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Energy & Environment

Refineries, Petrochemical Plants May Take Hit From Ship Channel Closure

A shortage of imported crude oil at refineries would push gas prices higher

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A barge loaded with marine fuel oil sits partially submerged in the Houston Ship Channel, March 22, 2014. The bulk carrier Summer Wind, reported a collision between the Summer Wind and a barge, containing 924,000 gallons of fuel oil, towed by the motor vessel Miss Susan. [Caption and image credit: U.S. Coast Guard]

Even with the boom in domestic oil production, Houston’s refineries still need imported crude to function at full capacity.

“It’s not going to take too long [for them] to use up their inventory at two million barrels per day.”

Bill Gilmer heads the Institute for Regional Forecasting at the University of Houston’s Bauer College of Business. Gilmer says if the ship channel is closed much longer, it could disrupt gasoline production and drive up prices. And it’s not just imports that are blocked. Exports from the region’s petrochemical plants are bottled up as well.

“Petrochemicals are intermediate products that wind up mostly as plastic and synthetic rubber. There’s a lot of industrial processes that are going to be very dependent on getting that product out of the Houston area.”

Saturday’s collision took place at “the Texas Y” — where inbound ships either cross Galveston Bay toward the Port of Houston or turn up into the Port of Texas City. It’s one of the busiest intersections in the nation for marine traffic.

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Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew Schneider is the senior reporter for politics and government at Houston Public Media, NPR's affiliate station in Houston, Texas. In this capacity, he heads the station's coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments...

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