Hurricanes Could Hamper Oil Production - KPLC 7 News, Lake Charles, Louisiana

Hurricanes Could Hamper Oil Production

June 7, 2004
Reported by KPLC Staff

In a time when simply filling up your tank can empty your wallet, it's upsetting to hear that yet another factor may hike up the price at the pump. But that's exactly what could happen over the next few months.

Forecasters predict a busy hurricane season, raising the risk that violent storms could put a new crimp in the nation's already-stressed oil and natural gas production.

Two recent hurricanes, Claudette and Lili, didn't cause many problems for energy companies or consumers because rigs kept operating and prices and supplies were stable.

But according to Larry Deroussel with the Lake Area Industry Alliance, all industries prepare for a potential shutdown of drilling operations in the Gulf: "The procedure that they take depends on where the hurricane is, how fast it's moving. How high are the winds? Where is it going to hit? Is it going to be a direct hit? Is it going to be somewhere else along the gulf coast? The action that they take is always the action that is appropriate for the conditions and the predicted conditions that are taking place."

Evacuations from platforms and drilling rigs typically begin once a threatening storm enters the Gulf, perhaps 48 to 72 hours away. Such decisions aren't taken lightly.

Deroussel: "The biggest thing there, is loss of production, because when you're not running the plant, you're not making a product, yet you're still incurring a lot of the expenses that go along with operating a plant."

Deroussel says that any stop in production would trickle down to the consumer in the form of higher gas and natural gas prices: "If there was some major interruption of refinery capacity in the United States, I think it would impact gas prices because the refineries right now are pretty much operating at capacity. So any affect on the output of refineries for any period of time would have some affect on gas prices because it's the old supply and demand thing."

Along with government forecasters, industries rely on a variety of sources to help them make critical, multi-million dollar decisions. This very well could be a problem for the plants this year. Hurricane Forecaster William Gray predicts 14 named storms this season, with eight developing into full-blown hurricanes.

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