Floating oil rigs

At least 20 oil rigs and platforms are missing in the Gulf of Mexico and a ruptured gas pipeline is on fire after Hurricane Katrina tore through the region, a US Coast Guard official said Wednesday.

According to the latest tally Wednesday from the federal Minerals Management Service, a total of 561 platforms and rigs have been evacuated in the Gulf of Mexico, which accounts for a quarter of US oil production. Over 91 percent of normal daily crude oil production in the Gulf - 1.5 million barrels - is now shut down, and more than 83 percent of natural gas production, the MMS said.

Comments:

What's spooky about Katrina is just how close it came to matching the scenario set out in the FX TV-Movie "Oil Storm." The premise of that movie was a category-4 hurricane hitting New Orleans on Labor Day weekend - they missed by one week.

In "Oil Storm," the loss of the oil rigs was bad enough, but the LOOP pipeline (from the Louisiana Offshore Oil Port) was damaged and out of service for months. In real life, it sounds like LOOP is okay (both port and pipeline), but due to lack of electricity it still will be out of service for months.

*SPOILERS FOLLOW*

In the movie, the situation was compounded by well-meaning but poorly-considered attempts by the US Government to quick-fix the problem by applying pressure. Pressure on Saudi Arabia led to civil uprisings there, and pressure on Houston port authorities to handle the LOOP traffic in addition to their own resulted in a shipping disaster that blocked the Houston channel.

Troops were sent to Saudi Arabia to help protect the oil supply from there, and funding for the troops was provided by cutting back on farm subsidies, leaving farmers unable to pay the increased fuel prices necessary to grow and ship food. Truckers began parking their rigs because they couldn't afford to run them any longer, and perishable food simply... perished.

The situation became much worse as wintertime rolled around, because many of the homes in the Northeastern US are heated by #2 fuel oil. Caught between paying for high-priced medicine and high-priced heating oil, many senior citizens (pensioners, whatever you call them where you live) quit taking their medications. Many still couldn't afford enough oil to keep their homes warm.

Anyway...

The real-life situation is perhaps worse than the original premise of "Oil Storm." In the movie, it was just a problem getting crude, and that was eventually resolved by working a deal with Russia. But in real life, it's not just crude, it's finished product. We've got 8 refineries completely offline for weeks or months, and 3 running at significantly reduced capacity. The two big pipelines carrying finished product from those refineries to the Southern US and the East Coast are shut down due to lack of power... again, possibly for weeks or months.

President Bush is making a big show of allowing crude from the Strategic Petroleum Reserve to be used to cover half of the crude shortfall (interestingly, this follows the movie), but even if we can get at it - the SPR is located in the areas hit by Katrina - it's not crude that's in shortest supply, but refining capacity.

We in the US are now living in interesting times. I can only hope that the screw-ups shown in the movie don't come to pass, and that they're not replaced by even worse screw-ups.

Posted by Doug on September 02, 2005 at 01:41 AM SGT #