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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: jim_p who wrote (547)	8/31/2005 12:42:59 PM
From: James C. Mc Gowan	Respond to of 50619

RE: Port Fourchon-pictures of damage/flooding/barges on top of highway are about 1/3 down the page of this link: urbansurvival.com Here's a blow by blow on the refineries from the BOOM BOOM board, I have read summaries from MMS that are similar, and from other sources, it's obvious refiners and power plants have a long way to go. "The refining situation is not a pretty picture. On the east side of New Orleans there are three refineries (Murphy, Chalmette and Conoco Philips) with 559 kb/d capacity. To the west of the city there are another 3 (Marathon, Motiva, Valero) with 656.5 kb/d of capacity. The infrastructure in the area seems to have collapsed, and thanks to the government's failure to fix the broken levee the situation seems to be getting worse. You can't run a refinery without employees, not to mention power, communications and transportation for crude and products etc. I think you probably have to fix New Orleans before you can think about restarting the refineries. I know that Valero said that they would be back in 1-2 weeks, but given the situation in the Big Easy I don't really believe that. It seems a good guess that they will be down for at least a month, if not much longer. That's a loss of 1.22mb/d for the eastern US. Halfway to Baton Rouge, at Convent there is another plant with 235kb/d of capacity, and earlier on this thread there was a report stating that they had power but no immediate restart plan. In the Baton Rouge area there is Exxon Mobil with 493.5kb/d and not too far away Valero Krotz Springs with 80 kb/d. Both of those seem to be having trouble with crude supplies, probably due to power outages messing up the pipeline network. I would think you could supply those from the SPR, if Bush will release the oil. We should watch very closely to see if the effects of the pipeline problems in Louisiana spread further north. Apparently they have reached as far as Memphis, but will Mid-west refineries be forced to cut back? Finally, there is Chevron in Pascagoula with 325kb/d. That is about 30mi east of Biloxi, and after having seen the TV pictures from there, I'd guess Chevron will be out of operation for a while. Adding up the New Orleans area and Pascagoula that makes 1.55 mb/d which could be out of operation for a month or longer, and another million or so b/d which is operating at reduced rates or shut down. That makes for a 5-10% reduction in the nation's supply of fuels. I'd estimate between 650kb/d to 1mb/d of lost gasoline production. I think that the eastern US is looking at fuel shortages or a massive price spike within 1-2 weeks, maybe sooner if panic buying sets in. A lot will depend on how much slack there is in the system. The government's estimate for minimum operational inventory of 185 mb is probably conservative. We'll also probably get some help from Europe and Canada, if there are enough ships in position to move any spare stocks that they might have." There is still much more to be known about the extent of damage to infrastructure to estimate an instant return of production and delivery here. Give it a few more days of recon. One or two days? Maybe not, but who's counting. Enough of this, let's just wait and see how it shakes out. Of course, one could look at the futures markets to see the 'expectations' for timely return of production. IMHO, the Natural Gas Crisis is coming to you via the TV Talking Heads in about a month, you have to give them time to get up to speed, LOL. Oil pricing will be muddied by the prospect of mogas shipments from offshore, hell, even Chavez has offered us some emergency petrol from his refineries, how ironic. And the politics of SPR releases now hover over the futures markets as well. So I would focus on NG producers going into the Winter months, there is no Strategic Reserve for NG. And LNG isn't going to get it, either. BTW, we are being OUTBID for available LNG by the Asians and Europeans now, and 56% of our LNG capacity is being used, not 100%. The Canadians have been shipping heavily, so much that their Winter inventories are behind schedule, they will have to cut back the NG flows to US. Refineries will be behind schedule for production of HO, Coal deliveries continue to lag, repairs on RR infrastructure are still underway after many months, etc. NG, NG, NG. Got UPL, Got CHK, Got CNQ, and CanRoys? James

To: jim_p who wrote (547)	9/20/2005 6:14:56 AM
From: James C. Mc Gowan	Read Replies (1) \| Respond to of 50619

Any more predictions from the board on NG pricing going forward? We have another major storm heading now, according to some trackers, for the Galveston area. What do you say we multiply those predictions of NG futures pricing of $6.00 we saw a few months ago, by a factor of 3X? When you go into detailed analysis of the factors that might impact energy prices, and you leave out the remaining one-half of the hurricane season, when Dr. Grey of Colorado State has been saying loud and clear for years, that the frequency, duration and power of GOM storms were increasing significantly, how do you come up with a model that has credibility? I surely hope some NG producers didn't over-hedge thier production going into this storm season, or the next. They will be left holding the bag. Meanwhile unhedged, non-GOM NG producers are cleaning up. Still a peak for NG coming? For the sake of US consumers, I actually hope it's true, but as an investor, I'm betting it's not here yet. James