Industry takes punch but still standing

Don Stowers
Editor-OGFJ

With a storm as devastating as Hurricane Katrina, it seems incredible to say that we dodged the bullet on this one - but we did. Katrina’s last-minute swerve to the northeast prevented New Orleans from getting the full force of its powerful winds and storm surge, which instead struck the Mississippi delta southeast of the city, then moved over the shallow waters of Breton Sound, past a few small barrier islands to smack coastal Mississippi.

Katrina was a Category 4 hurricane that wreaked havoc over a large area of the northern Gulf Coast, but the strongest winds are always along the eastern wall of the hurricane’s eye, which measured about 28 miles across as it came ashore. Unfortunately for the people in Mississippi, this storm came ashore near where Hurricane Camille devastated the coast in 1969.

With a few exceptions, the offshore industry did not fare as poorly as it could have. Having previously learned not to underestimate the power or the unpredictability of hurricanes, oil and gas producers shut in more than 95 percent of production in the northern Gulf ahead of the storm. Drilling rigs were moored and offshore installations secured to the maximum degree possible, and personnel were evacuated.

In the aftermath of the storm, most offshore operators reported no major damage, although a fair number of rigs had broken loose and were adrift - not surprising when you consider they were hit with a 30-foot storm surge and wave heights as high as 60 feet. It takes a lot to withstand this kind of pounding for hours on end. A comparative few did not and were sunk. Most sustained only minor damage.

If you look at a map of offshore installations in the northern Gulf of Mexico, it becomes apparent that Katrina did not strike the greatest concentration of offshore platforms and rigs. Arguably, the situation would have been worse for the offshore industry had the eye of the storm come ashore just 60 or 70 miles to the west at Terrebonne Bay, south of Houma, and then proceeded north-northeast, as these storms are prone to do, directly over the city of New Orleans.

Also, we should remember that although Katrina had been a Category 5 storm, it was downgraded to Category 4 shortly before making landfall. A stronger storm than Katrina could have inflicted much more wind damage and generated an even greater tidal surge.

The nation’s supply of gasoline and other fuels were tight before Katrina with summer production levels at US refineries running near 98 percent. With production halted or reduced at 14 Gulf Coast refineries impacted by the storm, the situation is likely to worsen. Releasing oil from the strategic reserves will do nothing to increase refinery capacity. President Bush offered sage advice when he said - don’t drive if you don’t need to and don’t buy gas if you don’t have to.

Meanwhile, with two more months remaining in hurricane season, let’s hope the worst has already happened - at least for this year. OGFJ