Katrina Cuts Oil Output By A Third

[Strelnikov_]

The wolf is at the door.

August 27, 2005
http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=OBR&Date=20050827&ID=5068066

Gulf of Mexico crude oil output was cut by more than one-third on Saturday as Hurricane Katrina appeared poised to charge through central production areas toward New Orleans.

The Gulf of Mexico is home to roughly a quarter of U.S. domestic oil and gas output, with a capacity to produce about 1.5 million barrels per day of crude and 12.3 billion cubic feet per day of gas.

Shell also said 1.345 billion cubic feet per day, or Bfd, of natural gas had been shut by Saturday. Total daily Gulf natural gas output shut on Saturday was 1.9 billion cubic feet.

. . .

The Louisiana Offshore Oil Port LLC stopped offloading tankers in the Gulf of Mexico at midday on Saturday. The LOOP, which is the only U.S. offshore oil port, takes an average 1 million barrels in foreign crude from tankers in the Gulf.

[daleo]

1. I suppose oil will hit 70 dollars on Monday. n/t

[kestrel91316]

4. And at least $75 on Tuesday.

[malaise]

16. And Dumbya's numbers will go

below 40.

[NMDemDist2]

2. Oil Storm, chilling movie and devastating in real life

http://www.fxnetworks.com/shows/originals/oilstorm/main.html

[dweller]

3. Woop, there it is.

America is the new Aunt Millie.

dp

[NYC]

5. Who is Aunt Millie?

?

[BiggJawn]

27. The woman the Enron execs were caught on tape discussing ...

They have a good laugh over the problems of "Aunt Millie" trying to keep up with her ever-increasing electric bill...

"Hah! I'll bet poor old Aunt Millie is gonna have trouble THIS month!
"Awww....Fuck her, anyway, we're gettin' RICH!"

We're getting fucked, and somebody else is getting rich.

Don't forget, the Oil industry has been bragging about record profits this year...

[NYC]

32. Thanks.

I had vaguely remembered it as "grandma" or something. I definitely remember the conversation.

[slor]

6. And the chimp is the personification of...

enron.

[Strelnikov_]

7. Hurricane Threatens Gulf Oil Production

Posted this because it provides some hard numbers on the amount of supply being threatened.

Aug. 27, 2005
http://www.marketwatch.com/news/story.asp?guid=%7BF7E49D16%2D0EF9%2D4D05%2D89DF%2D6020DC6793BE%7D&siteid=mktw&dist=

The National Hurricane Center now expects the year's fourth hurricane to make a second landfall near the major oil and gas hub at Port Fourchon, La., sometime early Monday, and then continue inland to New Orleans, which could be devastated by a direct hit by a major storm.

"Right now they are predicting the storm in the worst-case scenario for us," said Ted Falgout, director of Port Fourchon, according to Dow Jones Newswires. "It's not going to be a pretty sight if it goes as projected."

About one-sixth of the U.S. oil supply comes through the Port Fourchon facilities. The port accounts for about 13% of U.S. oil imports. About 27% of U.S. domestic production comes through the port's pipelines.

[cliss]

8. Maybe it's a good idea to

fill up the gas tank. Don't drive unnecessarily.

Here in Oregon, I believe we get our oil from Alaska so we probably won't be affected. BUT -- when gas prices go up, so does ours. In fact, California has some of the highest prices in the nation.

I know I can't store gas - I've already posted a thread about that. But maybe it wouldn't hurt to have a 5-gallon can in the garage?

[Blue_In_AK]

9. Alaska's oil is safe...

Here's HullBoss protecting it. :) (As you see, the Trans-Alaska pipeline has LOTS of security.)

[Massachusetts]

18. Pipe Line security

Excellent! ROTFL

[Toots]

30. Didn't some guy shoot holes in it with a hunting rifle a few years back?

Yep wouldn't take much to disable that thing from the looks of it. It is so long there is no way they can secure it completely as the picture shows.

[Blue_In_AK]

56. Yeah, somebody out in the Bush having too much fun

with his gun. His brother turned him in. It was just a little hole but gushed oil all over the place. Yeah, there's zero security. We didn't even see much at the pump stations.

[fishnfla]

11. Is your oil refined in Alaska?

thats the thing, refineries

[Strelnikov_]

10. Information On Facilities Being Threatened

Looks like Thunder Horse is right in the path.

From: The Oil Drum
http://theoildrum.com/

Even if this isn't as bad as some forecasters are warning at NOAA, this whole thing is illustrative of the peak oil problem. There is simply no more extra oil (except maybe the SPR?) we can call upon to put into the system...and with supply and demand balanced as it is (and with demand only growing over time), it only takes one "something" (terror, weather, malevolent world politician) to disrupt the system. This is what Goldman Sachs was saying six months ago when they introduced the idea of a $105/bbl superspike. One event that really disrupts supply means a terribly volatile market...and yes, that $105/bbl number probably equals somewhere around $4/gal or more for gas or even worse, a shortage of supply because of systemic problems.

. . .



The first graphic is a probability swath for Katrina with the recently damaged Thunder Horse platform as the red dot, and the other purple dot represents the Mad Dog development that will ramp up to 100,000 bd; the Holstein development that will also produce, at peak, around 100,000 bd of oil; and the Atlantis field that will begin production next year and will ramp up to around 200,000 bd in all. Put together these projects have the potential of around 650,000 bd, but as can be seen, they are sitting in an uncomfortable spot relative to the track of the Katrina.



The fourth graphic is from Rigzone and captures the density and location of the fields in the Green Canyon area due south of NOLA, including Mad Dog and the others mentioned above. Lots of oil in that area.

[wli]

12. here comes 10 USD/gal gas, justified or not... total Enronization n/t

[okoboji]

13. hmmmm

to my recollection, I don't remember ever in all the years of Hurricanes in the Gulf of Mexico or Florida being such a huge threat to oil rigs .... at least not having the m.s.m. report on it like they are now, 24/7. So if gas prices are rising because of this - the m.s.m. are contributing to current prices being gouged.



Here will be the next headlines for the same reason.....

- Aliens to land in the gulf of mexico - threaten oil platforms - barrel of oil $80

- Killer Wales gone rabid attack oil rigs off Florida - barrel of oil $85

- Lost City of Atlantis resurfaces - takes out oil rigs - barrels of oil $90

- Asteroid strikes the Gulf of Mexico - takes out several oil rigs - barrels of oil $105

[Systematic Chaos]

14. Killer "Wales"

What do the Welsh have to do with this?

:rofl:

[MADem]

47. Coulda been the Prince!!! Charlie, back off !!! n/t

[JohnyCanuck]

15. One possible explanation

The impact of hurricanes on off-shore oil rigs might not have received as much attention before since total world oil production was not close to capacity like it is now. In earlier years, shortfalls in production from the Gulf could be easily met just by increasing purchases as needed elsewhere. Therefore wells getting shut down in the Gulf due to a hurricane did not merit as much media attention when the consequences of the shutdown would have relatively little economic impact.

Just my 2¢.

It takes time – several years – to get new projects on stream. The world's oil producers have generally been able to meet demand. However, should demand spike – either through the needs of developing countries or a particularly harsh winter – there could be a shortage (even if we haven't reached the peak of production).

The London-based Oil Depletion Analysis Centre recently released a study that predicted tight supplies through the rest of this decade, even if all of the new major oil recovery projects scheduled to come on stream over the next six years meet their targets. The only way to avoid it, the study said, is for demand to drop sharply.

http://www.cbc.ca/news/background/oil/supply_demand.html

www.peakoil.net

[yardwork]

34. lol!

There is a history of permanent price gouging after hurricanes. Lumber prices went sky-high after Andrew and never came back down, for instance.

[alarimer]

46. I think everyone is just more sensitive this year

Last year gas was only $1.50/gal or so. I always thought gas prices were a giant scam anyway. The storm will affect output in the Gulf but how does that effect gas prices for gas that has already been refined? If prices go up Monday that is price gouging.

Did you ever notice that the price of oil for your car is not affected Or at least not as much. Maybe that stuff doesn't turn over as much.

[Roland99]

17. I thought our oil/gas inventories were fine? The bottleneck is refining.

Why would this affect the price of oil?


One word:


GREED

[teryang]

19. kick n/t

[Raiden]

20. Great! All we need is HIGHER gas prices

[MaineDem]

21. Doesn't this happen, like...every year?

Or is a hurricane in the Gulf a new phenomenon?

:eyes:

This can't be the cause of high gas prices.

[Dogmudgeon]

23. This will be a direct hit on New Orleans and a major oil drilling area

Weaker hurricanes hitting smaller concentrations of people are a lot easier to plan for. This is the hurricane that New Orleans has been fearing for a century or more. Unless there is a radical change of the upper winds NOW, New Orleans will be devastated.

I don't mean to appear to celebrate something like this, but it will probably be the most expensive storm in US history; and if FEMA and the local emergency-response people can't work a few miracles, there could be thousands of deaths.

As for gas prices -- fill up tonight. The oil commodity panic this week could be ruinous.

--p!

[durablend]

22. The OBVIOUS explanation

God hates the 40% that still support * so he's trying to punish them (if not by loss of life, by stratospheric gas prices), so ergo, that makes God an anti-American terrorist liberal! :crazy:

[BeFree]

24. Lest we forget....

The strategic reserves the US has stored in underground caverns is at a nearly all time high.

There is plenty of oil just sitting there, probably enough to fuel the country for several months; more than enough to offset the limitations about to be placed upon the singular Nah'leans region.

The reserve is there just for situations like the one about to occur.

Drumbeating for the oil companies is foolish and deceptive. They have planned for such a scenario yet will use this situation to gouge us: helping the gouging by threads such as this only helps their greed.

It has surprised me that DU'ers would spread such info without contemplating all the facts and posting only one side.

The reserves are there for a reason. The season for the reason is now. Don't let them get away with gouging us even more.

[durablend]

25. No way those reserves are going to be used

They're set aside for (strikes on) IRAN, SYRIA, VENEZUELA, NORTH KOREA, (etc).

Consumers will be left twisting in the wind (as was always the plan)

[BeFree]

28. No way?

Well, it's kinda up to us, ain't it? We either keep beating the drums for the oil companies or we demand our oil is used to stop the price gouging.

[Strelnikov_]

31. So Warning That This Could Eliminate 15% Of Supply In A Tight

just in time market is drumbeating for the oil companies?

And just who sets the price for oil? The commodities market does. Maybe we need a new economic system. You could propose a centrally planned economy to Dr. Dean, I'm sure it will go over well.

Saying a given price spike due to a shortage in a market economy is a conspiracy does not really make much sense. If you are looking for conspiracy, look to why we are still so dependant on oil, not why the price spikes when a supply shortage occurs for a price inelastic commodity.

And as for the SPR, assuming 2 M bbl/dy are lost, we will drain the reserve in less than a year making this up. Most of the facilities that may be torn up will take over a year, some years, to rebuild.

How's that for drumbeating?

[BeFree]

36. Boom, boom, boom

I see you have out your drumsticks.

No counter of my argument, just more beating on the shortage drum.

Show me a shortage. Show me one instance of you not being able to gas up your car. There is NO shortage. Saying there is, is drumbeating.

Since there is no shortage, there is no demand vs. supply mechanism to justify the increased prices. It is, as you infer, purely commodity driven profit margins which are to blame for the increased prices.

The drumbeating needs to end. Just stop it.

[Strelnikov_]

40. Counter What Argument? That Gravity Does Not Exist?

That the law of supply and demand does not exist in a free market system?

As to why demand ~ supply (flat or gradual decrease in supply), it is called demand destruction. As prices rise, demand drops, over time.
Did you know that petroleum consumption has been nearly flat in the US this year, when they were predicting a 2% increase? Did you know that, even with a lack of demand growth, supply is still barely outpacing demand?

Also, any company that depends on feedstock (refiners) bases price not only on current feedstock price, but anticipated future price to replace the feedstock.

It's called a free market system. Do I think we should have a free market system for energy infrastructure, no. As I stated before, the culprit is not the high prices as a result of a shortage. The culprit is the pusher who keeps us hooked, so we have no choice but to pay the price or face withdrawal.

But that ship sailed long ago. We have what we have, and have to go from there.

I have stated my position. If you want to continue your flat earth view of our energy infrastructure, so be it.

[BeFree]

45. You contradict yourself

One post says shortage, and now you contradict yourself here.

At least you stopped beating their drums for a second....I win! LOL

[Doremus]

44. With all due respect, you need to read up on peak oil.

This scenario possibly unfolding on the Gulf coast needs no conspiracy theories to wreak havoc.

Production is barely meeting demand now. Remove 13% of supply overnight and you have a catastrophe that will severely affect the availability and price of gasoline.

This is economics 101, not a Dick Tracy comic. You are right though, there are villains -- and they are us. We needed to demand a long time ago that our leaders actually LEAD us -- to a future less dependent on a finite resource that is now in its twilight. We didn't and they didn't, and now we're reaping the consequences of our short-sightedness.

It may be comforting to blame some nameless bad guys to justify the continuation of status quo, but it has no basis in reality, nor does it help us break the addiction that caused it all.

[BeFree]

48. With all due truth

I have been aware of peak oil for 30 years now. It's coming, but its not here yet.

Today we are dealing with oil companies who are using the coming peak oil to scare some of us into accepting the screwing they are giving us. There is no shortage TODAY. There will be a shortage down the line, but not today.

You are being used, just as I was being used, to roll over and take this screwing. Well, I see what is happening today. Now, if big oil came out and said: "Folks, Peak oil is here", then I'd be singing a different tune.

In fact, the actual supply won't be exhausted for at least twenty years. That's tomorrow. I'm dealing with today, and we have a full reserve for emergency uses... lets use it for this emergency.

Just look at the record profits big oil is reaping. That tells me more than anything we are being screwed.

[Strelnikov_]

50. "Actual Supply Won't Be Exhausted For At Least Twenty Years"

You may have been aware of peak oil for 30 years, but you sure as hell don't understand it.

[BeFree]

51. So, when is it exhausted?

Huh? When?

No drumbeating now, just the facts. When will oil be completely depleted?

[Doremus]

54. All oil doesn't have to be depleted. Only the sweet crude.

Sweet crude = cheap oil.

Heavy, sour oil = expensive oil.

Cheap oil is in depletion.

Read up on it. Really. Sorry to sound so blunt, but you have no idea what you're talking about.

[BeFree]

60. Be blunt

All I asked was: When?

I know it will all be gone someday....geez, do yall only read what you want and discard the rest?

Tell me: When will the sweet crude be depleted?

[Doremus]

62. Many respected in the industry think depletion has

already begun. The nature of peak oil is such that it can only be confirmed once it has passed.

Why not visit DU's own peak oil group? You'll find many good links and a wealth of information there to bring you up to speed.

And FWIW, oil will *not* 'all be gone one day.' The price will become far too expensive for that to happen.

[BeFree]

66. Ok, so

Oil will never be completely depleted.

So when will we see shortages? You seem to have such a broad knowledge and are willing to speak out, tell us: When will we see shortages?

[Doremus]

71. Look, I'm no expert but I at least attempt to keep myself informed.

I've read Kunstler's 'The Long Emergency" and I'm working on Simmons' 'Twilight in the Desert' currently.

I visit the Peak Oil Group regularly and read the Energy Bulletin and other links members thoughtfully provide.

You're looking for easy answers where there are none. The era we are about to enter is going to test our ability to adapt. As with hurricanes, those who prepare for it will be better able to weather it.

WE are the bogeyman, and the sooner you (and everyone else who believes in oil conspiracies) realize it, the sooner we can move beyond the coming tumult into a self-sustaining energy future.

[BeFree]

73. Good for you

Get informed, read everthing you can. But keep an open mind... not everything you read is the whole truth.

But this is the truth: Ever since peak oil became public, oil companies have reaped record profits. Don't you ever wonder if the profit takers decided to use peak oil to jack us around?

[RUMMYisFROSTED]

76. When will we see shortages?

Look around.

Sure, there's heavy gouging going on. That's what happens when an oil cartel sees it sugar baby going bye-bye. Peak Oil is here.

[DisgustedTX]

80. IN2004K?

Depletion.

[Strelnikov_]

55. Never. The Price Will Become So High Relative To Alternatives

that recovery will not be economically viable.

Peak Oil concerns the peaking of production rate, ushering in the 'Age of Scarcity', not running out.

[Strelnikov_]

52. "If Big Oil Came Out And Said: Folks, Peak Oil Is Here . .

then I'd be singing a different tune."

Big Oil, and their Quislings in government and media, have successfully suppressed general knowledge of Peak Oil, to keep us hooked beyond the point of no return, where we are now. We now have no choice, if we are to retain a free market energy infrastructure, but to pay the inflated prices over the next 20 years or so while we transition off a petroleum based economy.

Peak Oil awareness is an event that could only have happened with the internet.

Go to a right-wing board. You see even more vehement denial and ignorance regarding the issue than you see here.

[BeFree]

59. As I say below///

Your belief that there is a free market tells me all I need to know about your 'facts'.

If it were a free market, they would tell us the facts.

Your continued drumbeating for them exposes you. You really should stop right there.

Your words:

Big Oil, and their Quislings in government and media, have successfully suppressed general knowledge of Peak Oil, to keep us hooked beyond the point of no return

[Strelnikov_]

61. Exposes Me As What, Praytell? n/t

[BeFree]

67. A drumbeater for big oil.

You keep saying there is a free market. That's what they keep saying. It's a lie!

[Strelnikov_]

74. MEIN GOT! I Have Been Discovered!!

Oh, by the way, what is the pricing mechanism for raw petroleum feedstock (re: crude)?

Are you saying that all the oil traders in New York, London and elsewhere get their e-mail every morning from the ruling star chamber of big oil indicating the daily price collusion point (PCP) for oil?

[Strelnikov_]

49. Individuals Like BeFree Are Why Heinberg et.al. Are So Pessimistic

That is, even the smart among us conflate cause and effect.

The oil companies, and their Quislings in government, build an intricate scaffolding and place a big rock over our head. We have been standing underneath the whole time it was being built, ignoring the warnings, holding a wad of cash in our hand. Occasionally we become nervous, and they use a combination of ridicule alternated with promises of unlimited prosperity to keep us in place.

Eventually, they drop the rock, knock us out, and steal the cash. When we wake up, who do we blame? Why gravity, of course! Because without gravity those criminal oil companies would not have been able to steal our cash.

It's called a free market system.

It can be used for good, like building the Internet.

It can be used for bad, like keeping a society hooked on a limited resource, and once the supply of the resource begins to dry up, cash in on the inelastic demand.

[BeFree]

53. I resent your use of me that way

You can't come up with facts so you blame me for your lack of knowledge.

I am talking about today. There is no shortage today. If there was you would have shown us your 'facts'.

The market is not free, it is being held hostage by big oil, always has been, always will be as long as oil is available or until alternatives come on line.

And why haven't alternatives - or true conservation measures come on line? Because big oil is holding it hostage.

[Strelnikov_]

57. Whatever n/t

[Doremus]

63. Alternatives, for the most part, haven't happened because

they are more expensive than oil.

Are you suggesting that consumers would voluntarily pay more for energy than they had to? Or that corporations would willingly invest in projects doomed to lose money?

[BeFree]

68. I see you are still stuck

...with the idea there is a free market in energy. Banish that thought.

The subsidies given to big oil over the years should well inform you there ain't no free market. Reagan saw to that. The pukes saw to it that their friends would get the upper hand on the energy market, driving out solar and conservation.

Good lord, how far back do I have to go to educate yall?

[Doremus]

72. Feel free to cling to your conspiracy theories.

They appear to give you some comfort.

Personally, I prefer to deal with facts.

Fact: sweet crude is in depletion. Fact: there is no cheap alternative to cheap oil.

Deal with it as you will. Haranguing your fellow DU'ers may make you feel better, but it will not change the facts.

For your own sake, read.

[BeFree]

75. Go fly a kite

Yee who believe there is a free market. Sad. No wonder we are getting screwed. Basic understanding of the economy is totally lacking here.

[Doremus]

78. They know us too well, eh?

Reality can be frightening for some. Reality of this magnitude is almost incomprehensible for most. :(

[jpak]

65. One SPR site is located near New Orleans

another in SW Louisiana

http://www.platts.com/Oil/Resources/News%20Features/Abraham%20Interview/sprmap.html

If the storm disrupts the surface oil distribution infrastructure, some of that oil may not be available for a while....

[BiggJawn]

26. "When the wind blows an empty beer can off the railing..."

"...youse guys shut 'er down!"

Wanna bet that memo went out?

We're getting Enronned....

[tom_paine]

43. BiggJawn, what is happening to us, what is ABOUT to happen to us

makes the Phony Energy Crisis of 2001 seem like kids kiting candy bars from the 7-11.

There is actually some tiny grains of TRUTH behind the Mostly Phony Energy Crisis of 2005, which means they can use that to push it to $3 or $4 per gal.

Also, I am beginning to notice a pattern, as always, a brilliant evil Nazi-like patterns.

Note how the Bushevik stage their Phony Energy Crises during the first year of the Imperial Term. Their coffers fill with TRILLIONS in stolen loot, and the psychological effect of falsely spiking prices early means they can drop the prices, resulting in a positive psychological phenomena when the next Phony Election needs at least enough votes in favor of the Imperials to frost over their thefts, and STILL maintain a high margin of theft monies, even after the first-year spike drops a bit.

They are as brilliant and evil as the Nazis. Just not as violent (yet)

[BiggJawn]

79. So you think we'll see a dramatic price-cut right before the '06...

..."Selections"?

You could be right. We get raped for abother year, and then all of a sudden, the price comes down, and the ReTHUGs in the Hoiuse of Bubbas take credit for it.

And the Mukan Sheeple, in their gratitude, vote the fuckers back IN and go out and celebrate by buying all the kids "Pocket Bikes"...

Yeah.....I can see that.

But-I hope they're not depending on using Iraqi Oil to bring the Horn of Plenty on line.
The Iraqi people haven't done a DAMN thing that PNAC says they were going to do YET.:7

And we thought they had reached the bottom of depravity with the Schiavo Circus....

[goforit]

29. Gloom and doom before us.

[bdot]

33. This is getting eerily close to that movie this year.

There was that movie this summer on tv about a storm hitting this September and wiping out the oil in Louisianna.

[Massacure]

35. The oil rigs won't survive, the winds are now 175 miles per hour.

[Sgent]

37. Um... The SPR

The Strategic Petroleum Reserve is stored in the salt flats in Louisiana, and needs the pipline system going through Port Fuchon to reach the refineries in TX, LA, & MS. If Port Fuchon is Fuched.... the SPR is useless -- or nearly so.

Most of the LA & MS oil refineries are going to be shut down as well for a couple of days. Seeing how refining capacity is 95%+...

[BeFree]

39. Did you know

Shell Oil bought a refinery - a nearly new refinery, and is now scrapping the thing?

If you did you wouldn't be beating the oil companies drums, eh?

[Strelnikov_]

41. I Was Thinking About This Last Night

So I did some Googleing.

http://www.fe.doe.gov/programs/reserves/spr/spr-sites.html

The SPR appears to be distributed along the gulf coast in TX and LA. A draw of 1 M bbl/dy would probably be possible from the TX locations.

I think the weak link, as you allude to, is refining capacity. If the LA refineries and/or pipeline infrastructure is down, and the TX refineries are already at capacity, where do you ship the 1 M /dy?

[leesa]

38. Right. Oil company profits are up how much??

Are Americans truly this stupid?

[genieroze]

42. Frigging whores are full of it. Just using it as an excuse to increase

gas prices. IMHO

[DS1]

58. chaaa-fucking-ching

and I know there's some NO area DUers, but god fucking damn, how many close-calls do you need before you realize you're living in a disaster area?

[aint_no_life_nowhere]

64. Louisiana has at least 16 major oil refineries

Here's a list:

http://en.wikipedia.org/wiki/List_of_oil_refineries

This is not just about oil drilling rigs and platforms. Apparently, the refining side will also be at risk.

[Strelnikov_]

77. I Agree. Refining May Be The Weak Link. All The SPR In The World

does no good unless you can make the raw material into product.

All signs are that the Gulf oil industry has never seen anything like this storm.

As a Civil Engineer, when I hear the term 'storm of record' and 'second most powerful ever' batted about, I get nervous.

[4dsc]

69. Peak oil begins with Katrina...`

Oh I cannot wait for the so called super spike in oil prices.. I bet oil hits $100 within two weeks..

[Massachusetts]

70. Pollution

By the devastation to oil and chemical tank farms will be MONUMENTAL if track is as predicted.

Is there anyone left in the EPA that'll be around to help afterwards?