Ike Shutters 20% of U.S. Refining Capacity By Jordan Burke and Aaron Clark (Bloomberg) -- Almost 20 percent of the U.S.'s oil refining capacity was shut after Hurricane Ike slammed into the Gulf Coast, limiting fuel deliveries and prompting the Department of Energy to release 309,000 barrels from its strategic reserves. At least 13 refineries in Texas including plants operated by Exxon Mobil Corp., Valero Energy Corp. and Royal Dutch Shell Plc shut 3.64 million barrels a day of refining capacity as Ike approached Texas. Exxon and Shell said yesterday they would begin assessing damage of Gulf facilities as soon as weather permitted. Gulf refineries and ports are the source of about 50 percent of the fuel and crude used in the eastern half of the U.S. Analysts predict gasoline prices may again reach $4 a gallon. ``If these refinery outages go three weeks or more, most of the nation could see $4 gasoline again,'' Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University in Dallas, said in an telephone interview. ``If they are back up in a week, it may be a 15- or 20-cent-a-gallon increase.'' The U.S. Department of Energy said today it released a total of 309,000 barrels in crude from its Strategic Petroleum Reserve because of shortage in refineries owned by ConocoPhillips and Placid Oil along the Gulf Coast. ``The oil was requested because of disruptions in supply caused by Hurricanes Gustav and Ike,'' the Department said in an e-mailed statement. Deliveries will begin today, it said. The deliveries are for the ConocoPhillips refinery at Wood River along the Capline pipeline system and Placid Oil's Port Allen refinery, the statement added. Gasoline Prices Wholesale gasoline in the Gulf Coast market this past week climbed before Ike's arrival by 58 percent to $4.65 a gallon, according to data compiled by Bloomberg. Regular gasoline at the pump rose 5.8 cents to an average $3.733 a gallon, AAA said yesterday on its Web site. The price reached a record $4.11 on July 15. Calcasieu Parish, Louisiana, which is home to three refineries, reported ``widespread'' power outages and flooding in Ike's aftermath, Tom Hoefer, the parish's public information officer, said in an interview. Hoefer said the refineries likely escaped damage. ``There has been no wind damage to any of them, and none of them are in flooding areas,'' he said. The three local refineries, which can process a combined 772,000 barrels a day, are owned by ConocoPhillips, Citgo Petroleum Corp. and Calcasieu Refining Co. Citgo spokeswoman Shawn Trahan, in a telephone interview, declined to say if the refinery was affected. Calcasieu couldn't immediately be reached. |
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