This is an excerpt from EERE Network News, a weekly electronic newsletter.

September 28, 2005

Energy Impacts from Hurricane Rita Remain Uncertain

While petrochemical companies are breathing a sigh of relief that the on-shore impacts of Hurricane Rita weren't as bad as they had feared, the full impact of the hurricane on U.S. energy production remains unclear. In terms of refineries, DOE's Office of Electricity Delivery and Energy Reliability (OE) reports that 21 Texas refineries were shut down during the storm, and although most are now coming back online, at least one—a Port Arthur refinery owned by Valero Corporation—is reporting significant damage and does not expect to be back on line for two weeks to a month. Valero does not expect power to be restored for about a month in Port Arthur, the location of two other refineries. See the Valero press release.

Another concern is oil production in the Gulf of Mexico, which remained 100 percent shut down on Tuesday. Of particular concern is the Green Canyon area, about 165 miles south-southwest of New Orleans, where many large offshore oil platforms and drilling rigs are located. Hurricane Rita was still a strong category 4 hurricane when it passed by Green Canyon. Although the status of the area is still uncertain, Chevron Corporation announced Monday that one of its platforms was severed from its moorings and suffered severe damage in the storm. Likewise, Diamond Offshore Drilling, Inc. reports that two of its Green Canyon drilling rigs broke free of their moorings and were blown aground roughly 100 miles from their original locations. But on the plus side, BP, owner of two of the largest oil platforms in the area, says its oil facilities incurred no major damage. See the latest OE hurricane situation report and the press releases from Chevron, Diamond, and BP.

President Bush commented on the energy situation on Monday, noting that the impacts are still being assessed, but calling on Americans to conserve fuel. The President is prepared to again tap the Strategic Petroleum Reserve to help alleviate any supply impacts. The effects of the disruption are also starting to be felt at the pump: According to the American Automobile Association (AAA), average gasoline prices have gone up the past couple days, reaching $2.81 on Tuesday. See the White House press release and fact sheet and the AAA's "Fuel Gauge Report."