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Sept. 3, 2005, 6:58PM
Southern exposure reflects a weakness
Hurricane showed that concentrating U.S. energy in one region is dangerous
By DAVID IVANOVICH
Copyright 2005 Houston Chronicle Washington Bureau
HURRICANE KATRINA
WASHINGTON — Hurricane Katrina has exposed the vulnerable flank of the nation's energy sector.
The energy crisis that swept in with the storm was an inevitable consequence, industry experts say, of concentrating the nation's oil and natural gas activity in a single, hurricane-prone region.
And yet the nation's dependence on the Gulf Coast is only likely to grow as new deep-water oil and gas fields go into production, and more terminals to import liquefied natural gas are built.
"Looking at a map — that ought to give people pause," said Red Cavaney, president of the American Petroleum Institute.
Katrina has sparked the worst energy crunch this nation has seen since the late 1970s.
Gasoline price have shot well past $3 a gallon in many cities. Pumps at some stations are running dry, and homeowners are bracing for some painful winter heating bills.
Even President Bush is telling Americans: "Don't buy gas if you don't need it."
Of course, the creaky, no-room-for-error nature of the nation's energy sector has been demonstrated repeatedly in recent years — blackouts rolled across California, while a swath of the continent from New York to Detroit fell dark when the grid failed.
And Katrina was not the first assault in the Gulf. Just last year, Hurricane Ivan ripped through some of the region's most prolific oil- and gas-producing areas, dramatically driving up prices and disrupting operations for months.
Last week an AP-Ipsos poll found that gasoline prices have emerged as the No. 1 domestic issue on voters' minds.
Now the question is whether Americans' new concern about pump prices will change their indifference to the concentration of the energy industry along the Gulf Coast.
Much will depend on whether the fuel supply disruptions last. Nothing changes attitudes about energy quite like gas lines.
"I think we're at the tipping point," said Daniel Yergin, chairman of Cambridge Energy Research Associates and author of the Pulitzer Prize-winning The Prize: The Epic Quest for Oil, Money & Power .
Katrina, Yergin said, may well give impetus to the effort to disperse the nation's oil and gas facilities. And it may even spark a rethinking of our concept of energy security.
After all: "We've had a major city knocked out."
The cluster of oil production facilities, refineries and pipeline systems along the Gulf Coast is, in part, an accident of history and geology.
Other regions have decided energy production is not their concern. Any suggestion that the federal waters along the East, West and Florida coasts be open to oil and gas exploration has been met with fierce resistance.
Construction of refineries and oil and natural gas import terminals has been funneled to the Gulf Coast for the same reasons.
All of these have added to the nation's Southern exposure.
More than a third of U.S. oil production comes from the federal and state waters of the Gulf of Mexico. During just the first six days of the storm evacuation, the nation lost more than 6 million barrels worth of oil production, according to Houston-based IHS Energy.
Nearly half of America's refining capacity is in an arc stretching from Alabama to Texas. Indeed, Katrina knocked out a number of refineries.
And more than 60 percent of the nation's imported oil comes through Houston and other Gulf Coast ports.
Over the next few years, the nation's reliance on the Gulf Coast will likely increase substantially.
By 2010 — perhaps a few years longer, depending on the extent of the damage from Katrina — the Gulf will account for about 45 percent of total U.S. oil production, Yergin said.
Refiners, which for nearly three decades have been frustrated in their efforts to build a single new facility, have added to their production capacity by expanding existing facilities. That trend is sure to continue.
Bush earlier this year proposed using old military bases as sites for new oil refineries, again usually along the Gulf Coast. But that initiative has gone nowhere
Southern exposure reflects a weakness
Hurricane showed that concentrating U.S. energy in one region is dangerous
By DAVID IVANOVICH
Copyright 2005 Houston Chronicle Washington Bureau
HURRICANE KATRINA
WASHINGTON — Hurricane Katrina has exposed the vulnerable flank of the nation's energy sector.
The energy crisis that swept in with the storm was an inevitable consequence, industry experts say, of concentrating the nation's oil and natural gas activity in a single, hurricane-prone region.
And yet the nation's dependence on the Gulf Coast is only likely to grow as new deep-water oil and gas fields go into production, and more terminals to import liquefied natural gas are built.
"Looking at a map — that ought to give people pause," said Red Cavaney, president of the American Petroleum Institute.
Katrina has sparked the worst energy crunch this nation has seen since the late 1970s.
Gasoline price have shot well past $3 a gallon in many cities. Pumps at some stations are running dry, and homeowners are bracing for some painful winter heating bills.
Even President Bush is telling Americans: "Don't buy gas if you don't need it."
Of course, the creaky, no-room-for-error nature of the nation's energy sector has been demonstrated repeatedly in recent years — blackouts rolled across California, while a swath of the continent from New York to Detroit fell dark when the grid failed.
And Katrina was not the first assault in the Gulf. Just last year, Hurricane Ivan ripped through some of the region's most prolific oil- and gas-producing areas, dramatically driving up prices and disrupting operations for months.
Last week an AP-Ipsos poll found that gasoline prices have emerged as the No. 1 domestic issue on voters' minds.
Now the question is whether Americans' new concern about pump prices will change their indifference to the concentration of the energy industry along the Gulf Coast.
Much will depend on whether the fuel supply disruptions last. Nothing changes attitudes about energy quite like gas lines.
"I think we're at the tipping point," said Daniel Yergin, chairman of Cambridge Energy Research Associates and author of the Pulitzer Prize-winning The Prize: The Epic Quest for Oil, Money & Power .
Katrina, Yergin said, may well give impetus to the effort to disperse the nation's oil and gas facilities. And it may even spark a rethinking of our concept of energy security.
After all: "We've had a major city knocked out."
The cluster of oil production facilities, refineries and pipeline systems along the Gulf Coast is, in part, an accident of history and geology.
Other regions have decided energy production is not their concern. Any suggestion that the federal waters along the East, West and Florida coasts be open to oil and gas exploration has been met with fierce resistance.
Construction of refineries and oil and natural gas import terminals has been funneled to the Gulf Coast for the same reasons.
All of these have added to the nation's Southern exposure.
More than a third of U.S. oil production comes from the federal and state waters of the Gulf of Mexico. During just the first six days of the storm evacuation, the nation lost more than 6 million barrels worth of oil production, according to Houston-based IHS Energy.
Nearly half of America's refining capacity is in an arc stretching from Alabama to Texas. Indeed, Katrina knocked out a number of refineries.
And more than 60 percent of the nation's imported oil comes through Houston and other Gulf Coast ports.
Over the next few years, the nation's reliance on the Gulf Coast will likely increase substantially.
By 2010 — perhaps a few years longer, depending on the extent of the damage from Katrina — the Gulf will account for about 45 percent of total U.S. oil production, Yergin said.
Refiners, which for nearly three decades have been frustrated in their efforts to build a single new facility, have added to their production capacity by expanding existing facilities. That trend is sure to continue.
Bush earlier this year proposed using old military bases as sites for new oil refineries, again usually along the Gulf Coast. But that initiative has gone nowhere
