Texas production because most fuel produced in the Golden State is consumed there or on the West Coast, and it would be too expensive to ship it to the east coast.