• Print this
• Letter to the Editor
• Republish
• Get e-mail alerts
• RSS

Atlanta – Gas prices spiked by 12 cents at some north Georgia gas stations overnight, with some stations already limiting drivers to a 10-gallon fill-up.

The ensuing lines at the pump – watched over in some places by sheriff’s deputies – are a first-hand glimpse of hurricane Ike’s potential impact on American wallets as it threatens the port of Houston, one of America’s key energy crossroads. The extent of Ike’s potentially formidable storm surge will play a critical role in whether the gas crimp lasts a few days – or more than a month.

If the impact is major, hurricane Ike is also likely to draw attention to one of the top themes of the current presidential campaign: offshore drilling. Hurricanes Katrina and Rita first showed the vulnerability of the Gulf Coast’s oil rigs and refineries, which supply about 24 percent of the nation’s gasoline and oil-related products. Ike is likely to drive that point home for Americans deciding between two presidential candidates who disagree on whether the United States should drill more widely for oil and natural gas.

“From an energy security standpoint, [Ike] is certainly fairly significant,” says Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University in Dallas. “We’ve got essentially one coast that is open for exploration at this point, and that’s the Gulf Coast, and it’s one of the most vulnerable from a weather standpoint.”

The best-case scenario for Ike is that its damage is limited, allowing refineries in its path to open in short order after it passes. One encouraging sign: oil rigs in the Gulf, many of which have been strengthened after hurricane Rita in 2005, are not expected to be affected as drastically as they were in 2005.

Unfortunately, a worst-case scenario is more likely, says Jeff Masters, chief meteorologist at the Weather Underground, an online weather service with offices in Ann Arbor, Mich., and San Francisco. Though winds aren’t as strong as the devastating hurricane Carla in 1961, Ike’s storm surge is expected to exceed Carla’s, setting Texas records and rising perhaps 15 to 20 feet high. Texas officials have gone so far as to warn residents that staying in low-lying areas means “certain death.”

Ike’s potential for damage equals that of Katrina in 2005, says Mr. Masters, because its total kinetic pressure – the sum of wind speed plus size of the storm – is equal, or even greater, than that of Katrina.

In fact, because of a massive expected storm surge along 200 miles of coastline, Masters expects Ike’s damages to top $30 billion. (Katrina caused $35 billion in insured losses, while hurricane Andrew in 1992 cost about $21 billion.) For example, he says, the surge is expected to overtop the coastal defenses of Port Arthur, Texas, by six feet, likely flooding the entire town. Port Arthur is home to three of the nation’s largest refineries.

In anticipation of those kinds of losses, some reports indicate that gas prices are already inching toward $5 a gallon along the Gulf Coast. That news is bringing back memories of gas-price spikes following hurricane Katrina in 2005, when some Atlanta gas stations were selling gas in excess of $8 a gallon.

“We may not be in quite as bad shape as in 2005, but we’re going to lose refining capacity and gas supplies are going to be tight,” says Masters.

The Houston area’s refineries handle 13 percent, or 2.22 million barrels a day, of the nation’s oil supply. A total of 19 percent of the nation’s refining capacity is now shut off, since refineries outside of the Houston area have also closed in anticipation of the storm. Nearly 80 percent of rigs and manned platforms in the Gulf have also been evacuated and shut down.

Refining isn’t the only issue. Extensive damage to the port of Houston would cut into the nation’s ability to import oil, as well, says Mr. Bullock.

The longer a cleanup takes, the more affected the rest of the country will be. Indeed, gas supplies could grow so tight that pipelines bringing oil and gas from the Gulf to the coasts may have to be reversed – a difficult, but doable engineering feat – in order to ensure gasoline supplies in the interior third of the US, says Bullock.

Washington reacted to supply concerns Thursday by waiving clean-air requirements for the sale of “winter fuel” in nine Southeastern states. The waiver allows gas stations to sell gas that exceeds “summer requirements” for volatility, a standard designed to control emissions during the hot Southern summer.

The hit at the pumps is further exacerbated by lingering problems in restoring electricity to swathes of the Louisiana coast, which has stalled the restart of several key refineries there following hurricane Gustav’s landfall on Sept. 1, says Charlie Drevna, president of the National Petrochemical and Refiners Association in Washington.

Rising pump prices come even as crude oil prices keep falling globally, down to nearly $100 a barrel from $147 two months ago. While crude prices dropped again overnight, wholesale market prices for gasoline in the US jumped by $1, also overnight.

At least for many oil industry people like Mr. Drevna, the possibility of a third energy-disrupting hurricane hitting the US in the span of three years should give Americans pause, especially as they note Ike’s effects at the corner pump.

“Until congressional leadership stops playing political games with the American consumer and realizes that we’ve got to [expand drilling to other geographical areas] we’re going to be sitting here every late summer and early fall praying that natural weather phenomenon don’t affect us,” says Drevna. “That is not an energy policy I would subscribe to.”

( More stories )