News

Friday September 23rd, 2005

Exodus from Hurricane Rita prompts gasoline shortage…Refineries in path of hurricane shut down…New Orleans-based subsidiary of Entergy files for bankruptcy protection in aftermath of Hurricane Katrina… The threat of Hurricane Rita has sparked a gasoline shortage in Texas. Many gasoline stations along major highways have been out of fuel since yesterday. Pumps are also covered […]

Exodus from Hurricane Rita prompts gasoline shortage…Refineries in path of hurricane shut down…New Orleans-based subsidiary of Entergy files for bankruptcy protection in aftermath of Hurricane Katrina…

The threat of Hurricane Rita has sparked a gasoline shortage in Texas. Many gasoline stations along major highways have been out of fuel since yesterday. Pumps are also covered at stations in Houston, Beaumont and throughout the region where much of the nation’s gasoline and aviation fuel supply is produced. The fuel shortage is keeping many motorists who have not fled the area off the roads. Some say they’re saving what they’ve got because power outages could keep stations out of service once the storm passes.

Little by little, the refineries and oil and natural gas rigs along the Gulf Coast blinked off as Hurricane Rita heads for the heart of the nation’s energy infrastructure. And that’s amplifying worries about another big spike in gasoline prices and a shortfall in supplies. About five percent of the nation’s oil-refining capacity is still out from Hurricane Katrina’s sweep through Louisiana and Mississippi. Bob Slaughter of the National Petroleum and Refining Association says Rita potentially is an even bigger threat than Katrina because there’s more refining capacity in the Houston area. Analyst Craig Smith thinks pump prices could hit $3.50 to $4 a gallon, but quickly come back down. Smith says, depending on the damage, Texas refineries should be back to normal within a month.


Some 1,700 Centerpoint field personnel will help restore damage caused by Hurricane Rita. Tree trimmers are clearing fallen branches so that linemen can make repairs. Centerpoint’s Emily Thompson says customers are asked not to call to report outages.

Emily Thompson audio 1

The exception would be to report downed power lines. Thompson says power will be restored first at hospitals, water treatment plants and public service facilities.

Emily Thompson audio 2

Thompson says customers may be without electricity for up to two weeks following the hurricane.


Cell phone service was intermittent as Houstonians evacuated for Hurricane Rita, and customers can also expect similar call volumes on their return. Patrick Kimball with Verizon Wireless says they prepared for the hurricane.

Patrick Kimball audio

Cell phone companies are suggesting that users send text messages for that “I’m OK” message.

Gasoline prices fell across Texas this week but headed back up over the past two days in Houston and other areas bracing for Hurricane Rita. AAA Texas says its weekly statewide survey shows spot shortages seen as far north as Dallas today–with service stations posting signs that they were out of gas. The statewide average price for a gallon of self-serve regular fell sharply for the second straight week–down almost 15 cents to about $2.66 per gallon. That’s after a 12-cent per gallon drop last week. However, the auto club says prices ticked upward over the past two days in Houston, Beaumont and Galveston, where people were being evacuated in advance of Hurricane Rita coming ashore. The highest prices were recorded in the Galveston-Texas City area at $2.79 per gallon, $2.73 in Houston and almost $2.71 in Dallas. The lowest average price was $2.56 per gallon in Corpus Christi and $2.58 in San Antonio.

Saudi Arabia’s foreign minister says there’s a reason gas prices are high. Prince Saud says there’s plenty of oil–but not enough of the refined product you put in your vehicle. The Prince said in a wide-ranging interview with the Associated Press that oil companies seem to be making decisions based on what their accountants tell them, and have lost their zest for finding new oil fields and opening refineries. He admits that adding refining capability is tough, but he says it needs to be done. In the meantime, he says oil analysts have told him oil prices will drop significantly, probably adjusting to around $45 per barrel.


Texas-based airlines suspended flights to cities being threatened by Hurricane Rita. Continental Airlines began operating a reduced schedule from Houston in anticipation of Hurricane Rita. The air carrier canceled all of its Houston flights at noon. Flights are expected to resume Sunday morning. Dallas-based Southwest Airlines and Irving-based American Airlines, discontinued scheduled flight service at Corpus Christi, Houston’s Hobby Airport and New Orleans.


The New Orleans-based subsidiary of Entergy has filed for bankruptcy protection in the aftermath of Hurricane Katrina. Entergy New Orleans announced the move today. A hearing is set for Monday on the bankruptcy petition filed in Baton Rouge, Louisiana. The company plans to borrow up to $200 million from its parent corporation, pending court approval, to pay wages and benefits and other costs. Entergy, which has operations in Texas, also plans to continue repairing and restoration of facilities wrecked by Katrina. Chairman Dan Packer says due to financial support from Entergy’s parent company, Entergy New Orleans can focus on the city’s reconstruction and restoration efforts.


BP has vowed to improve safety as the feds today fined the company $21 million over a deadly explosion at its Texas City refinery. Fifteen workers were killed and 170 others were injured in the fiery March 23rd blast. The Occupational Safety and Health Administration fine is part of a settlement with BP Products North America. OSHA is considering whether to refer some violations for possible criminal prosecution. Company spokesman Ronnie Chappell today said BP will improve health and safety training for refinery workers. The company also plans to hire a safety expert to review conditions at the refinery and make recommendations. Among the company’s plans are eliminating use of trailers within 500 feet of flares or blow-down stacks. Trailers had been near the processing unit when the explosion happened–killing or injuring those inside.


Government auditors have some questions about Katrina contracts. They’re concerned because some contracts for things like levee repair and emergency housing are open-ended. Some also don’t have clearly defined terms. One of the contracts went to a Halliburton company subsidiary. Vice President Cheney headed Halliburton from 1995 to 2000. The company’s been cited for overcharging the government for work in Iraq. The Katrina contracts were awarded because the companies involved had previous business relationships with the government. Critics of the deals say that promotes cronyism. A Homeland Security official says the department’s been looking at the contracts “from day one.”


It won’t be until next year that three Carnival Cruise Lines ships used during the Hurricane Katrina relief efforts will be back in service. The ships–which were chartered by the federal government–provided shelter for as many as 7,000 Katrina victims. The ship Ecstasy will resume four-and-five day cruises out of Galveston starting in April. But it will first have to undergo a 35-day refurbishment. The ship Holiday will resume cruises out of Mobile, Alabama in March. While the ship sensation won’t resume service out of New Orleans until October of next year.

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