August 6, 2008

Storm Doesn’t Faze Energy Companies

By Brett Clanton and Tom Fowler, Houston Chronicle

Aug. 6--For energy and chemical companies in the region, Tropical Storm Edouard turned out to be mostly a nonevent, causing only minor disruptions that were addressed quickly.

By late afternoon Tuesday, oil producers and drillers in the Gulf of Mexico were making plans to send workers back to offshore facilities, and refiners and chemical plant operators in southeast Texas were returning to normal operations.

Marathon Oil Corp.'s 72,000-barrel-per-day plant in Texas City remained shut down late Tuesday, but a decision to reopen it could come as early as today, said Angela Graves, spokeswoman for the Houston-based company.

Edouard made landfall on the upper Texas coast early Tuesday morning between High Island and the Louisiana border.

Though the rapidly forming storm had threatened critical oil and gas industry infrastructure, most facilities experienced little or no damage.

"Honestly, it highlights how well the companies are prepared for this type of situation," said Kenneth Medlock, an energy fellow with Rice University's Baker Institute and an economics lecturer.

The Interior Department's Minerals Management Service said Tuesday that 6 percent of oil production and 12.3 percent of natural gas production in the Gulf of Mexico had been halted because of evacuations of offshore platforms.

But oil companies, including BP, Shell and others, said they planned to resume full operations by today, as did offshore drillers like Noble Corp. that had evacuated workers.

Elsewhere, San Antonio-based Valero Energy Corp., the nation's largest refiner, said it was returning plants in Port Arthur, Texas City and Houston to normal production rates after reducing output for the storm.

Word that the Houston Ship Channel was reopening to all ship traffic helped ease concerns that crude shipments might not reach Gulf Coast refineries, which could force them to halt production of gasoline and other fuels.

In addition, major chemical makers in the region were planning to resume regular operations today after scattered storm disruptions.

Dow Chemical Co., the Midland, Mich.-based chemical giant, had closed plants in La Porte and the Clear Lake area but was moving to reopen them Tuesday evening, company spokeswoman Gina Gibbs-Foster said.

Germany's BASF cited "very minimal" impact to plants in Port Arthur and Beaumont and said all sites continued to run safely.

Meanwhile, gasoline distributors had relatively few delivery problems in the area, although some stations ran out of fuel briefly on Monday, said Brooks Smith, vice president of Bay Oil in Dickinson.

"Most of those outages were at stations that had a big weekend and then sold so much Monday morning before their regular deliveries showed up," Smith said.

Bill Tilger, operations manager for fuel wholesaler Sun Coast Resources, said operations were running smoothly and that even in Beaumont, where the storm hit hardest, his drivers were reporting normal deliveries.

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