Katrina may be long remembered.
Baton
from stratfor.com:
The Geopolitics of Katrina
A Category 5 hurricane, the most severe type
measured, Katrina has been reported heading
directly toward the city of New Orleans. This
would be a human catastrophe, since New Orleans
sits in a bowl below sea level. However, Katrina
is not only moving on New Orleans. It also is
moving on the Port of Southern Louisiana. Were it
to strike directly and furiously, Katrina would
not only take a massive human toll, but also an
enormous geopolitical one.
The Port of Southern Louisiana is the
fifth-largest port in the world in terms of
tonnage, and the largest port in the United
States. The only global ports larger are
Singapore, Rotterdam, Shanghai and Hong Kong. It
is bigger than Houston, Chiba and Nagoya, Antwerp
and New York/New Jersey. It is a key link in U.S.
imports and exports and critical to the global
economy.
The Port of Southern Louisiana stretches up and
down the Mississippi River for about 50 miles,
running north and south of New Orleans from St.
James to St. Charles Parish. It is the key port
for the export of grains to the rest of the
world -- corn, soybeans, wheat and animal feed.
Midwestern farmers and global consumers depend on
those exports. The United States imports crude
oil, petrochemicals, steel, fertilizers and ores
through the port. Fifteen percent of all U.S.
exports by value go through the port. Nearly half
of the exports go to Europe.
The Port of Southern Louisiana is a river port. It
depends on the navigability of the Mississippi
River. The Mississippi is notorious for changing
its course, and in southern Louisiana -- indeed
along much of its length -- levees both protect
the land from its water and maintain its course
and navigability. Dredging and other maintenance
are constant and necessary to maintain its
navigability. It is fragile.
If New Orleans is hit, the Port of Southern
Louisiana, by definition, also will be hit. No one
can predict the precise course of the storm or its
consequences. However, if we speculate on
worse-case scenarios the following consequences
jump out:
a.. The port might become in whole or part
unusable if levees burst. If the damage to the
river and port facilities could not be repaired
within 30 days when the U.S. harvests are at their
peak, the effect on global agricultural prices
could be substantial.
a.. There is a large refinery at Belle Chasse. It
is the only refinery that is seriously threatened
by the storm, but if it were to be inundated,
250,000 barrels per day would go off line.
Moreover, the threat of environmental danger would
be substantial.
a.. About 2 percent of world crude production and
roughly 25 percent of U.S.-produced crude comes
from the Gulf of Mexico and already is affected by
Katrina. Platforms in the path of Katrina have
been evacuated but others continue pumping. If
this follows normal patterns, most production will
be back on line within hours or days. However, if
a Category 5 hurricane (of which there have only
been three others in history) has a different
effect, the damage could be longer lasting.
Depending on the effect on the Port of Southern
Louisiana, the ability to ship could be affected.
a.. A narrow, two-lane highway that handles
approximately 10,000 vehicles a day, is used for
transport of cargo and petroleum products and
provides port access for thousands of employees is
threatened with closure. A closure of as long as
two weeks could rapidly push gasoline prices
higher.
At a time when oil prices are in the mid-60-dollar
range and starting to hurt, the hurricane has an
obvious effect. However, it must be borne in mind
that the Mississippi remains a key American
shipping route, particularly for the export and
import of a variety of primary commodities from
grain to oil, as well as steel and rubber. Andrew
Jackson fought hard to keep the British from
taking New Orleans because he knew it was the main
artery for U.S. trade with the world. He was right
and its role has not changed since then.
This is not a prediction. We do not know the path
of the storm and we cannot predict its effects. It
is a warning that if a Category 5 hurricane hits
the Port of Southern Louisiana and causes the
damage that is merely at the outer reach of the
probable, the effect on the global system will be
substantial. |
