Newest (and very informative and very scary) report from an anonymous insider

Original post [2005-8-31 10:30:32 by Prof. Goose]This is from an oil industry insider I consider quite credible.  She was definitely right about everything in her last post.  If she's right about this one, we may finally start to get a true picture of what's going on.  All below the fold.

Update [2005-8-31 16:02:53 by Prof. Goose]:This story has been confirmed by the Coast Guard, at least 20 rigs gone.

There are MANY production platforms missing (as in not visible from the air). This means they have been totally lost. I am talking about 10's of platforms, not single digit numbers. Each platform can have from 4 to 100+ wells on it. Most larger ones have 20-30 wells in this area, with numerous caisson wells. They are on their sides, on the bottom of the gulf - they will likely be left as reef material, provided we can get permission. MMS regulations require us to plug each of the wells that were on these platforms - HUGE cost now, as the platforms are gone... Hopefully, MMS will grant `abandon in place' status for these wiped out structures.

We also set individual wells as satellites and pipe them back to existing platforms. These stand-alone wells are called caisson wells. 90% of those in the storm path are bent over, rendering them a total loss, We would have to remove the existing bent structure and drill a new well, as bent pipe is basically unusable.

We utilize platforms as gathering hubs. We pipe the raw oil/water to them and then send it on for separation, or separate it there and send finished oil on. Damage to a hub means everything going to the hub is offline indefinitely. There are +/- 15 HUBS missing. MISSING!! As in we cannot find them from the air.

Thus even if the wells feeding the hub are ok, we have nowhere to pump the oil to...

The jackup drilling rigs appear to be in various stages of damage, but most rode the storm out with minimal problems. However, each of them has shifted position.

When we jack the rig up, it is carefully positioned directly over the well slot where we are working. The derrick has rails that allow us to slide it in 4 directions to get the derrick directly over the well or slot. If the rig moves (right/left, or from level to uneven), it has to be jacked back down to the waterline and repositioned with tugboats, then jacked back up. After it is back up and level, the derrick is slid on the 2 sets of rails, and bolted into position over the well or slot again.

Thus we have to reset each of the drilling rigs, which requires getting OUT of the well, tugboats and a move, then getting back into the well. The open hole we have drilled (what is not enclosed in cemented casing) is likely to be lost, and if the wellhead or the casing is bent, then the well will have to be redrilled. This is an exploration setback of at least a month, but we don't yet know the boat situation.

Boats are usually brought into harbor to weather storms. We do not have a boat count yet, but from the initial reports, we may have lost or grounded 30% of the Gulf of Mexico fleet. This means everything will cost more, take longer - repairs, repositioning, everything.

In short, the Gulf area hit by the storm is basically in about the same shape as Biloxi. The damage numbers you have gotten from the government and analysts are, in my opinion, much too low. We are looking at YEARS to return to the production levels we had prior to the storm. The eastern Gulf of Mexico is primarily oil production...

Loss of the MARS platform alone cost us 95,000 barrels a day for a year or maybe more.

YEARS, people. I know what this means - hope everyone else gets it too...

Click here to go to an image of a destroyed rig.

The front page of the Houston Chronicle has a rig beached on Dauphin Island. The legs have been sheared off and derrick is missing – thus it is a total loss. This rig was operating in Main Pass (adjacent to Plaquemines Parish), and thus was blown to Alabama and beached.

Update [2005-8-31 10:6:22 by Prof. Goose]:The insider asked me to attach this article to her post.

Technorati Tags: , , , , .

The link to the Houston Chronicle seems to be broken.

Is this the same picture that was on the 1st page of the business section of the NYT this morning?

yes it is.
fixed.  (thanks to carla b. and ericy)
no pix in the chron article anymore
is there something missing about this analysis.

the SPR is released and will replace missing daily oil production for the short term (say 2-4 weeks).  also since we are out refineries, we don't have enough refineries to take on oil to convert into distillates, therefore, we may begin to see some crude stocks buildup in the short term (2-4wk period).

so, may be we start to see crude prices come down in a couple wks?  only temporarily until the refineries are brought back online to start procesing oil again.

not so for gas/heating oil prices, those remain very bullish in the meantime.

What have we heard about natural gas production facililties?  I'm actually more worried about that than I am gasolline.  Lots of winter heating is dependent on natural gas, and a lot of recently contructed electric generating capacity is gas-fired.  I think the country would have more trouble adjusting to a sudden natural gas supply shock than to a gasoline shock.
I'll make three points.

First, this is a great report, and you should thank your correspondant. It's very helpful to get direct first-person reporting like this.

But second, I don't get a sense from this as to the percentage of the total gulf production infrastructure that is damaged. It sounds like this is a survey of the most badly hit areas. Bad as Katrina was, she painted a swath of damage across the gulf, but outside that zone things should be OK. We hear about 10s of platforms lost, but out of how many in the gulf? We hear about 15 hubs missing, but again, out of how many? 90% of the caisson wells in the storm path are damaged or destroyed, but how much of the total gulf production is that? It would be helpful to go back to this person and see if they would be in a position to estimate that.

Third, total gulf production was something like 1.5 mbpd. That's out of 75-80 mbpd worldwide. Even if we lose, say, half of the gulf production for a relatively long term, that's only about 1 percent of the world market. A relatively small reallocation of world supplies can make up for it. (And much GOM production is relatively sour crude, which is plentiful around the world.)

i was not aware that much of GOM production are sour.  can someone confirm that?

in regards to supply cushion, we have none.  the world has none or very little.  so missing 1-1.5 mbd of crude oil is a very big deal and very difficult to make up.  i'd imagine, besides making up for this with the SPR (which is a temporary solution), the US will eventually have to outbid poorer countries for oil - i.e. Sudan?  lol.

i was not aware that much of GOM production are sour.  can someone confirm that?

I found one reference on the EIA web site that discusses the sour oil situation, but it is a Powerpoint presentation. Drowning in Sour Oil, Adapting to a New Crude Quality Dynamic, slide 11 reads "Non-OPEC, GOM crude quality deteriorating". It has a chart labeled "Gulf of Mexico crude quality" showing the "sour share". In 2000 it was about 73%, and in 2005 it has increased to 90%.

thx, good to know, the stuff we're losing in the GOM is crappy oil.
It may be crappy, but I was under the impression that the only "spare" capacity in OPEC is equivalently bad (or worse) heavy sour crude from Saudi Arabia. The world's oil supply in general is only tending downward in API and upward in sulfur content.
this is sweet info

but does anybody know how much of the gulf region
is exported?  is this a price problem in the USA

I saw an article about gas prices being up in
the philipenes and indonesia.  I just want to
to know if catrina will bring prices up everywhere.

So far i think it will only bring prices up in
the USA.  on the oil wikipedia page it said
most of crude is sold 'over-the counter' with
pricing info coming from "platts'


Times-Picayune (NO) reports:

Some Port Fourchon docks to reopen today
By Mark Schleifstein
Staff writer

At Port Fourchon, Louisiana's sprawling oilfield service port just west
of Grand Isle, storm surge pushed water 10 feet high through the docks
and warehouses, according to Port Director Ted Falgout.

He said some docks will reopen today, as oil companies attempt to
begin re-staffing offshore facilities, but the supply line to the coast for
truck traffic has been severed.

"Vessels are now moving in and out of the port, but our inland supply chain through Bayou Lafourche is blocked by several sunken vessels and
powerlines and bridges that can't function without electricity,"
Falgout said.

I saw this over at the Agonist:

"It appears that the money has been moved in the president's budget to handle homeland security and the war in Iraq, and I suppose that's the price we pay. Nobody locally is happy that the levees can't be finished, and we are doing everything we can to make the case that this is a security issue for us." -- Walter Maestri, [still] emergency management chief for Jefferson Parish, Louisiana; New Orleans Times-Picayune, June 8, 2004

Full article:

Some homeland security policy we have.

According to a post I saw this morning, the existing system of levees in N.O. was only supposed to stop a Cat-3 hurricane.  Katrina was a large Cat-4, so the levees were NOT going to hold if Katrina hit too close.

There was a proposal to upgrade the levees to withstand a Cat-5 event, but AFAIK no construction was being done.  The federal contribution mentioned was for $55m for a planning study.  Dozens (if not hundreds) of miles of levees would have to be increased in height by nearly 50% (15ft to 22ft or more!).  Earthen levees would have to be at least 50% wider.  The project would have cost billions - $55m doesn't buy more than a few yards of levee, and it's no good until its ALL finished.

Whatever major changes are planned for N.O. in the future, their economic cost will be small next to the losses we've already seen and will continue to feel.  The direct costs of the hurricane may be $25bn or more, and the long term economic costs will be far greater, to say nothing of shattered lives and communities.

This item presents evidence that the disaster in NO was as much manmade as natural,
That Commondreams article is hogwash.  

  1.  Of course federal money to SELA was being reduced: the Cat-3 levees were nearly completed, so construction costs were declining.  I've seen no reports that the sections of levee that broke were the sections that had not been upgraded to Cat-3 yet.

  2.  Again: the proposed Cat-5 levees have NOT even reached the design stage.  You can call for more funding all you want, but it'll take 10 years and a couple billion dollars to complete the levees - and they're no good until you finish them ALL.
Snort.  According to who -  Oh, yeah, there's an objective source of information.

The commondreams article seems to be based upon stories in the Times-Picayune.  If one wanted a good source of local information in New Orleans, that would be the first place I would turn.

Son, your are talking utter cr*p. You give me the funding I'LL build your levies in a time directly proportional to the money available. 10 years!! wot a load!!

The Brits built the channel tunnel in 7 years (design and construct)

The Dutch keep out the North Sea every day!!! and whilst they don't have hurricanes the coast is severely battered constantly.

Go back to school son and think before you speak. The US can have these things done and dusted to a schedule governed by their desire and commitment.

Good post, Eroie--
We forget that higher levees lead us to believe we can hold back nature. It's just folly to build a major city, subject to major storms, below sea level. If you do build theere, then prepare. The flood/storm preparation that the Netherlands and the British have invested in seems to dwarf the fairly primitive earthen levees in NO.
Hold on a sec.  Nobody deliberately built a major city where NOLA is today.  This is the mouth of a major rover we're talking about.  It was inevitable that it would become a port and it was equally inevitable that communities such as NO and Gulfport would have been established to house the port workers.  Commerce inevitably follows workers and from there the city more or less expanded over time on its own, as cities do, developing one direction and then another as driven by the cat's paws of money and politics.  Why NO was establish on that exact spot is anybody's guess, but I'd bet that, at the time, the place was no farther below sea level than most other nearby spots.  It may not make sense to have over a million people living there now, but that's not how it started.

Moreover, New Orleans is not like, say, the vacation communities built on sandbars along the Atlantic Coast.  Its existence was never frivolous.

The problem is that the mouth of a major river like the Mississippi is inherently a dynamic place. Before NO was built (and in its early days) the river would flood regularly, depositing new sediment and rearranging the shape of the land and the course of the river. The problem is, humans desire stability. So the Army Corps of Engineers wrestled with the great river and tamed it, putting it between walls and forcing it into a specific channel. This let people build docks and cities on the very banks of the river, without fear of floods or of a change in course that could leave a dock high and dry.

Unfortunately, deprived of the annual replenishment of soil carried by the floods, the city is slowly sinking into the soft mud on which it is built. That's why it is now 6 feet below sea level on average. The flat barges that would float down the river were level with the rooftops of the buildings nearby.

Most observers viewed catastrophe as inevitable. If not in this form, then in the form of the river escaping its bounds and changing course as it naturally used to do every few years or decades, abandoning New Orleans and all the facilities built around the river. That problem still lies ahead.

Ultimately I think we need to take a different approach to managing the mouth of the Mississippi. We have to find a way to be more accommodating to the river's dynamism and not try to treat it like a piece of machinery that we can just shape as we desire and expect it to stay that way. It's almost more like a living organism. We need to let it move and change and be dynamic, and adjust our infrastructure to be flexible enough to adapt. Otherwise we will be facing another such catastrophe in a few years or decades.

Read the article linked below then tell me the USA in not capable of protecting one of it's most historical land mark cities. You guys have got to stop pontificating about side issue that are just subjective opinion and pull together to get the job done.
If this had happened in Europe the whole surrounding population would be out digging n pumping. instead you all out shooting each other till even the local cops give up. Get some of the Dunkirk spirit. and national pride!!!

Loss of Shell's MARS platform means loss of 95,000 a day or 6.3% of GOM production, all by itself. 2.5 times that would probably not be an unreasonable assumption of lost volume from the storm, if MARS is a premier producer and the losses outlined above are lower tier.

Just what-iffing...

Please see Belly of the Beast for a picture of the damage to Shell's flagship Mars platform.
I would imagine most of the facilities at the Fourchon docks have generators. I would also imagine they can get fueled via boats. And boats are the only way to get repair materials moving with the highway and drawbridges out.

I would also imagine that other port facilities will be sending stuff to Fourchon to get them back up (Cameron and Intracoastal City in Louisiana are both large offshore dock centers). Otherwise the oil companies will have to wait until the road is re-opened to get going.

Also, won't most of these rigs and platforms have to be structurally inspected if they have any damage from impact? Or do people just restart the generators and get back to work willy-nilly?

I heard that there were 3-4 rigs actually lost, as in destroyed. With the 5 leaving for Saudi Arabia, won't that make the rig market very tight, resulting in even higher drilling costs? I looked and there are 94 jackup rigs in the Gulf. If 5 leave and 3-4 are destroyed, that is a loss of 10% of the jackup fleet...

Day three - 91% oil and 83% NG still shut out:
man those GOMEX numbers are going to turn out to be LOW...
Lets do an Ivan comparison:

Date / Oil / Gas
Sept 15 - 78 / 49%
Sept 16 - 83 / 53
Sept 17 - 73 / 42
Sept 20 - 41 / 24
Sept 21 - 39 / 23
Sept 22 - 34 / 19
Sept 23 - 28 / 19
Sept 24 - 28 / 19
Sept 27 - 28 / 19
Sept 28 - 29 / 19
Sept 29 - 29 / 19
Sept 30 - 29 / 19
Oct. 01 - 29 / 19

... getting bored here. Ivan, much less destructive, kept near 30 / 20 percent of oil and gas off line for some time. Lets see how fast, or not, Katrina damage is mitigated in the early days, that ought to be some sort of predictor.

Report of damage cumulative to Sept 22 2004:

Preliminary reports show that few of the 4,000 platforms or the 117 rigs working in the Gulf sustained major damage.  Of the 33,000 miles of pipeline, thirteen leaks have been reported, and most of the 25,000 to 30,000 workers involved in the production of offshore oil and natural gas are back at work.

Preliminary assessments of major damage reported by industry indicate the following:

 5   Mobile Offshore Drilling Units (MODU) were adrift.  All have been located.  One MODU was reported to be leaning about 3 degrees.  Companies are in the process of reoccupying these facilities to assess the damage onsite.

 7   Fixed platforms have been destroyed.

 1   Fixed platform is reported as leaning.

 1   Rig derrick installed on a SPAR is missing.

 1   Platform rig derrick was seen leaning over the edge of the SPAR on which it was installed.

 2   Spars with extensive damage.

 1   MODU  with extensive damage.

 4   Platforms with extensive damage

13  Pipelines leaks were reported  - 1 resulted in a fire which is now burned out.

Concerning Cat 3 for the levees, there was a question-and-answer  posting with the Army Corps of Engineers on the WWL-TV website ( which stated:

"Q.2. Why did the levees fail?
A.2. What failed were actually floodwalls, not levees. This was caused by overtopping which caused scouring, or an eating away of the earthen support, which then basically undermined the wall.
These walls and levees were designed to withstand a fast moving category 3 hurricane. Katrina was a strong 4 at landfall, and conditions exceeded the design.
Q.3. Why only Category 3 protection?
A.3. That is what we were authorized to do."

This is what we were authorized to do! Why?

Ev, where would you have gotten the hundreds of billions dollers to build the Category 5 protection?
Gee whiz, when you put it that way, I guess $25 billion in damages is a real bargain.
Bush said Congress should make permanent all of the $1.85 trillion in tax cuts enacted during his first term,
President Bush Calls for Permanent Tax Cuts August 9, 2005

yeah, where are we going to find that money?

Tax cuts: Good
Government Boondoggle Projects: Bad
Ok, now that you've established your ability parrot talking points, how about we settle the question: what is more important--tax cuts for the top 1% or emergency prepardness for the country?  
Four legs good, two legs baaad.

This after Hurricane Ivan in 2004:

"It's possible to protect New Orleans from a Category 5 hurricane," said Al Naomi, senior project manager for the Corps of Engineers. "But we've got to start. To do nothing is tantamount to negligence."
It could take 20 years and at least $1 billion to raise the levees high enough and to build floodgates at the mouth of Lake Pontchartrain, Naomi said.
The corps hoped to begin a study this year of the steps necessary and the costs. Just the study would take four years and cost $4 million, Naomi said, but the money is not in the federal budget for 2005, though the Senate has yet to act."

In 2000, Shea Penland, geologist  and professor at the University of New Orleans:

It would cost a billion or two dollars to make the levee 30 feet high. A major flood with loss of life could cost $10 billion. What's wrong with this picture? If we know the worst-case scenario is billions and it would take a billion or two to prevent it, why don't we do it? I don't think anyone's thinking about it."

Another perspective, which takes into account the problem of the disappearing wetlands surrounding the area, is available in this Scientific American article from 2001 at: pictures/New%20Orleans.pdf  (Google for the link as the direct link does not work.)

The problem is complex . But it has been known for many years that the levees afforded protection only up to a category 3 storm and that a slow-moving 4 or any five would be disastrous. Yet much that could have been done to lessen the effects of this tragedy was not done. And this from many voices from that area and before the fact. There is simply no honest way to slough this horror all off on nature.

In my own area it took Andrew to get the building codes improved to fully recognize that we live in a hurricane-prone area. In other words, a loss of around $26 billion dollars, thousands of homes smashed to bits and 13 dead. We still have not addressed zoning practices which encourage building in dangerous areas.

$15 billion over 5 years.  That was the price tag, in 2000, that the CoE put on a comprehensive project to bring the whole region up to Cat 5 standards plus major re-engineering of the waterflow to help restore the barrier wetlands and more.  For the cost-conscious, that amounts to about 5 bucks per year out of the average taxpayer's pocket.  It was one of the first things to get cut to offset Bush's tax cuts.  However you feel about the role of government, it seems to me that going all out to protect the fifth largest shipping port in the world and the local communities that support it is exactly the kind of thing I'd want government to handle, especially considering the huge percentage of our energy infrastructure that's located there.  This isn't an ideological argument, it's just plain practical.  
Check out this article.. perhaps someone could get it to the US army engineers. Seems like you could just dredge up sand spray with this stuff and there you go. Bit simplistic but if you read about this stuff it sounds like it could be used to save costs and time and the final product is better that normal earth or concrete dykes.

Refinery update from AP

Oil refineries still shut down.

(AP) - Eight Gulf of Mexico refineries remain shut and one is
at a reduced rate while damage from Hurricane Katrina continues to be
assessed by oil and gas companies.

Access to some of the refineries is difficult. Conditions at those
are as follows:

_ Baton Rouge, La. - At nearly 394,000 barrels a day, one of the gulf's
largest refinery owned by Exxon Mobil Corp. is running at a reduced

_ Pascagoula, Miss. - Chevron Corp.'s 325,000 barrel a day refinery
remains shut. The company says access to the refinery remains

_ Norco, La. - Valero Energy Corp.'s St. Charles refinery is not likely
to resume its 260,000 barrel a day operations for up to two weeks.

_ Garyville, La. - Marathon Oil Corp.'s 245,000 barrel a day refinery
remains shut. Access is limited.

_ Belle Chasse, La. - ConocoPhillips' Alliance refinery remains shut
while the company continues to assess damage to the 255,000 barrel a day

_ Convent, La. -- Motiva Enterprises's 255,000 barrel a day facility
sustained minimal damage.

_ Norco, La. - Access to Motiva Enterprises's 242,000 barrel a day
refinery is limited, so damage still is being assessed.

_ Chalmette, La. - Exxon Mobil has not been able to visit the 183,000
barrel a day refinery, which shut down on Sunday.

_ Meraux, La. - The 125,000 barrel a day facility by Murphy Oil Corp.
remains shut down as access remains limited.

That's 1.9 mbpd offline, and 400K bpd at "reduced" rates.  Of the off-line facilities, only ONE has been examined and found to have "minimal" damage.

Here's AP on refineries:

Oil refineries still shut down.

(AP) - Eight Gulf of Mexico refineries remain shut and one is
at a reduced rate while damage from Hurricane Katrina continues to be
assessed by oil and gas companies.

Access to some of the refineries is difficult. Conditions at those
are as follows:

_ Baton Rouge, La. - At nearly 394,000 barrels a day, one of the gulf's
largest refinery owned by Exxon Mobil Corp. is running at a reduced

_ Pascagoula, Miss. - Chevron Corp.'s 325,000 barrel a day refinery
remains shut. The company says access to the refinery remains

_ Norco, La. - Valero Energy Corp.'s St. Charles refinery is not likely
to resume its 260,000 barrel a day operations for up to two weeks.

_ Garyville, La. - Marathon Oil Corp.'s 245,000 barrel a day refinery
remains shut. Access is limited.

_ Belle Chasse, La. - ConocoPhillips' Alliance refinery remains shut
while the company continues to assess damage to the 255,000 barrel a day

_ Convent, La. -- Motiva Enterprises's 255,000 barrel a day facility
sustained minimal damage.

_ Norco, La. - Access to Motiva Enterprises's 242,000 barrel a day
refinery is limited, so damage still is being assessed.

_ Chalmette, La. - Exxon Mobil has not been able to visit the 183,000
barrel a day refinery, which shut down on Sunday.

_ Meraux, La. - The 125,000 barrel a day facility by Murphy Oil Corp.
remains shut down as access remains limited.

A thank you to all the knowledgable oil people posting to this site.  The data and links continue to be excellent and well ahead of other media outlets.

People I talk to still are not accepting the magnitude of this event or don't want to believe the accuracy because of the source, a web site.

In my opinion we have a big problem.  The data here is accurate and timely but is competing with mass communications which is slow and often innacurate with respect to facts.  Now it's an uphill battle convincing them that what they were previously told is wrong.  They are going to be extremely mad when they find out how bad it really is.

I am open to suggestions on how to inform people of why the details of storm damage and peak oil are critical to predicting price increases and scarcity.  People still expect things to just be worked out but have no rational basis for this belief.

Thanks again for the details it helps me to plan for the future.

a good point is mentioned here:

what are the best plans for consumers if
the investors and burecrats keep acting

there should a section for where to go
if each country has to become self sustaining

and when should we start lining up at the gas pump
or just skip down and drive to ?where?

i know it sounds alarmist but this stuff if too fun

A report from my vessel via sat phone....Fourchon is fairly bad but not totally destroyed.... all platforms in west delta,so. tim.,bay marchand areas have at very least some damage. A few platforms are missing. A note for marine interests, They are still there just underwater navigate carefully in these areas.

My Company operates from Golden Meadow La. and reports are damage not severe just bad. office is up and running (on generator) So I would assume the same for most in the area.

can we start a betting pool on the future?

i want a link on the top of the page that is
an open thread on future prediciton
and then we rate the predictions with stars
like books on amazon or instant polls and then
instead of just linear posts we could get a
community consensus on what will happen in the

i want 'the oil drum' people to able to say with
a democratic voice here is what will happen
in the future and we can all vote on it and
see you wins and comments could be used to
verify or question the content of the future claim

week, month and year prediction pages would be great

is this do-able in a blog format?

and these posts are really good, thank you

If there's a reasonable way to do it, then it would definitely be interesting.

One suggestion: Do NOT call it a betting pool.  Call it The OD Consensus or something similar.  "Betting pool" has the wrong connotation, IMO.

A German newspaper, "Die Welt", is reporting 20 oil platforms missing and a natural gas pipeline in flames, according to Robert Reed of the Louisiana Coast Guard.

I have put together a crude but relevant call for political action in response to the economic crisis which seems a probable follow-on to Katrina.


"b. be prepared for environmental concessions

Different states and regions have different legal standards for
gasoline. This means that a refinery in one state can't supply gas to
a different state. If the predicted emergency unfolds, this will
become untenable. Should a call from the administration arise to
relax gas standards temporarily, it is probably best for the left to
endorse this idea."

This is an interesting idea.  Let's take care to preserve the environment unless, of course, we really need to have some gasoline.  Or let's not burn mercury/sulfur laden coal unless we really want electricity.  Jared Diamond's COLLAPSE points out how a culture is likely to prefer its old ways of doing things to making vital changes.  Peak oil is thought by some to hold the hope of curbing global warming, but it may do just the opposite as people strive to maintain a disappearing past.

If the issue is simply divergent standards, why not simply impose the most stringent, or get all states to agree to 1 to 3 different standard "mixes".

You ask "If the issue is simply divergent standards, why not simply impose the most stringent [on all states...]"

Because (afaict) most refineries can't meet the most stringent standards in their current state and what I'm discussing is a temporary response to an immediate crisis.   It's not like they just flip a switch to mix ethanol in etc.  (Isn't that ancient news to readers of this site?)

Peak oil may very well be (let's hope?) the occaision of a shift in consumption patterns but that doesn't imply transitions shouldn't be managed with care.


I don't claim any insider knowledge, but according to a program I saw on either Discovery Channel or History Channel recently, what refineries ship is plain old gasoline. The additives are added at local distribution centers. I recently saw a posting on one of these blogs that said ethanol cannot be shipped via pipeline. Perhaps someone here knows the truth about these things. If these things are true, then relaxing the standards would seem to contribute very little to shortage abatement. It seems it would benefit industry profit margins though by reducing additive costs, everywhere. Given the CIC's record to date, that seems reason enough to do it.
Geopolitical Diary: Tuesday, Aug. 30, 2005
August 31, 2005 02 55  GMT

Hurricane Katrina rotated back onto radar again Tuesday. On Aug. 29, we had reached the conclusion that Katrina's impact was geopolitically non-critical; the information that we were seeing indicated the effect was limited. In retrospect, the fact was that we were not receiving much information at all. We took the relative silence as an indication of limited damage. Put simply, we assumed that there would be loud noises associated with disaster.

In fact, Louisiana -- and parts of Mississippi as well -- had returned to a pre-industrial stage. There were few to zero electromagnetic communications. Under those conditions, information normally would spread by physical transport -- humans moving around. But humans were not moving around in the hurricane zone Monday. Roads were impassable. Boats were dangerous. Walking was slow, if possible at all. Information, in other words, was locked down.

The situation did not improve much Tuesday, but some information was flowing, gathered primarily by aircraft and some Coast Guard cutters on the river. Information from New Orleans was better, in terms of quality rather than pleasantness. However, information from the rest of the area was sparse, contradictory and ultimately unreliable. By midday Tuesday, we concluded that we did not actually know what the situation was in the disaster zone, particularly south of New Orleans. What information we had was so spotty and contradictory that relying on it was dangerous.

In other words, more than 24 hours after the worst of the hurricane had passed, intelligence could not answer the key questions:

  1. Was the Mississippi still fully navigable?
  2. What was the condition of the port facilities?
  3. Was the LOOP, the off-loading point for super tankers, functional?
  4. What was the condition of the oil platforms in the Gulf?

The inability to really begin to answer these questions is the most alarming aspect of the situation. The fact that information is not flowing from the affected areas at all is an indicator of how disrupted the situation is. No one is coming out, and no one really is going in. It does not allow us to draw worst-case conclusions, such as that the Mississippi River is no longer navigable or that the port, LOOP and platforms have been destroyed. At the same time, the fact that information cannot flow out of the area indicates that the damage is extraordinarily severe.

By the end of the day, we began receiving unconfirmed bits of good news. One source reported that the LOOP was relatively undamaged. Another reported that the Mississippi remains passable and that no vessels were sunk and blocking it. No major silting problems had been found. As promising as these reports were, however, they were coming from single rather than multiple sources and they were based on very limited sampling. So, for example, we learned that a Coast Guard cutter, the Sturgeon, was on its way to the LOOP, but not yet there. Rumors are starting to flow, and they are positive -- but not definitive.

What appears to be definitive is that New Orleans ultimately might survive as a city, but that it will not be functioning for a very long time. Patients are being taken out of New Orleans hospitals rather than being taken to those hospitals. Emergency crews are running out of fuel. That is an indication of the degree of system collapse. It is clear that New Orleans will not be supporting a substantial population for quite a while. That means that the labor force of southern Louisiana has been dramatically reshaped -- and that means that the availability or labor has contracted. Indeed, we are prepared to speculate that those who fled from Katrina through southern Louisiana will not be returning for quite a while. That means that personnel to operate key facilities aren't going to be there.

We will certainly know the status of things within 24 more hours. At the very least, aerial surveys and selective landings by helicopter will tell us a great deal about how long it will take for the region to recuperate. We would be very surprised if the truth about the situation on the ground has not emerged by the night of Aug. 31. But the fact is that, extraordinary as it sounds in an advanced industrialized country, there is not yet a clear picture of what happened from New Orleans on south.

Katrina was a Category 5 when it went through the offshore platforms, wells and hubs. This "insider" news is not shocking in that sense. I expect verificaton of these reports in the next 24 hours and they are already coming in.

"We are looking at YEARS to return to the [crude & gas] production levels we had prior to the storm" -- if that's the case, then near-term measures involving the SPR mean nothing. However, a bad precedent has been set here involving temporarily rescinding the Clean Air Act to allow immediate refining of sour crude oil [= a crude oil containing hydrogen sulfide, carbon dioxide or mercaptans]. So, rather than engage in sensible and effective conservation programs immediately, it looks to me like we're going to go in the entirely wrong direction as usual.

Transocean's Deepwater Nautilus Damaged During Hurricane Katrina

A preliminary inspection of the company's semisubmersible rig Deepwater Nautilus has revealed significant damage to the rig's mooring system and the loss of approximately 3,200 feet of marine riser and a portion of the unit's subsea well control system which remained suspended at the time the unit was evacuated. The rig, which was previously reported to have drifted off location, has been secured by an offshore service vessel approximately 80 miles from its moored position prior to the storm.

Shell Says Facilities, Pipeline Hit by Hurricane Katrina Remain Shut

After markets closed CNBC had a telephone interview with power util Entergy president -- sounds like just getting high voltage lines will be a week to ten days; the real probalm for them is many substations down, flooded, inaccessible.

Sounded as if, even with salt water damage, they must be considering a restart of some of these facilities with the view that all the equipment / infrastructure will eventually need to be replaced - reliability, if they get them running, will be low.

Longer it takes to drain and clean the less likely this scenario is, I would imagine, but perhaps a HV power engineer with salt water experience is reading and can speak up.

New Orleans and Area - down months, and that's only after its drained and assessed.

Other less affected areas - best case 10 days

Suspect they are still accumulating assessments... they still don't know how much equip and material and manpower they will need, perhaps these estimates may get longer...

The New York times is publishing essentially the same refinery shutdowns, and capacities, as the AP reports above. A nice graphic of the GOM's share of US gas and oil production, and a map of shallow and deep water wells at:

It looks to me like the unidentified destroyed oil rig in the photo linked to this report is actually the Shell MARS platform... which Shell has been been describing as having 'some topside damage'. Compare the unknown rig with the MARS promo shot posted at
That is the Mars Platform - Shell's flagship in the gulf.
In Hazleton, Pa., a city of 25,000 souls just south of Wilkes-Barre in eastern Pennsylvania, the day dawned with the per-gallon price having risen 14 cents overnight. At 1700 EDT Tuesday, the PPG stood at $2.55. By 0800 today, it had risen to $2.69. By noon it was another 10 cents. There followed another price hike at mid-afternoon. Things settled down by 1700 EDT, with the inner-city and suburban stations all agreeing on $2.99 for the regular grade. Ah, but in the outer suburbs some 6 miles from downtown, one cigarette store/gas station had stoppped at $2.75.
There was panic buying in progress when I passed on my way home. Vehicles were lined up at 10-deep to access the two pump islands. Of course, the gas being pumped there was the same that sold a day before for $2.55. An immediate tight supply driving the price hikes? Or just jitters?
On Pipelines:

"The lack of power could also hamper or delay the release of oil from the oil reserve. Speaking on CNN, Mr. Bodman said there were two major pipelines that can deliver oil to the refiners, but that both still lacked power. "We are now working with both companies," he said, "to get these lines up and functioning."

... Also, pipelines that bring refined gasoline from the Gulf Coast area to the Northeast are not operating because power failures.

"There is going to be pain long after because we were already short," he said. "This pushed a very, very tight situation over the line. While we can ameliorate pain, we cannot eliminate it."

The pipelines, the Colonial and Plantation, supply most of the gasoline, diesel fuel and jet fuel to much of the Eastern half of the United States are not operating because critical pumps in Louisiana and Mississippi do not have electricity, the Department of Energy reported today. The government was working with power companies and emergency responders to get power restored to those installations."

Washington - At least 20 oil rigs and platforms are missing in the Gulf of Mexico and a ruptured gas pipeline is on fire after Hurricane Katrina tore through the region, a US Coast Guard official said on Wednesday.

"We have confirmed at least 20 rigs or platforms missing, either sunk or adrift, and one confirmed fire where a rig was," petty officer Robert Reed of the Louisiana Coast Guard said. 8-1785_1763118

Rigzone reports that LOOP and the Capline pipeline has managed to regain power and are arranging to make deliveries of crude to the Exxon refinery at Baton Rouge. Without the other refineries operating though there will be insifficient refined products.
HOUSTON, Sept. 1 PRNewswire-FirstCall -- Apache Corporation (NYSE and Nasdaq: APA - News) said it has reported to the U.S. Minerals Management Service and the U.S. Coast Guard that it lost eight of its production platforms in Hurricane Katrina.

The platforms lost to the storm were: Main Pass 312-JA; South Timbalier 161-A; South Pass (SP) 62-A; SP 62-B; West Delta (WD) 103-A; WD 103-B; WD 104- C; and WD 133-B.

Aggregate gross production from the eight lost platforms was 7,158 barrels of oil and 12.1 million cubic feet of gas per day before the storm.

A detailed inspection of damage to other facilities is under way. Apache personnel have begun the process of restoring production as pipeline and processing facilities become available.

90.43 / 78.66% oil/gas shut in vis 91/83 yesterday
The cumulative shut-in oil production for the period 8/26/05-9/1/05 is 7,441,566 bbls, which is equivalent to 1.359% of the yearly production of oil in the GOM (approximately 547.5 million barrels).


Believe I just caught Coast Guard on CNN / news conference starting to talk about ASSISTING IN RESTABLISHING OFF SHORE INFRASTUCTURE

could be an indication of how bad things are, but may be just the common sense thing to say and do given times.

anything more on this mw?
problem with alcohol is that it is soluble in water.

so you add alcohol to gasoline that's fine, it's soluble in gasoline as well.

but if some humidity gets into the gasoline then the alcohol is attracted to the water and can drop out of solution.

so you end up with whatever amount of alcohol is mixed in with the gas coming out of solution.

imagine your gas tank filled with 90% gasoline and 10% vodka. Gives you an idea.

There were big problems with this in Australia and people's engines got wrecked.

They were mixing in as much as 25% alcohol with the fuel (they were meant to put in 5-10% but people got greedy.)

There are also stories of people buying paint thinner and mixing it in with the gas.

Paint thinner has no tax on it so it is very cheap. Some dogey gas stations in Australia were mixing upto 50% paint thinner into their stocks.

You can google for the articles, it was 3-4 years ago now.

The paint thinner runs the car OK, but can damage seals. It also gives you lousy power and lousy gas milegae.

Some people sued the petrol stations when there cars were wrecked by these practices.

I am sure I got one or two tank fulls. I remember one time I filled up the car ran like a dog and ate the tank nearly twice as fast.

but any way to cut a long story short, that is why you can't send alcohol through pipelines because any humdity messes it up for blending with gasoline.
Good news for those still stranded & dehydrating to death in New Orleans,  Mr Michael Brown the director of FEMA has held one previous job as Commissioner of the Arabian Horse Association.  Should come in handy when talking utter horse sh*te to all and sundry.