Wednesday PM September 17, 2008

House Democrats energy plan, the fate of drilling rigs and production platforms from Hurricane Ike, companies on the Houston Ship Channel without power, Landry’s estimates the damage, Freddie Mac-owned mortgages affected by Hurricane Ike…

House Democrats have pushed through a broad energy plan that will allow oil and gas drilling off the East and West coasts. It would allow states to authorize drilling 50 to 100 miles from their coasts, and the federal government could approve drilling 100 to 200 miles from shore. The package would also include $19 billion in tax incentives for alternative energy. It requires utilities to generate 15 per cent of their electricity from solar, wind or other alternative energy sources. Republicans noted that the measure fails to open areas closer to the coasts to 50 miles offshore. They say the proposal doesn’t allow states to share oil royalties with the federal government. The bill rolls back billions of dollars in tax credits that Congress has given to oil companies. It also requires the release of 70 million barrels of oil from the Strategic Petroleum Reserve. Co-sponsor Representative Gene Green of Houston says the bill goes father than Republican offshore drilling measures when they controlled Congress.

Reports on the fate of drilling rigs and production platforms from Hurricane Ike are coming in from the Gulf of Mexico. Rowan Companies is missing one of its nine rigs. Pride International reports losing a jackup rig during the storm. Noble Corporation says two of its semi-submersible platforms drifted from their moorings. BP says a drilling derrick on a spar rig toppled and sank during the storm. Diamond Offshore lost a drilling package on a jackup rig. Transocean found a semisub two miles from its mooring site. Ensco International has a missing jackup rig. Chevron has some damaged rigs. The Minerals Management Service reports 28 of the 3,800 offshore oil and gas platforms in the Gulf were severely damaged or destroyed by Ike. The MMS says 97.2 per cent of oil and 84.2 per cent of natural gas production in the Gulf is shut in.

GreenHunter Energy’s renewable fuels facility on the Houston Ship Channel has been without power, and says it may be without power for up to two months. There is some temporary power from two generators. Damage is reported as minimal at what is the nation’s largest biodiesel refinery.

Landry’s owner Tilman Fertitta estimates the damage to his properties in Galveston and Kemah at $50 million. Those properties make up about 25 per cent of his business. Taking the worst damage were his Landry’s and Flying Dutchman in Kemah and Fisherman’s Wharf in Galveston. He also owns the San Luis hotel, the Hilton, Holiday Inn and the IHOP restaurant in Galveston. He owns the Kemah boardwalk and shops there. The 96-foot-tall wooden roller coaster withstood minimal damage. Tillman promises to rebuild, saying things will be bigger and better. But he says the jobs of 3,000 of his employees are now in question. He employs 5,800 in the region, and 28,000 nationwide. The City of Galveston and FEMA have made their headquarters at the San Luis, Hilton and Holiday Inn, and Landry’s is supplying three meals a day to city and federal government workers.

Borrowers of Freddie Mac-owned mortgages affected by Hurricane Ike can make arrangements to delay mortgage payments if they were evacuated to avoid the storm. Freddie Mac is giving servicers the discretion to reduce or suspend mortgage payments or foreclosure proceedings for up to 12 months for borrowers in federally-declared major disaster areas. Their Web site offers more details.

Subscribe to Today in Houston

Fill out the form below to subscribe our new daily editorial newsletter from the HPM Newsroom.

* required