Post-Gustav Landfall Resource/Open Thread

Well, it's the day after. We need your assistance. In this thread, we would appreciate any materials, links, maps, charts, etc., that will help us all understand what Gustav did to oil and natural gas supply/production and gasoline availability, if any. Help us keep this focused, please. (Eds. Note: Please put damage related issues in this column. Please put comments on more general issues (for example, the impact on the Republican convention, or on politics in general) in Drumbeat.

Under the fold are discussions of the Louisiana Offshore Oil Port, Port Fourchon, damage model maps, the hurricane itself, and many of the other resources we had yesterday.

Here is Chuck Watson at KAC/UCF's landfall composite damage estimate for Gulf (GOM) oil and NG production, which covers the GoM loss for the month of September in to the context of overall oil production, imports, and refining. Note for those crunching the numbers that since GoM is about 25% of US production, 40% of the GOM's contribution of 25% is 10% of the total US production.

COMP ATCF Forecast Time: 2008090112
14 day:    8.21 MMBBL ( 52.36% normal), gas   63.50 BCF ( 65.91% normal)
30 day:   19.98 MMBBL ( 59.46% normal), gas  145.98 BCF ( 70.70% normal)
60 day:   43.01 MMBBL ( 64.00% normal), gas  304.43 BCF ( 73.73% normal)
90 day:   95.23 MMBBL ( 94.47% normal), gas  586.06 BCF ( 94.62% normal)
6 mon :  195.13 MMBBL ( 96.79% normal), gas 1205.43 BCF ( 97.31% normal)
1 year:  400.48 MMBBL ( 97.96% normal), gas 2478.60 BCF ( 98.67% normal)

Interpretation: the models say that 40% of GOM oil will be offline for 30 days and ~30% of GOM NG for will be offline for 30 days--followed by marginal increases in GOM supply (both imports and production) through the next months. (E.g., the 60 day number for oil is 36% shut-in, but between 60-90 days, the number goes down to 5% of GOM oil shut-in.)

UPDATE: 10:00 EDT 9/1 - Graphic below is damage models based on LBAR hurricane forecast track, key is below. Numerical damage estimates are below the fold for oil and natural gas shut-in and damage.

Path/damage estimates using LBAR 10:00 EDT forecast-click twice to enlarge

For all graphics: Rigs/Platforms: Blue: evacuated only; Yellow will require inspection before restart; Red: damage requiring repair; Refineries: Black: operational impact (partial shutdown) Green: Operational impact (full shutdown) Red: Damage likely; Ports: standard hurricane flags for wind

The Louisiana Offshore Oil Port, or LOOP (see JoulesBurn's story on the LOOP here), and Port Fourchon, which has historically been a land base for offshore oil support services in the Gulf, was in the path of Gustav and is expected to be damaged. As you will see below, a good bit of oil and natural gas is also expected to be taken offline: some for weeks, some for much longer, according to Methaz' models.

Matthew Simmons, of Simmons International says this about the importance of the LOOP:

LOOP is the only facility in the Gulf to unload VLCC tankers which carry over 2 million barrels of crude. They can in theory be "litered" by unloading onto smaller tankers that can make it into the Gulf Coast ports but this is very lengthy timewise and the spare capacity of these smaller tankers is slim. We get about 1.2 million b/d of crude imports through Loop. (+/- 10%)

Final forecast update from Chuck Watson at KAC/UCF:

Here's the 9/1 update:

Well, I think someone (who out of modesty shall remain nameless) forecast several days ago, Gustav would hit unfavorable conditions in the northern Gulf and never make it back to mega-storm strength. That seems to be the case. Center landfall with peak winds of 100kts or maybe slightly less looks to be at Grand Isle, at 8am ET - as of 730et the "eyewall" appears to be touching land.

I'm mostly sticking with the synthesis from last night (based on multiple models) as to impacts, and we're now in a "wait and see what the inspections bring" mode. The big question is what if any major damage the LOOP suffered and (perhaps more vulnerable than the LOOP itself) the connection pipelines to shore. Baseline estimate is 10-14 days for the port itself. Radar shot (7:30am ET) with tracks and LOOP labeled attached.

Production: Unless something broke that shouldn't have, we expect production to be back up to 60-70% within 30 days, and back to 95% by the end of the year. We expect a long-term hit of 3% or so since this swath went through some areas that Ivan, Katrina, and Rita missed and some older, less productive wells will not be restored.

Refineries and distribution: Mainly short term disruption due to precautionary shutdowns, no long term unless we get unlucky with pipelines.

All in all, my thinking is that this could have been a lot worse. Storm was disorganized crossing the OCS, so waves and storm surge will be lower than they should be for a storm of this size and intensity.

This is the latest MMS estimate (yesterday's) of damages available at this time:

Sept 1 (Reuters) - Hurricane Gustav, the first big threat to U.S. Gulf of Mexico energy and port infrastructure since Katrina and Rita in 2005, made landfall west of New OrleansMonday morning. [nN01292385]
The following outlines the impact on the energy sector:

*96.3 percent of U.S. Gulf of Mexico oil output shut
*82.3 percent of Gulf of Mexico natgas output shut
*27 percent of U.S. refining affected, 11 percent shut, 16 percent at reduced rates.
*433,600 Entergy customers lose power
*No damage assessments yet
*US waives gasoline standards in parts of Texas and Louisiana, ready to release emergency crude

*96.3 percent of U.S. Gulf of Mexico's 1.3 million barrels per day crude output shut as of Sunday, according to U.S. government.
*82.3 percent of the Gulf's 7.4 billion cubic feet per day natural gas output shut as of Sunday.

*Ten refineries with capacity of 1.9 million bpd shut
*Eight refineries with capacity of 2.8 million bpd at reduced rates

*ExxonMobil 193,000 bpd Chalmette, Louisiana.
*Murphy 120,000 bpd Meraux, Louisiana
*ConocoPhillips 280,000 bpd Lake Charles and 195,000 bpd Alliance, Louisiana, refineries
*Motiva 236,000 bpd Norco, Louisiana; 235,000 bpd Convent, Louisiana refinery on standby.
*Marathon 250,000 bpd Garyville, Louisiana.
*Calcasieu shut its 80,000 bpd Lake Charles, Louisiana
*Alon 80,000 bpd Krotz Springs, Louisiana
*Valero 250,000 bpd St. Charles, Louisiana

*ExxonMobil 503,000 bpd Baton Rouge, Louisiana; 567,000 bpd Baytown, Texas; 349,000 bpd Beaumont, Texas
*Citgo 430,000 bpd Lake Charles, Louisiana
*Valero 325,000 bpd Port Arthur, Texas; 130,000 bpd Houston, Texas, 245,000 bpd Texas City, Texas
*Motiva 285,000 bpd Port Arthur, Texas

*Entergy says 433,600 of 1.9 million customers without power, 101,500 in evacuated areas, 332,600 in southeast and southwest Louisiana.
*Entergy's Waterford 3 nuclear plant shut Sunday night; River Bend nuclear plant powered down to 75 percent due to lower electricity demand.

*Louisiana Offshore Oil Port stopped unloading ships Saturday and shut flows from storage Sunday
*Houston Ship Channel closed to inbound traffic at midnight Sunday (0500 Monday GMT), all outbounders already gone
*Mississippi River traffic at New Orleans halted inbound at noon (1700 GMT) Saturday, outbound as of 6 p.m. CDT (2300 GMT).
*Traffic at Lake Charles, Louisiana, halted Sunday
*Traffic at Beaumont and Port Arthur, Texas, halted Sunday
*Gulf Intracoastal Waterway closed Mississippi to Florida

*Explorer Pipeline says entire 700,000 bpd products pipeline, Gulf Coast to Chicago, available Monday night
*El Paso's said its Tennessee and Southern Natural gas pipelines offshore throughput cuts total 2.5 Bcfd.
*TEPPCO's 340,000 bpd products line from Texas to Northeast cuts run rates, Beaumont distillate line down.
*Henry Hub natural gas trading hub shut Sunday.
*Enbridge (ENB.TO: Quote, Profile, Research, Stock Buzz) (EEP.N: Quote, Profile, Research, Stock Buzz) stopped taking natural gas production Saturday on systems with 6.7 Bcfd capacity.

I've seen this movie


I can't even get into MMS today. I get a partial page (some of the upper graphics) maybe from the cache, but the connection symbol just keeps spinning around and around until the connection fails (times out).

This is an excerpt from MMS's press release for Sept 2, 2008.

Based on data from offshore operator reports submitted as of 11:30 a.m. CST today, personnel have been evacuated from a total of 632 production platforms, equivalent to 88.2 % of the 717 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced. These structures remain in the same location throughout a project’s duration unlike drilling rigs which typically move from location to location.

Personnel from 110 rigs have also been evacuated; this is equivalent to 90.9 % of the 121 rigs currently operating in the Gulf. Rigs can include several types of self-contained offshore drilling facilities including jackups, submersibles and semisubmersibles.

From the operators’ reports, it is estimated that approximately 100 % of the oil production in the Gulf has been shut-in. Estimated current oil production from the Gulf of Mexico is 1.3 million barrels of oil per day. It is also estimated that approximately 95.4 % of the natural gas production in the Gulf has been shut-in. Estimated current natural gas production from the Gulf of Mexico is 7.4 billion cubic feet of gas per day.

Damage related stories from Drumbeat:

Louisiana Refiners to Take Days to Resume Full Supply (Update1)

(Bloomberg) -- Louisiana refineries that shut down before Hurricane Gustav may take up to 10 days to resume operations because of a lack of power, stunting fuel production at a time when regional gasoline inventories are at a 10-month low.

Marathon Oil Corp., Valero Energy Corp. and other refiners that shut plants as Gustav swept through the Gulf of Mexico won't know the extent of any damage until today at best. Exxon Mobil Corp. shut its Baton Rouge plant, the second-largest U.S. refinery, after winds snapped power lines.

On first scan, little oil damage seen from Gustav

HOUSTON (Reuters) - Several major U.S. refiners said early checks on Monday showed their facilities were unharmed by Hurricane Gustav, but at least two others were said to be considering dipping into the U.S. Strategic Petroleum Reserve to keep operations going after the storm shut down key waterways.

Gustav weakened to Category 2 before roaring ashore near Port Fourchon, Louisiana, on Monday, potentially sparing the kind of damage that the region's platforms, rigs and refineries suffered at the hands of more powerful Katrina three years ago.

Offshore operators said remote sensors indicated that major platforms remained where they were moored before the storm, although Shell, the region's largest producer, said it may take three to five days to restore production.

"Meanwhile, the Colonial Pipeline was operating at reduced rates Monday evening because its Baton Rouge facility was shut following a communications failure and another booster station in the central Louisiana vicinity was evacuated, a spokesman said."

I guess a big unknown at this point is how widespread any product shortages will be.

Thanks for the link. The Colonial Pipeline is critical to keeping the East Coast supplied with refined products such as diesel and gasoline. It was shut down for a while after Katrina, causing a shortage of gasoline on the East Coast.
This is a map of where it goes

Oil, gas prices fall to April levels after Gustav weakens
The Washington Times
Wednesday, September 3, 2008

"The Colonial pipeline, the main conduit bringing fuel into the Washington area, was operating at reduced capacity due to power outages and shutdowns at pumping stations in central Louisiana. Because of ample supplies at most gas stations, however, the cutbacks had not caused an increase in pump prices."

Estimates regarding insured losses, from this article:

The California risk management consulting firm Eqecat Inc. estimated Monday that Hurricane Gustav would generate $6 billion to $10 billion of insurance claims, primarily in Louisiana, after making landfall.

The California insurance consulting firm Risk Management Solutions Inc. issued even lower projections Monday evening of $3 billion to $7 billion in insured losses on land from Gustav.

Meanwhile, the Boston consulting firm AIR was working on downgrading its initial estimates issued Sunday of anticipated losses of $11 billion.

Those figures don't include estimates of flood damage, which is covered separately by the National Flood Insurance Program, or estimates of damage to offshore energy facilities.

Regarding impact on reinsurers, Reuters reported the following:

"Gustav is more of an earnings event for reinsurers," Chris Waterman, a senior director in Fitch's Insurance Group in London told journalists, rather than a catastrophe that knocks a hole in the industry's capital.

"Most reinsurers would plan for this kind of event. It's probably in line with their estimates," said Waterman.

I like that. It's an "earnings event". A buy opportunity.

AIR estimates offshore damage at 1.8-4.4 billion dollars, but I'm not sure what that is based on.

Here's the complete history of Gustav's wind, gust and central pressure, 25 Aug to 02 Sep 2008, with the time over the Gulf of Mexico highlighted (red to blue to reflect the cooler waters northward):

And here's the record of Gustav's movement speed:



This is the press release from Chuck Watson's company (posted yesterday) regarding the total amount of damages. These damages include things like damages to roads and bridges that are not included in insured damages.

Kinetic Analysis Corporation estimates the impact of Hurricane Gustav on Oil production in the Gulf of Mexico.

Kinetic Analysis Corporation (KAC) is forecasting a shortfall of 17 million barrels of oil (MMBBL) for the month of September, based on an expected loss of 40% of normal Gulf of Mexico Production due to Hurricane Gustav. The Gulf of Mexico normally produces 33.6 MMBBL of Oil out of 155 MMBBL produced domestically. Only 138 MMBBL are expected to be produced in September. With imports averaging 300 MMBBL per month, and refining usage at 458 MMBBL, approximately 20 MMBBL would have to be tapped from stocks during the month of September to maintain current usage levels.

We expect production to be back up to to 95% by the end of the year. We expect a long-term production loss of approximately 3%, since Gustav's swath went through some areas that Ivan, Katrina, and Rita missed, and older, less productive wells that suffered damage will probably not be restored to operation.

The LOOP terminal, source of 25% of US oil imports and the only VLCC class supertanker port on the US East Coast, was directly in the path of the storm. In addition to damage to the offshore port itself, the connection pipelines to shore are also vulnerable to storm damage. Our baseline estimate is 10-14 days downtime for the port itself. As there is some potential for undersea slumping and scour, pipeline disruption is possible and could further aggravate supply issues.

For refineries and distribution, mainly short-term disruption is expected due to precautionary shutdowns; no long term impacts are expected unless there is significant disruption of the pipelines. Flood-related delays in repair and restoration due to high rainfall rates are possible if the storm lingers in the impact area.

Storm total damage (residential, commercial, and infrastructure) is estimated at $35-40 Billion.

Here are two short YouTube video's from Port Fourchon.


If the links don't work search on Gustav Fourchon.


We've posted an interactive web map of the swath of hurricane-force winds and whose production/pipelines were most at risk--

Of particular interest was how the storm passed over some of the high-dollar deepwater assets of Shell, BP, and ENI.



Interesting site. Exhibits by company are given for oil, natural gas, and platforms. This is an example.

Exxon: No restart schedule for Baton Rouge refinery

HOUSTON, Sept 2 (Reuters) - Exxon Mobil Corp said on Tuesday no time has been set for the restart of its 503,000 barrel per day (bpd) Baton Rouge, Louisiana, refinery, which was shut by Hurricane Gustav.

Exxon spokeswoman Premlata Nair and Exxon Baton Rouge refinery spokesman George Pietrogallo both said the refinery was doing preliminary checks of the refinery and adjoining chemical plant complex.

"Baton Rouge is conducting a preliminary site assessment to determine the impact of Gustav," she wrote in an email. "We are assessing restart options, but are unable to provide a restart schedule at this time."

Interesting comments. I'm just putting the finishing touches on a grant proposal to increase access to local foods for older, rural people. I thought I would check oil prices to boost my argument that in an uncertain future with higher gas prices, we need to establish more and varied food distribution plans for our most vulnerable citizens- hence local foods access for the rural elderly. Well, oil is down $6.5/barrel.

Maybe we should just keep driving 120 miles round trip to the nearest Walmart. Just kidding.

This thread is for Gustav damage reports. Please post comments on other topics in the DrumBeat. Thanks.

This just goes to show how much downward pressure there is on oil prices right now. With the largest supply disruption of the year, the price still falls by a record amount. The price of oil right now is lower than it was even before anyone heard the name Gustav.

The LOOP and an array of major refineries are down. I call this demand reduction for crude.

In the coming days, the SPR will make up for the lost wells. I call this mitigation of the crude supply reduction.

I don't see how this disruption would push the price of crude up in the short term. Once the LOOP and refineries are back and we know how many wells are permanently shut down, it will be another story.

We're up $5-6 off the lows this morning though. What happens to prices when the pipeline levels drop as distributors draw products? is reporting that the Port Fourchon police drove down the road LA 1 to Port Fourchon and report the road and the port are not severely damaged. Other info in the article.

Tuesday, Port Fourchon's police were able to use the road to enter the port. "The port and LA 1 are not severely damaged, and water has receded," the Port Fourchon Police Department said in a press release Tuesday afternoon. "Upon quick visual inspection it appears there is no major structural damage to port, and it will begin minimal operation in the next couple of days."

Major damage reported outside of New Orleans

It could be a day or more before oil and natural gas companies can assess the damage to their drilling and refining installations. Jindal said as much as 20 percent of oil and gas production that was stopped because of Gustav could be restored by this weekend, stressing that it was a rough estimate.

To the east of the city, state officials were unable to reach anyone at Port Fourchon, a vital energy industry hub where huge amounts of oil and gas are piped inland to refineries.

Came in from helping clean up neighborhood (work best done before the heat of the day).

Caught end of discussion with Plaquemines Parish President about problems with private levee that endanger a refinery (Conoco Philips ?) and natural gas pipeline that supplies 5% of US supply. Unfortunately missed the "meat" of the discussion.

New Orleans is operating as an electrical island with 3 fossil fuel plants (our nuke is still down).

FEMA briefing coming up.
100% of oil production (1.3 million b/day) shut in. 95% of natural gas production of 7.4 trillion ft3 also shut-in. Some production back on-line in a week, 100% in two weeks if no problems are discovered today and tomorrow.


This Reuters story makes the electrical situation sound a little worse:

The state's largest utility, Entergy Corp, said 825,000 customers, mostly in Louisiana. lost power, including Entergy areas that serve oil refineries and major oil and gas infrastructure operations.

and later in the same story:

Damage assessment will begin with Entergy's high-voltage power grid, which must be restored before power can flow, said Entergy spokesman Mike Burns. Entergy described the damage to its system as "massive," with 191 power lines and 210 substations out of service.

Entergy's network of power lines able to move electricity from generating plants to customers is currently fractured, leaving an area, including New Orleans and Baton Rouge, as an island, no longer connected to the rest of the system and served only by three power plants, Entergy said.


Reports from outside the company estimated it could be 10 days before power can be restored to oil refineries.

Reuters Update Gustav slams Entergy's Louisiana power grid.

Entergy warned of "extremely severe damage" to its transmission grid, and said 13 of 14 key transmission lines carrying power to New Orleans were out of service.

Due to extensive damage to at least 13 high-voltage power lines, company officials offered no timetable for power restoration. Repairs could take weeks in some areas, they said.

Restoring electricity to homes and businesses will require a delicate balancing act. The utility must match transmission capacity and generation capacity or risk triggering a widespread blackout due to power imbalances, Dawsey said.

While Gustav's impact on the state was less severe than devastation left by Katrina's flooding, its damage to Entergy's grid was worse, particularly in the Baton Rouge area, said Renae Conley, president of two Entergy utility units serving Louisiana.

It looks like Nates pal, "Hurricane Jim" nailed it with these comments last week.

B. A storm of this intensity would damage the power grid in ways we haven't seen for a very long time.

Catastrophic is the word that comes to mind.

The power-infrastructure outcome fits the available wind data for Baton Rouge well:

Peak gust at Ryan Field (KBTR):

Gustav: 79 knots (91 mph, 147 km/h)
Katrina:43 knots (49 mph, 69 km/h)

This is a huge difference, even if you include unofficial wind readings from the Baton Rouge area: 54 knots tops during Katrina. Lafayette is in the same situation. For the region including Lafayette and Baton Rouge southward, Gustav was clearly a major storm.

Hurricane Jim made a great forecast.



By comparison, the highest gust at New Orleans City Hall was 76 mph (from memory) and other nearby Weather bug stations had gusts of 67 mph, etc.

This explains why the % of meters without power in Baton Rouge is higher than in New Orleans.

Refineries will get priority, but the weakness appears to be the HV AC system. As long as temperatures stay moderate, a broken system can probably adapt (with occasional rolling blackouts). Use the excess summer peak capacity of what is left.


Sensors indicate no major oil rig damage - API head

ST. PAUL, Minnesota (Reuters) - Sensors on oil rigs and platforms in the Gulf of Mexico indicate no major damage to those facilities from Hurricane Gustav, although flyovers and more detailed physical checks will still have to be made, American Petroleum Institute President Red Cavaney said on Tuesday.

"It does not appear any of those are off-station," Cavaney said in a telephone interview with Reuters on the sidelines of the Republican National Convention which he is attending.

Cavaney said that several thousand rigs and platforms were outfitted with the transponders following the 2005 hurricanes that badly battered the Gulf Coast.

There were no indications that pipelines serving the U.S. Strategic Petroleum Reserve were damaged by the storm, Cavaney said, which would help facilitate any oil company requests for emergency crude oil loans from the stockpile.

Louisiana Oil Refineries May Take 10 Days to Start Up, Sapping Fuel Supply

(Bloomberg) -- Louisiana refineries that shut down before Hurricane Gustav may take up to 10 days to resume operations because of a lack of power, stunting fuel output at a time when regional gasoline inventories are at a 10-month low.

Gov. Jindal has said twice (at least) that the refineries did a "warm shut-down" which allows for a 1 day return to production (assuming labor, natural gas, etc. in place).


I notice that a story quoted upthread says that it may be 10 days before electric power can be restored to refineries. According to that article:

Damage assessment will begin with Entergy's high-voltage power grid, which must be restored before power can flow, said Entergy spokesman Mike Burns. Entergy described the damage to its system as "massive," with 191 power lines and 210 substations out of service.

High Voltage lines around Baton Rouge are down in large amounts.

New Orleans is running off of locally generated power (our nuke is still down) as an island.

Entergy was saying 4 to 6 weeks to repair. Gov. Jindal said that was totally unacceptable.


Does that mean 4-6 weeks before all the refineries are running normally again?

Perhaps the Eastern Canada ice storm could serve as a reference. In Canada the damage was mostly to the aerial wires, both high voltage transmission and the local distribution networks, as well as to the pylons and wooden poles holding the wires. Four to size weeks is in line with the time it took to repair the damage from the storm here in Canada. This was the time required to reconnect until the last residential customer. The delay is because of the large number of poles and wires to replace. It is not a hard task, but there are so many of them.

I guess major institutions like refineries and pipelines would be given a priority. If this wire damage hypothesis is correct, I expect that they won't have to wait weeks.

No, they will get priority. As long as temperatures remain moderate a broken HV AC system (with occasional blackouts) can support local demand.

I doubt that our local nuke will come back on-line with a fragile grid though.


If we do have a whole series of storms that hit the country, one of the biggest problems may be the massive amount of work necessary to repair the grid, which will contribute to problems with refining and product distribution.

There's a report from the US Army Corps of Engineers that there are two ships and two large barges stranded on top of a 16" natural gas line in one of NO's canals. According to them, the gas line services the entire US (which doesn't sound correct, 16"?).

Doesn't say whether the pipe was damaged or not, or what effect it will have on its usage.

I am not sure, but I wouldn't doubt it. I know the natural gas pipeline coming into Vermont is smaller than my arm (when I've been working out). Here is a graph of national pipelines and compressors from EIA - many of those lines originate in La and Tx.

and this graph suggests that it 'serves all of US' comment might be (mostly) true:

Here is a report from Dow Jones Newswire:

2:56p EST
DJ US Aide: Ships Stranded Above New Orleans Gas Pipeline-Report

A senior U.S. Army Corps of Engineers official said several vessels are grounded on top of a major natural gas pipeline buried in a New Orleans canal after Hurricane Gustav struck Louisiana Monday, The Times Picayune reported on its Web site Tuesday.

Col. Al Lee, commander of the corps' New Orleans District office, said he was concerned about the grounding of two ships and two barges above a natural gas pipeline buried beneath the canal. "As you probably know, two ships and two of those huge barges are now atop a 16-inch natural gas pipeline that services the entire United States and cannot be relocated," Lee said.

"We could have affected the price of natural gas in the United States," said Brigadier Gen. Robert Van Antwerp, chief of the corps, on Monday after inspecting the canal.

Gov. Bobby Jindal and U.S. Sen. David Vitter grilled U.S. Coast Guard officials on Monday about why ships and barges weren't required to evacuate the shipping channel in advance of the hurricane, said Garret Graves, chairman of the state Coastal Protection and Restoration Authority.

The Coast Guard on Tuesday released two videos shot from a helicopter Monday that showed the barges and two ships loose in the canal.

Full story at

I believe that the following is a photo showing the situation (of the ships and barges over the NG pipeline):

A large natural gas pipeline might move 1 Bcf/day. The US uses something over 50 Bcf/day.

16 inch isn't really large for a gas line.

You're right, that sounds too small.
Here is a case where a 24" pipe @850psi was ruptured killing a workman.

I recall a 36" gas pipeline in the Northern suburbs here exploding a few years ago but can't find a link.

A 36" line blew southeast of Austin last week; felt 10 miles away, mushroom cloud, etc. But basically a line moving gas from W. Texas to Houston, and probably not the only one.

Kinder Morgan La. natgas line under force majeure

NEW YORK (Reuters) - Kinder Morgan Energy Partners' KMI.N NGPL Louisiana natural gas pipeline was under force majeure on Tuesday due to complications from Hurricane Gustav, a company spokesman.

The pipeline was currently operating at 66 percent of normal capacity, with two compressor stations shut due to loss of power, Kinder Morgan spokesman Joe Hollier said.

The company was trying to restart the compressors, which have not been damaged, with generators, but did not have a restart date set.

Entergy says 5 of 12 refineries have no power

HOUSTON (Reuters) - Entergy Corp officials said on Tuesday five of 12 refineries in Louisiana have no electricity due to extensive damage to Entergy's high-voltage grid from Hurricane Gustav.

Four refineries in the region have power and three have power, but shut for other reasons.

DowJones Newswire reports:

3:17p US Coast Guard: Flyover Shows No Visible Damage To LOOP

EST HOUSTON (Dow Jones)--A U.S. Coast Guard flight Tuesday found no visible damage at the Louisiana Offshore Oil Port in the wake of Hurricane Gustav.
LOOP officials are conducting inspections of the facility Tuesday and haven't yet given an estimated date to restart the facility, the only one in the U.S. that can handle large crude tankers from sources as diverse as Saudi Arabia and Venezuela. Forecasters feared the port was directly in Gustav's path as it came ashore Monday.
The onshore offices control pipeline connections that send oil to refineries in Louisiana, Texas and the Chicago area. The offshore port, which handles large tankers and processes more than 10% of U.S. oil imports, shut down on Saturday.

4:37p EST *DJ LOOP: Too Soon To Give Precise Restart Date

4:38p EST *LOOP: Minimal Damage Onshore Post Gustav, Hasn't Assessed Offshore Ops

4:39p EST *LOOP Restart Also Contingent On Connecting Pipelines, Refineries

Dow Jones Newswire reports:

4:56p EST:

LOOP: Expects To Restart Operations "Fairly Quickly"

NEW ORLEANS (Dow Jones)--The Louisiana Offshore Oil Port said Tuesday it is optimistic it can restart operations "fairly quickly" in the wake of Hurricane Gustav, a key assurance for U.S. crude supply and refiners operating in the region.

LOOP spokesperson Barb Hestermann said it was too soon to give a restart date for the facility, the only one in the U.S. capable of handling very large crude tankers, but she said things "look promising."

She said inspections of the onshore facility showed only minimal damage, nothing that would prevent a restart. The LOOP team hasn't yet had a chance to assess the status of the offshore port, though the U.S. Coast Guard said flyover inspections found no visible damage.

The LOOP onshore offices control pipeline connections that send oil to refineries in Louisiana, Texas and the Chicago area. The offshore port, which handles large tankers and processes more than 10% of U.S. oil imports, shut down on Saturday.

Could we have some energy industry and/or futures experts explain what declaring force majeure implies for natural gas prices? I know that people who are short futures 'contracts' and have to 'deliver' gas are given a reprieve when force majeur is in effect. The NYMEX shows on their website that:

All unfulfilled NYMEX delivery obligations in the August and September 2008 contract months continue to be subject to the Force Majeure considerations under NYMEX Rule 220.18.

How does this work? Is there an expiration? Can the parties effected play around with October futures contracts in interrim? (they were down 10% today)
If someone with more knowledge on this could expand, that would be welcome.

I am not a lawyer but I believe force majeure means that a contract is non-enforceable due to a major force that is outside of the suppliers control. In this case the supplier cannot supply the gas to the buyer due to Gustav. Force majeure just means that the buyer cannot sue the supplier to enforce the contract until force majeure ends.

Force majeure gets the supplier off the hook and leaves the buyer without product. If the buyer has enough inventory there is no impact, however if the buyer needs inventory he will have to buy it from another supplier or on the open market.

Force majeure is the legal term for what we have been talking about for a week, the oil or gas is not flowing from the GOM and the buyers needs to source it elsewhere if they need it. In the case of oil they will look to the SPR.

Ravenscroft: Of course a lawyer would argue you are incorrect. But actually you did very well with that
explanation. I might add though...the contract itself
becomes null and void since it can't be closed.

I don't believe the contract is void - the timing and location of delivery can change.

The NYMEX site states:

(6) Upon a finding of force majeure, the Panel may take any one or combination of the following actions as it deems suitable.
(a) grant an extension of time for delivery up to two months from the scheduled time;
(b) change the Buyer's or Seller's pipelines, provided that the Seller has deliverable product at the new site or will have deliverable product at such site in time for delivery, and provided further, that the Buyer and Seller can arrange to secure transportation for such delivery;
(c) allocate deliveries,
(d) modify the method or timing of payment; or
(e) refer the matter to the Board of Directors for consideration of emergency action pursuant to Article 7.

(A)grant an extension of time for delivery up to two months from the scheduled time;

This option makes the contract null and void due too
"Time is of the essence" contract clause...usually written in bold italics.
The original "MEETING OF THE MINDS" has been changed
post contract.

(B)(C)(D) and (E) all follow the same. The original contract won't be closed.
Any contract not reaching close is terminated. The difference here is no penalty due to "Force majeure"

The attempt will be made to follow as closely as possible the original intent of both parties involved
so as not to give unfair advantage or inflict unecessary harm to either parties.

What if...a party couldnt accept delivery? through no fault of their own, but by natural disaster? This protects both parties and seems fair and welcome by all involved.

Shell says Convent refinery needs power, repairs

Shell said it could begin restarting some processing units at its 220,000 barrel per day oil refinery in Norco, Louisiana, in the "next couple of days" and hopes to ramp up production rates at its 290,000 bpd joint venture Motiva refinery in Port Arthur, Texas " as soon as possible".

But it said its 235,000 bpd Motiva refinery in Convent, Louisiana, is without power and "restart of the refinery will depend on further assessments, repairs that are needed and availability of dependent resources."

Well, the Saints are marching in on Sunday, so everything will be better by then, yes?

This thread is for reports about damage to energy infrastructure. Please post other hurricane-related news to the DrumBeat.

Sorry. Would it have been ok to add that to my "800,000 people without power and it may take weeks to fix it" post? Feel free to delete.

It's probably better posted in the DrumBeat, at least if you want any discussion of it.

Dow Jones Newsire reports:

12:19p EST
Coast Guard:Air Survey Finds No Gulf Platform Damage-Bloomberg

The U.S. Coast Guard said an aerial survey of oil and natural-gas platforms and rigs in the Gulf of Mexico saw no structural damage and no oil spills, Bloomberg reported Tuesday, citing Coast Guard Chief Petty Officer Adam Wine. "All the rigs off Louisiana appear to be in good condition," he said, adding that some oil sheen, possibly from a partly sunken tug boat, had been seen on the lower Mississippi.

At 5:30 PM, without an announcement, State Police and National Guard units were told to abandon checkpoints preventing re-entry in New Orleans and other areas.

Gov. Jindal apparently vetoed the efforts by Nagin and the Parish Presidents to control re-entry.

This should speed the labor force to restart operations at refineries and other oil infrastructure.


Also a series of small F1 tornadoes in Jefferson Parish.

At 6:30 PM (presumably after some "discussions") the checkpoints went back up.

Simply unworkable "staged return" with different parishes with different times (Nagin was visibly unhappy to agree to Wednesday midnight "everyone back in", he wanted a couple more days.)

Jefferson Parish will allow all back in tomorrow at 6 PM. VERY easy to exit in Metairie and take city streets back into New Orleans.


PS: Just returned at curfew from excellent meal with Social Work PhD (and a gay Jew) and a carpenter from Trinidad via New York City. Only in New Orleans :-)

thank you for all the work everyone is doing, this is excellent information. i've been gradually succeeding in getting my friends to start frequenting this website and i think it's been getting through to them because of the determination and diligence of many who frequently post here, stories as well as comments.

i don't have any information to add about gustav's repercussions, except that i haven't been hearing detailed coverage of it from anywhere else. it's unfortunate, because like many things PO related, it's hard to learn more unless you spend time with places like theoildrum.

"The Dude" posted this, dated Sept. 1, on another thread:

Speaking of the SPR: O&G Journal: Gustav idles 12% of US refining capacity

Nineteen of the 22 major gas pipelines serving the gulf had declared force majeure, idling operations an all offshore segments of their systems.

The Sabine Pipeline gas system declared force majeure because of mandatory evacuations in Vermilion Parish, location of all of its receipt and delivery points and of the Henry Hub interconnection, the delivery point for gas-futures contracts on the New York Mercantile Exchange.

Also closed were the Strategic Petroleum Reserve facilities at Bayou Choctaw and West Hackberry, La., and at Big Hill, Tex. The Bryan Mound, Tex., SPR facility remained in operation.

The DOE office noted that 28 major gas processing plants lie in the path of the storm and were shutting down because of mandatory evacuations in Louisiana and shut-down of gathering lines.

Dow Jones Newsline reports:

6:03p EST
Noble Corporation Reports on Initial Survey Following Hurricane Gustav

SUGAR LAND, Texas, Sept 02, 2008 /PRNewswire-FirstCall via COMTEX/ -- Noble Corporation (NYSE: NE) announced today that a preliminary assessment conducted by airplane this morning revealed no apparent damage to the Company's five deepwater units operating in the U.S. Gulf of Mexico. The Company expects to complete a more comprehensive assessment of individual rigs, including the Company's three submersible units, over the next few days. It is anticipated that crew members will begin returning to their assigned rigs later today and that, subject to helicopter and crew boat availability, normal operations will be resuming as soon as possible.

"Our first priority offshore is the safety of our teams," said Noble Chairman, President and Chief Executive Officer David W. Williams. "In a major storm event, our focus turns to safely evacuating our personnel and securing our rigs to protect the environment. Once these priorities are achieved, we can turn our attention to resuming normal operations as quickly as possible."

Noble, in cooperation with its customers, initiated evacuations on August 27 and safely evacuated approximately 630 Company workers, contractors and third-party personnel from its rigs in the Gulf of Mexico prior to the storm's arrival.

oil going down regardless of this storm. speaks volumes about the state of the market. oversupplied at the current price comes to mind. the price will continue to fall until the market balanced. OPEC meeting next week. i bet they do nothing.

oversupplied at the current price comes to mind.

I'm beginning to think the price will continue to fall long after the shortages and gas lines reappear.

But the market *is* oversupplied. Crude is not sold to consumers at the gas station. It is sold to refineries. Gustav has idled the LOOP as well as refineries representing 12% of US capacity. How much does it make in terms of worldwide capacity to process crude? Something like 3% to 4%? Of course the market will lower the price when so much demand is being destroyed.

The halting of the GOM production doesn't matter in the immediate term. The SPR will make up for it.

All of this is a very short term effect. Longer term will be a different story.

But the market *is* oversupplied. Crude is not sold to consumers at the gas station. It is sold to refineries. Gustav has idled the LOOP as well as refineries representing 12% of US capacity. How much does it make in terms of worldwide capacity to process crude? Something like 3% to 4%? Of course the market will lower the price when so much demand is being destroyed.


"Crude is not sold to consumers at the gas station. It is sold to refineries."
Who in turn refine it and sell it as gasoline at the gas station.
No one "consumes" raw crude only its products, so such a distinction is meaningless.
Perhaps crude may pile up in tankers or refineries but not for lack of demand.
I'm sure the evacuations of the last week have taken a large chunk from the US's gasoline reserves, Hanna and Ike are threatening the same and from upthread part of the SPR is down as well.
Add to this the power outages to the refineries and pumping stations and you have a fundamentally bullish scenario for crude.

Yet the market continues to sell off.

Obviously whatever sentiment or force that has seized the market cares little for fundamentals.

I have a strong feeling that the market is pricing crude based on:

a) its imagination of supply-demand for the front month
b) daily headlines
c) technical data

Even by combining these three one can and will not know *anything* about the upcoming events. The market is a perfect tool to price oil for today. It is totally useless when it comes to tomorrow.

Just my 2 cents.

The mystery to me is why refined products are getting cheaper. That I don't understand. At all.

No one "consumes" raw crude only its products, so such a distinction is meaningless.

There is a difference in who pays the bill. If refineries are not willing to pay for the crude because they are down and can't process it, it does not matter how much demand there is at the gas pump. The crude doesn't get bought.

This is a short term transient thing. Once the refineries are back the bullish scenario can kick in.

If refineries are not willing to pay for the crude because they are down and can't process it, it does not matter how much demand there is at the gas pump. The crude doesn't get bought.

Exactly why I believe we may see prices of crude continue to fall, even as shortages and gas lines form.
We are seeing it now in the precious metals market as well, the price of gold drops but you can't buy an Eagle since there are none available.
One comment in your statement that is incorrect though, it matters in the extreme how much demand there is at the pump because once that demand is not met, there will be hell to pay.
Citgo asks for oil from emergency US oil reserve
09.02.08, 6:06 PM ET

WASHINGTON (Reuters) - Citgo Petroleum Corp, owned by the Venezuelan state oil company, is the only oil company so far to ask for emergency crude oil from the U.S. emergency petroleum stockpile in the aftermath of Hurricane Gustav, the Department of Energy said Tuesday.

Citgo asked for 250,000 barrels of crude oil from the Strategic Petroleum Reserve for its refinery in Lake Charles, Louisiana. The refinery's crude oil supply was disrupted when the Calacasieu Ship channel was closed. The channel was reopened Tuesday but was restricted to ships with a draft of 16 feet or less.

"The request is currently being reviewed," an energy department spokeswoman said. "Once the request is approved they will go into negotiations to deliver and ultimately replace the oil."

Hello WT,

I wonder if CITGO wants this allocation from the SPR so that it can then ship the products back to Venezuela to alleviate its own blackouts--how ironic would that be?

No way they can do that!

After Rita, power problems were a major factor delaying restart of refineries in the Port Arthur area. A lot of transmission lines were destroyed and rebuilding took a few weeks.

Power loss was also a factor in the product pipeline problems post Katrina.

It sounds like Gustav has caused a lot of power system damage, and this is likely to cause a lot of problems for refineries, natural gas processing and pipelines. I suspect that damage to the onshore infrastructure may have a much bigger impact than damage to offshore platforms.

However, power loss also reduces natural gas demand. Much of the power generation in that part of the world is natural gas fueled. If refining and chemicals plants are shut down then that reduces NG demand further. The net impact is a smaller hit to the NG market than might be expected.

i don't remember seeing posted here before - the NHC has a table of probabilistic strength of a cyclone wrt time eg. TS Ike has a 22% chance of being cat 2 on Thursday.

If I understand the table correctly, it is more serious than that.

22% chance of being a Cat2, indeed. But a 79% of being a hurricane. And the odds are growing that it wil become stronger by Friday. I.e.: as of Tuesday a combined 38% it will be Cat2-Cat4, whereas by Friday the odds of doing the same is 50%.

In other words: Ike is strenthening and the condiotions are pretty good it will do so in the next couple of days.

September 2, 2008 7:03 p.m.

HOUSTON (Dow Jones)--The Calcasieu Channel is open to inland traffic and vessels with 16-foot drafts, but oil tankers with deeper drafts than that can't transit the waterway, a U.S. Coast Guard spokesman said Tuesday afternoon.

The channel serves the Lake Charles, La., refineries.

Lake Charles, located along the Louisiana-Texas border, was spared most of the serious damage of Hurricane Gustav.

Parish officials lifted the mandatory evacuation order at noon Tuesday.

Louisiana Port May Resume Some Oil Deliveries Within a Week

By Christopher Martin
Sept. 2 (Bloomberg) -- Louisiana's Port Fourchon, partially flooded and cut off from roads by Hurricane Gustav, may be ready to service up to half of U.S. offshore rigs and platforms in the Gulf of Mexico within a week.
``We had some considerable damage from the hurricane,'' Ted Falgout, director of Port Fourchon, said today in an interview. ``We've now got crews on the ground and should be able to help service rigs within a week.''
More than 60 companies that use the port were sending teams in today to assess damage to their own equipment, Falgout said. He estimates that the port, using backup generators until utility power is restored, should be able to handle as much as 50 percent of normal traffic in a week.


Offshore Rigs in the Path of the Storm
by Phaedra Friend Rigzone Tuesday, September 02, 2008

Hurricane Gustav is not only affecting oil and gas production today, but also future production by stalling exploration efforts in the Gulf of Mexico. The US Minerals Management Service reported on Sept. 1 that staff from 100 drilling rigs was evacuated as safety precautions ahead of Hurricane Gustav. Equal to nearly 83% of the operating rigs in the GOM, there are only 21 rigs that are in operation today.

GOM Rigs Affected by Hurricane Gustav
(Click to Enlarge)

Rigs Affected by Hurricane Gustav

According to data provided by, there were a total of 74 offshore rigs that were affected by Hurricane Gustav. Thirty-two offshore rigs, including 24 jackups, one submersible, six semisubmersibles and one drillship, sustained hurricane-force winds. An additional 42 drilling rigs withstood tropical storm-force winds, including 29 jackups, 10 semisubs and three drillships.

Hurricane Force Winds Tropical Storm Force Winds

Blake 151
Cecil Provine
Dolphin 106
Hercules 101
Hercules 120
Hercules 203
Hercules 251
Hercules 257
Hercules 85
Ocean Champion
Ocean Crusader
Ocean Summit
Ocean Titan
Pool 53
Pride Arizona
Pride Florida
Pride Kansas
Ranger V
Rowan Alaska
Rowan Gorilla IV


Noble Joe Alford


Noble Jim Thompson
Ocean Quest
Transocean Amirante
Deepwater Horizon
ENSCO 7500
West Sirius


Discoverer Enterprise


Blake 202
Blake 303
Hercules 155
Hercules 201
Hercules 202
Hercules 204
Hercules 211
Hercules 252
Hercules 253
Hercules 254
Hercules 350
Ocean Spartan
Ocean Tower
Pride Alaska
Pride Georgia
Pride Nevada
Pride New Mexico
Pride Wyoming
Rowan Anchorage
Rowan Juneau


Deepwater Nautilus
Noble Amos Runner
Noble Paul Romano
Ocean Saratoga
Ocean Star
Transocean Marianas
Cajun Express
GSF Development Driller I
GSF Development Driller II
Ocean Confidence


Belford Dolphin
Discoverer Spirit
GSF CR Luigs

To better assess damage caused this hurricane season, GOMExplorer now offers users another map layer that portrays wind speeds and storm paths.

While unofficial reports have trickled in stating that damage, if any, is minimal; rig contractors are currently conducting fly-over inspections of their fleets. Official damage reports are expected in a few days.

According to this AP article

Jindal hopes the opening of the oil reserve helps reverse a severe shortage of fuel, particularly in south Louisiana. Long lines at gas stations have formed in many areas hit by the storm, because many don't have electricity and can't pump.

The action will release 250,000 barrels of oil to a Citgo refinery in Lake Charles.

I am wondering how releasing crude oil will fix an electricity outage.

Too Soon to Return, Evacuees Told

Massive power outages were among the most immediate problems, with some towns completely without electricity. More than 130 transmission lines and dozens of substations were knocked out of service, meaning Gustav was surpassed only by Hurricanes Katrina and Rita in 2005 in the destruction caused to the region's electric grid.

About 1.4 million customers are without power in Louisiana, and vast portions of the New Orleans and Baton Rouge metropolitan areas have been knocked off the national electricity grid, said Kevin Kolevar, assistant secretary of energy for electricity delivery and energy reliability.

Of immediate concern were about a dozen hospitals that had limited electricity service, raising the possibility that some of the 800 patients will need to be evacuated — in addition to the hundreds already removed to more secure facilities, Jindal said.

1.5 million without electricity in Louisiana. Power companies expect half to be reconnected within 1 to 8 days, the other half in 8 to 10 weeks. According to Gov. Jindal.

Certainly looks like there's been some serious damage to the electrical network.

Several good maps over at