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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (146)	8/30/2005 9:32:14 PM
From: Slagle	Respond to of 219525

Energyplay, Re: "New Orleans" That should put bring the water level up nearly to Canal Street @ St. Charles Avenue and put water in at least part of the Quarter, right? But Magazine is already under water. I spent part of the afternoon with a guy from Baton Rouge and he says upper Louisiana is expecting a deluge of people from the south of the state, many of them permanently. He says he thinks that parts of New Orleans will not be rebuilt, the lower parts of Metarie and even some of the crescent. The Quarter being higher than much of the rest can be saved. The city is sinking in the Louisiana mud. Nothing can be done. Slagle

To: energyplay who wrote (146)	8/30/2005 10:48:13 PM
From: TobagoJack	Read Replies (1) \| Respond to of 219525

U.S.: Crisis in Southern Louisiana (by Stratfor) Although search-and-rescue operations remained the top priority of U.S. federal and Louisiana state authorities in the New Orleans area Aug. 30, the general consensus is that the region's main infrastructure network took a major hit from Hurricane Katrina -- and that it will be weeks at best before the crisis subsides. The eyewall -- the most deadly part of a hurricane -- swept directly across the lower Mississippi delta. Shipping industry sources report that the situation on the Mississippi River is extremely bleak. The river is closed to navigation and restoration to "normal" traffic flows is likely to take at least a month. As water rises in New Orleans, and spreads into the historic French Quarter, the city has become more of a hindrance than a help in efforts to assess regional infrastructure damage -- and get the region's economy back on track as soon as possible. Furthermore, if all pumps in below-sea-level New Orleans were working -- which they are not -- the bowl in which New Orleans sits would still take three weeks to empty. Following is an initial assessment of the damage to the southern Louisiana energy and import-export infrastructure: Most roads either are cut off or blocked by debris. New Orleans Mayor Ray Nagin says that Louisiana State Highway 1 -- the backbone highway that crosses the state diagonally from the extreme northwest corner to Grand Isle on the Gulf of Mexico near the extreme southeast corner of the state -- is closed in the affected area. State Highway 39 also is closed because of debris and other problems. The executive director of the Grand Isle Port says the port essentially is wiped out and the industrial region surrounding it is in ruins. Damage assessments at Port Fourchon are being hampered because several large ships are beached on the highway leading to the port. The port is home to three-fourths of the support services to the Gulf's deepwater oil and gas facilities and the land base for the oil off-loading facility known as the Louisiana Offshore Oil Port (LOOP). At the very least the channels that allow ship access will need to be cleared. Oil-services facilities in the city of Venice, the closest such facility to Port Fourchon, have been completely destroyed. The city of Cutoff also is reporting massive damage via extremely sporadic communications. Shipping sources report that the Port of New Orleans, for all practical purposes, is gone. Damage along the Port of South Louisiana, a series of dozens of interlinked docks and trade service infrastructure, appears to be heavily damaged. Cellular and landline communications are down throughout the region. The situation on the Mississippi River is dire. The U.S. Coast Guard only recently began surveying the channel to look for wrecks -- and already has found many. Shipping industry sources say most barges are intact and their crews are well, but the one remaining open road to and from New Orleans will make re-supply and rotation difficult. In essence, the crews have become refugees in their barges. All electronic aids to navigation have been disrupted and are either nonfunctioning or destroyed. Although navigation is possible using GPS systems, massive quantities of debris will keep barges where they are. The river is closed to all civilian navigation to mile marker 507 in Natchez, Mississippi -- about halfway to Arkansas. The Coast Guard has been forced to relocate its staff upstream to Alexandria, about 200 miles from New Orleans. The U.S. Agriculture Department has begun debate on transporting grains -- especially soybeans and corn -- to Louisiana and Mississippi by rail, but no decisions have been confirmed. The rail industry already is expecting a shortage of rolling stock because the drought in the Ohio River valley is forcing some shipments to travel by rail instead of river. Because barges on the lower Mississippi are at a standstill, there are doubts agricultural producers will be able to ship grain into the region by the end of September. Soybean harvest begins in two weeks, and national soybean storage facilities already are filled to capacity. At present, there is only one piece of good news. Initial reports indicate that the LOOP itself has passed its initial damage assessment and appears ready to resume operations as soon as power is restored. That does not, however, mean that it will. Operators must first ensure that the pipeline connecting the LOOP to Port Fourchon remains intact. Send questions or comments on this article to analysis@stratfor.com.

To: energyplay who wrote (146)	8/30/2005 10:51:16 PM
From: TobagoJack	Read Replies (2) \| Respond to of 219525

United States: Hurricane Katrina and the Cold Winter Ahead August 30, 2005 14 48 GMT stratfor.com Citgo Petroleum Corp. has requested a crude oil loan of 250,000 to 500,000 barrels from the U.S. Strategic Petroleum Reserve (SPR) in order to maintain normal operations at its Lake Charles refinery in the aftermath of Hurricane Katrina. Citgo is the first U.S.-based refiner to make a request, having done so the evening of the Aug. 29 hurricane. A great deal of Gulf Coast refining and Gulf of Mexico producing assets remained offline the morning of Aug. 30, raising the probability of energy shortages in the United States this winter. Energy firms and government officials are carrying out damage assessments in the Gulf of Mexico region in the aftermath of Hurricane Katrina's rampage through the region. First-cut assessments are shy on numbers, but so far at least two major drilling platforms are adrift in the Gulf of Mexico, and Royal Dutch/Shell reports that its mammoth Mars platform -- which typically produces 147,000 barrels of oil and 157 million cubic feet of natural gas per day -- has been moderately damaged. More detailed damage assessments will trickle in throughout today, but most are not expected to be completed until late Sept. 1. That means all we know for sure is that much of the region's energy infrastructure remains in shutdown mode. In preparation for Katrina's arrival, 1.79 million barrels per day (bpd) of the country's refining capacity, 1.375 million bpd of oil production and 8.3 billion cubic feet per day of natural gas production were shut down as a precautionary measure. Such amounts represent 11 percent of total U.S. refining capacity as well as 92 percent of typical U.S. Gulf of Mexico oil production and 83 percent of the region's natural gas production. The producing assets remain offline not simply because of concerns of their continued viability, but because a complete assessment of the maze of collecting and transport pipelines that link offshore assets to the coast must be undertaken before production can be safely restarted. There is, however, a bit of good news. Despite rampant talk of gasoline shortages, there is not even a minimal danger. Nearly all U.S. refineries already have switched over to heating oil and winter fuel production. The Sept. 3-5 Labor Day weekend marks the end of the U.S. summer driving season, so gasoline demand is about to drop off. There could be some regional tightness in markets and prices will certainly rise on shortage fears -- no matter how misplaced -- but there should not be more than mild supply disruptions. The real problems will come later. As we noted, most American refineries already are gearing up for winter production runs. The issue is almost exclusively one of refined products, as U.S. commercial crude oil reserves are sitting at six-year highs and the Strategic Petroleum Reserve (SPR) is sitting pretty at 700 million barrels -- it became full for the first time ever earlier in August. If Gulf refining capacity remains offline for any more than a few days, the United States could quite easily face heating oil shortages -- particularly in the Northeast -- in the coming winter. Overall tightness in all refined products is a less acute, but equally legitimate, concern. Of course, we should not ignore the question of production assets either. Although the absence will not contribute to product shortages, significant damage certainly would affect the broader price situation. Katrina followed the same approximate path through the Gulf of Mexico's producing areas as Hurricane Ivan did in 2004. Ivan wrecked so much havoc that it took 10 months to repair all the damage, and contributed to a sustained 20 percent hike in energy prices. All told, the Bush administration approved 5.4 million barrels of crude oil loans from the SPR to keep the American refinery complex running. With the U.S. energy transport and production infrastructure damaged in all likelihood, Citgo will not be the last U.S. refiner to ask for help.