Louisiana has roughly 2 ½ illion barrels a day of refining capacity, either adjacent to the Mississippi River or along potential spillways to divert floodwaters from urban areas.
Tim Evans, an energy analyst with Citigroup, says while there’s little risk of long-term disruptions to operations, oil traders are taking no chances.
“Nobody in the marketplace is going to assert that all is well. Not until we see just how high the crest is going to be in Louisiana, not until that crest arrives, and we have some sense that at least some of these refineries have been able to sustain normal operations.”
Barbara Shook of the Energy Intelligence Group says that the U.S. has ample supply to weather a temporary shutdown of Louisiana’s refineries.
“Refineries nationally have been running about 90% of capacity, so we have room for increased throughput at a good many refineries throughout the country.”