Oil industry bracing for the storms
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COMPANIES SAY THEY'RE PREPARED FOR PREDICTED BUSY SEASON
By Kevin G. Hall
Sat, Jul. 01
McClatchy Washington Bureau
DEER PARK, Texas - With weather forecasters expecting an ``above-average'' hurricane season, government regulators and major players in the energy sector hope errors made last year during Hurricanes Katrina and Rita won't be repeated.
Mistakes and mechanical failures coupled with last year's unprecedented back-to-back severe storms disrupted U.S. oil production and gasoline distribution and sent global oil prices soaring past $70 a barrel and gasoline above $3 a gallon. Natural gas prices also doubled.
In the suburbs of Houston, the nation's energy capital, oil producers, refiners and pipeline operators report that Katrina and Rita punched holes in what they had thought were water-tight emergency plans. Energy companies couldn't communicate with government responders or even internally.
Now, the National Oceanic and Atmospheric Administration believes there's an 80 percent chance of an above-average hurricane season this year.
``If we see some major storm in the Gulf of Mexico, we could see crude above $80'' a barrel, said Phil Flynn, vice president of Alaron Trading, a Chicago company that trades in contracts for future delivery of oil. ``It's going to take longer to bounce back, since we're still not bounced back from last year.''
Energy companies have spent months honing their response plans to include the hard lessons learned from Katrina and Rita.
``We know we can't rely on cell phones and computers,'' said David McKinney, a community outreach director for Royal Dutch Shell's Deer Park refinery, outside Houston.
The inability to communicate with key personnel and the authorities was a principal problem last year. Now, at Shell's Texas and Louisiana onshore operations, key personnel are armed with satellite phones and BlackBerrys, which allow text messaging even when cell towers have been destroyed.
Shell's Gulf Coast refineries also learned that sending personnel home three days before landfall didn't leave them enough time to prepare for a storm.
``The biggest lesson we learned is we need to start earlier,'' said Colleen Hutchings, health and safety director at Deer Park.
Essential employees now will be sent home five days before a storm's potential landfall to prepare their homes and move their families so that they can return to work and focus on storm plans that could affect national fuel supplies.
Refineries had trouble getting essential personnel back into the Houston area after Rita prompted an unprecedented mandatory evacuation. That affected the restart of operations and thus the production and distribution of gasoline.
This year, key energy employees in the Houston area have been given special ID badges. Law enforcement agencies have been instructed to recognize these badges and allow their holders back in.
Failures by the Federal Emergency Management Agency and the Department of Homeland Security were well-documented after Katrina. The American Petroleum Institute, the industry's trade group, has hosted numerous meetings with government agencies in Washington, D.C., to create clearer communication guidelines. Energy companies want federal officials to give priority to the restoration of electric grids or alternative power sources to keep refineries and pipelines operating.
After both hurricanes, gasoline supplies reaching Georgia, the Carolinas and mid-Atlantic states were insufficient because emergency responders confiscated generators that pipeline operators had booked for use. The generators were intended to maintain the pressure needed to keep pushing large volumes of gasoline northeast.
``It's not industry's decision to say it is more appropriate to have a generator at a pipeline or refinery than a hospital, but what we do need is a more improved prioritization system,'' said Cindy Gordon, API's refining-issues manager.
Kevin Kolevar, who heads the Department of Energy's Office of Electricity Delivery and Energy Reliability, said ``there was a heck of a lot of confiscation going on'' by local, state and federal agencies. His office is working to improve the way responders and the private sector interact during natural disasters to better track vital resources like generators.
``We're working to make sure there are clear lines of communication,'' Kolevar said. |
