As the people of Louisiana struggle to regain a semblance of normality in the wake of Katrina, Gulf ports are closed and all waterways are being resurveyed

The total devastation left behind in the wake of Hurricane Katrina is terrible to behold – from the social, from the environmental, and from the commercial viewpoint. Our thoughts and prayers are for the people of the U.S. Gulf Coast, in particular New Orleans, as they struggle to find some semblance of normality – even to survive; for the beautiful and delicate environment of Louisiana’s coastline; for the businesses in the area, large and small, whose activities have ground to a halt. 

There appear to have been thousands of fatalities; there has been the momentous decision effectively to abandon New Orleans which is 80% flooded; all Gulf Coast ports have been closed; buildings have been demolished and damaged leaving the worst-affected areas looking as though they have been bombed; ninety foot Gulf shrimp boats are left scattered across the marshes and adjoining woodland; five huge offshore rigs are missing, two are adrift, two are listing, two have grounded (at Dauphin Island, Alabama and at the Mississippi’s SW Pass).  

The U.S. Coast Guard (USCG) is doing a superb job working round the clock to help individuals and families, as well as ports and terminals, having mobilised three maritime safety and security teams, three oil and hazardous materials teams, five aids to navigation teams. Their equipment transferred to this devastated region includes 15 cutters, 63 smaller boats, 37 planes and helicopters. Four thousand USCG personnel have been deployed in the area for response and recovery. Tragically four USCG personnel are among those missing. 

The Port of New Orleans is doing all that it possibly can to survey its facilities and reopen as many as it can as soon as it can. President and CEO of the Port of New Orleans, Gary LaGrange, summarises the situation in New Orleans when he says, “The outcome is not good and it has been aggravated by unexpected flooding conditions following the storm. Yesterday I thought the damage could have been worse, but today I’m not so sure. It won’t be overnight, but eventually we will bounce back bigger and better than ever. Our first priority is to provide peace of mind to the citizens of New Orleans and our employees who have lost so much.”  

“While it is still too early to know the full effects of Hurricane Katrina on production and refinery facilities in and along the Gulf of Mexico, it is becoming increasingly evident that the impact of this devastating storm on oil and natural gas operations will be significant and protracted.” Thus begins a press release from the American Petroleum Institute. Also the effect of the storm on the imminent grain shipping season cannot be forecasted. 

1.4m barrels a day of Gulf of Mexico crude oil production (95%) and 8.8bn cu ft a day of natural gas output (88%) have been shut in. Nearly 10% of total U.S. refining capacity could remain out of action or under-performing for some time – even for what has been described as ‘a prolonged period’. Eight refineries were reported closed down earlier this week. These include

-         Chevron in Pascagoula, 325,000-bpd;

-         Valero Energy in NorcoLouisiana, 260,000-bpd;

-         Marathon Oil in Garyville Louisiana, 245,000-bpd;

-         ConocoPhillips Alliance refinery in Belle Chasse Louisiana, 255,000 bpd;

-         ExxonMobil in ChalmetteLouisiana, 183,000 bpd;

-         Murphy Oil in Meraux, Louisiana 125,000 bpd.

Exxon’s 394,000 bpd refinery in Baton Rouge is running at reduced capacity.  

Some refiners and terminal operators are still unable to complete the assessment of their Louisiana facilities – including Stolthaven's Braithwaite terminal which was right in the path of the storm. Petroleum product prices look as though they will firm further as buyers look to foreign sources of supply for products to be shipped in. 

It is almost impossible even to start guessing as to when ships will be able to resume trading to the worst-affected parts of the GulfCoast. Navigation aids are missing or have shifted. Port surveys are in progress everywhere - starting with the Mississippi’s massive SouthWestPass – as draughts are rechecked, sunken vessels located and aids to navigation restored. As one observer put it, “Before you can resurvey SW Pass, you first have to find it and make sure it is where you think it is”. 

The Louisiana Offshore Oil Port (LOOP), which handles more than 10% of U.S. oil imports, stopped discharging tankers on Saturday 27 August. As we go to press, unofficial sources indicate that discharge operations may resume before the end of the week – but members should check locally. Commercial transits into the Mississippi Rivermay restart this weekend with one-way traffic in daylight hours, but the USCG and the river pilots will have to balance relief needs with commercial needs, and working through the backlog of vessels will be slow. 

Click here for a fuller report from Inchcape Shipping Services on the situation as of 31 August. 

Should any reader wish to make a cash donation to provide assistance in the aftermath of Hurricane Katrina, click hereto link to the Federal Emergency Management Agency (FEMA) website which contains a list of contact addresses.

 

Contact: Bill Box