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Rita Threatens Nearly 30 Percent Of U.S. Refining Capacity

September 23, 2005
Energy analysts say the impact of Hurricane Rita on U.S. gasoline prices will depend in large part on how oil refineries along the Texas and Louisiana coasts weather the storm. Within the potential path of the hurricane – an area stretching from Corpus Christi, Texas to Lake Charles, Louisiana, there are 21 refineries, making up 27.5 percent of U.S. refining capacity, according to the latest update from the American Petroleum Institute.

Hurricane Rita • Texas Warns Businesses To Stop Price Gouging • Rita Threatens Nearly 30 Percent Of U.S. Refining Capacity • Tips for Those in Hurricane Rita's Path

“The shut-down or anticipated shut-down of any significant part of that capacity could affect U.S. gasoline markets,” the report stated.

More than five percent of national refining capacity remains shut down due to the damage caused by Hurricane Katrina.

The industry report is troubling in another regard: once refineries are shut down, and nearly all in the region have been, it takes several days to restart them. Once up and running, they must have adequate access to crude oil supplies and pipelines.

API says the 21 refineries in Rita’s path get most of their crude oil from offshore oil drilling platforms in the Gulf of Mexico. Most of those operations have also been shut down in anticipation of the storm, and depending on damage from the category-four winds, could be idle for weeks or months. All of which paints a possibly bleak outlook for U.S. gasoline supplies – and prices – in the coming weeks.

According to the API report, the Galena Park Terminal on the Houston Ship Channel, the origination point for Longhorn Partners Pipeline, was shut down at noon Wednesday. The pipeline will remain down until the terminal is able to reopen.

The explorer pipeline was also down, as of Wednesday, but still receiving product into its Port Arthur facility. Most of the refineries that supply the line are down or in the process of shutting down.

Colonial Pipeline said it was continuing to operate and deliver gasoline and other refined petroleum products from Gulf Coast refineries that were operating and not affected by Hurricane Rita.

“The impact of evacuations and shutdowns associated with Hurricane Rita are already being felt,” the API report said.

“As of Thursday, 605 platforms and 87 rigs have been evacuated. This represents 1,379,000 barrels a day of crude oil.”

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