Royal Dutch Shell Group .com

The New York Times: Petrochemical Center Largely Spared, Initial Survey Indicates: "Royal Dutch Shell and Valero Energy said their Houston-area plants would be restarted as workers returned and power was fully restored.": Sunday 25 September 2005

Published: September 25, 2005

TEXAS CITY, Tex., Sept. 24 -Hurricane Rita caused some damage to oil refineries near the Texas and Louisiana border and raised the prospect of gasoline shortages and higher prices during the arduous process of restarting refineries all along the Gulf Coast. But the hurricane did not cause the widespread destruction of the energy infrastructure that some had feared.

Skip to next paragraph

Go to Complete Coverage


Rita Hits the Gulf Coast
Hurricane Rita slammed into Texas and Louisiana Saturday.


Hurricane Rita
The storm brought winds of over 100 miles per hour to Lake Charles, La., and Port Arthur, Tex.
New Orleans Update

Reports From the Region

HOW TO HELP A partial list of relief organizations and other information on the Web.

YOUR STORY Share your experiences via e-mail or in this forum.

National Hurricane Center
Live Video: KHOU-TV

On the edge of this workaday city of refineries and modest ranch houses this afternoon, a flare burned silently from a tower at the large B.P. refinery, evidence that it was largely unscathed.

Up and down the energy corridor between Galveston and Houston, energy industry officials said refining locations had managed to avoid extensive damage from the hurricane, which made landfall to the east, near the border with Louisiana. Refineries sat waiting for workers to return to assess their condition. In Texas City, there were no signs of wind damage or flooding at any refining installations.

Egrets gathered in the marshes in the shadow of refineries and petrochemical complexes, owned by energy giants like Valero, B.P., Marathon-Ashland and Praxair. A toppled sign from a Phillips 66 gas station was the only indication that a hurricane's edge had passed through.

The situation was less sanguine along the Texas-Louisiana border, around Port Arthur, Tex., and Lake Charles, La., where officials expect refineries and industrial plants to be out of service longer because of heavy wind damage, power failures and scattered flooding. Depending on how much of the nation's already stretched refining capacity is affected and for how long, that could cause shortages of gasoline and other fuels and push up retail prices again.

"It looks like we may have dodged some of the bullet in terms of the impact," said John Felmy, chief economist for the American Petroleum Institute. "It certainly is better than if it had hit some of the bigger refining centers."

Chuck Dunlap, who rode out the storm with 50 others at Pasadena Refining Systems just outside Houston, said at first glance that it appeared that his plant and other facilities in the area appeared to have taken limited damage. But even still, it will take a few days for the plant, which normally processes about 100,000 barrels of crude oil a day, to return to full speed.

"We are actually walking through the plant and doing a more detailed inspection," said Mr. Dunlap, the refinery's president. "We won't be at full operations till mid-week."

As the hurricane approached Texas on Friday, Galveston and Houston seemed directly in its path, and had the storm plowed into those cities, laden with petroleum tank farms, refineries and natural gas processing plants, insurance experts feared losses could have run to $30 billion. But initial estimates put insured damage at $5 billion or less.

With hurricane winds extending 85 miles from the center of the storm, Galveston and Houston got heavy rain and strong gusts of more than 75 miles an hour, suffering scattered damage. Royal Dutch Shell and Valero Energy said their Houston-area plants would be restarted as workers returned and power was fully restored.

Companies shut down 16 refineries that make up about 23 percent of the nation's capacity in the days before Hurricane Rita struck. Less than half of the facilities that closed were in or near Port Arthur, and Lake Charles, where the storm took its greatest toll.

Valero and Shell both said the wind knocked down cooling towers and power lines at their Port Arthur refineries, but they reported minimal damage from flooding. Valero said it would take two weeks to a month to complete repairs and restart the plant.

Hurricane damage experts said the destruction might have been limited because as the storm churned inland, the refineries were on its west side, where wind speeds were lower, said Dr. Jayanta Guin, vice president for research at AIR Worldwide, a Boston firm that tracks hurricanes and the damage they inflict, mainly for insurance companies.

Industry officials cautioned that the lack of obvious damage should not be read as a sign that things will quickly return to normal. Offshore oil platforms still need to be inspected, and restarting refineries, especially the kind of hulking operations that are common in the region, can take several days, even weeks.

During that period, gasoline supplies may start to run short in much of the eastern half of the country, which gets most of its fuel from the Gulf Coast via pipelines. The largest of these, owned by Colonial Pipeline, was operating at about half its usual volume Saturday because it had lost power at pumping stations.

Retail gasoline prices spiked to more than $3 a gallon after Hurricane Katrina. Regular unleaded gas sold for an average of $2.748 a gallon on Saturday, down from $2.755 on Friday, according to the AAA automobile club.

 Click here to return to HOME PAGE

Click here to return to Royal Dutch Shell Group .com