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Lost U.S. gasoline output 10 pct of daily use-Gov’t

September 2, 2005

By Tom Doggett

WASHINGTON (Reuters) – The U.S. has lost production of
about 42 million gallons of gasoline a day, equal to 10 percent
of its normal consumption, because Hurricane Katrina shut down
oil refineries and forced others to reduce runs, according to
government estimates.

Nine major oil refineries remained offline in Louisiana and
Mississippi and several other facilities had reduced output.
That cut about 2 million barrels per day (bpd) of U.S. refining
capacity, which equals approximately 1 million bpd of gasoline
not being produced, the Energy Information Administration said.

One barrel holds 42 gallons so that translates into a loss
of 42 million gallons of daily gasoline output, the EIA
calculated.

“This represents about 10 percent of the nation’s
consumption, and is a major drop in the normal flow of gasoline
through the system,” the Energy Department’s statistical arm
said in its latest assessment of the hurricane’s lingering
effects on the U.S. energy sector.

The EIA said some of the refineries should be able to
resume operations in one to two weeks, but other facilities may
take several months to come back on line.

Several major pipelines that ship gasoline were also shut
down and are now slowly restarting operations. Fuel
distribution was affected along the Gulf Coast, Midwest and
East Coast, the EIA detailed.

“Localities that were being served from gasoline terminals
which already had low inventory levels, perhaps because they
were expecting a delivery in the near future, could run out of
supply before the next delivery arrives,” the agency warned.

“Other areas which did have plenty of inventories on hand
prior to the loss of the refineries and pipelines will be able
to withstand the loss of supply for a longer time,” it said.

Gasoline prices have shot up across the country because of
the disruption in gasoline supplies, with prices at many
service stations near or above $3 per gallon.

To help boost gasoline supplies, the Bush administration on
Thursday loaned three refineries 8.5 million barrels of crude
from the nation’s emergency oil stockpile.

The administration has also waived environmental rules that
had required only cleaner-burning gasoline and diesel fuel to
be sold, which should allow more petroleum imports from Europe
into the U.S. market.

President George W. Bush also asked Americans to conserve
gasoline. “Don’t buy gas if you don’t need it,” he said on
Thursday.




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