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North Carolina Energy, Relief Officials Stand Ready to Aid Rita-Stricken Areas

Posted on: Thursday, 22 September 2005, 21:00 CDT

Sep. 23--Storm-hardened North Carolina personnel are ready to respond to Hurricane Rita if Texas asks for assistance.

But so far no requests have been made, state and relief agency officials said Thursday.

"We're here; we're ready to go if needed," said Capt. Ken Oakes, head of the Salvation Army's Wilmington-area office. "We're not out of personnel or out of resources."

Progress Energy and the N.C. Department of Emergency Management said they also were ready to go if called upon.

Jamie Kritzer, spokesman with the N.C. Department of Forest Resources, said his agency was assembling a team with the likelihood that it would be deployed to Texas this weekend.

Job duties could range from relief operations to helping house and feed emergency responders.

Hurricane Rita is steaming toward a collision with the nation's biggest concentration of oil refineries along the Texas coast, raising new fears about the nation's gasoline supply and prices at the pump.

Oil and gasoline prices could spike again if Rita causes additional disruptions in supply, market analysts say. Last month's Hurricane Katrina caused prices at the pump to spike well above $3 gallon in this area. Just as prices started to drop, many local motorists noticed yet another spike Thursday and once again waited in lines to top off their tanks.

Traffic remained steady at the Gas Center No. 7 on Dawson Street on Thursday afternoon, even though regular gas had just hopped up 10 cents a gallon to $2.83 a gallon.

"I thought for sure we'd be run over again," said store manager Carol Pettet, adding that the price wouldn't stay steady for long. "They just told me from headquarters to get ready; it might go up again tomorrow," she said.

And customers were prepared for the worst.

"Oh, I'm here because of Rita. It's gonna go up again," said Lillie Devone, who heard that gas might cost $4 or $5 in the near future. "And that's really gonna hurt me because I live in Currie and have 35 miles to work ..."

On the other side of the pump, Olivia Davis was topping off the tank of her Chevy Avalanche a little after 4 p.m.

"I just put in $60 worth, and that wasn't a full tank," she said. "It's really expensive right now, and this thing doesn't like regular." Ms. Davis said she would conserve by cutting down her driving time.

"I have to take out a day each week when I don't do any errands," she said.

"We'll see how far that takes me."

Four Louisiana refineries are still out of operation from Katrina. Those plants accounted for about 5 percent of the nation's refining capacity and -- with the Texas shutdown of several major oil refineries this week -- the outlook isn't rosy.

"That will reduce supply at a time when we don't need" another cut, said Roger Diwan, who studies oil markets for research and consulting company PFC Energy in Washington.

Mr. Diwan said even if Rita causes no damage, it would take refineries four or five days to start up again -- a gap that could strain the nation's fuel supply.

Oil prices climbed more than $1 a barrel Wednesday as traders calculated the possibility that Rita could damage oil-industry facilities on land or in the Gulf of Mexico. Heating oil jumped nearly 3 cents to $2.0387 a gallon, while gasoline surged more than 7 cents to $2.0531 a gallon.

Texas has 26 refineries that account for more than one-fourth of the nation's refining capacity, mostly along 300 miles of Gulf Coast from the Louisiana border to Corpus Christi. That's right in the path weather forecasters predict for Rita, which sank from a Category 5, 175-mph behemoth Wednesday to a Category 4 storm Thursday and was expected to make landfall this weekend.

BP began closing its massive Texas City refinery Wednesday, and Marathon Oil Corp. followed suit at its plant nearby. Shell Oil closed its Houston-area refinery, which kept running through the last major Texas hurricane, Alicia in 1983.

"It was a split decision between taking a risk and playing that waiting game of seeing where it's going to land and being sensitive to employees getting home," said David McKinney, a Shell spokesman.

Meanwhile in the Gulf of Mexico, Rita began to take a toll on oil production, which hadn't yet fully recovered from Katrina. Fresh evacuations that began this week in the eastern waters of the Gulf spread farther west, one step ahead of the storm.

Combined, the damage from Katrina and the precautionary evacuations due to Rita have slashed the normal Gulf oil production of 1.5 million barrels a day by 73 percent, the U.S. Minerals Management Service said Wednesday.

Since Katrina evacuations began Aug. 26, the storms have cut more than 27 million barrels of oil production, the agency said. Natural gas production was 47 percent below normal Wednesday.

Jim Williams, an economist who follows the oil industry, believes that drivers who rush to fill up their gas tanks ahead of gas price increases may actually cause gas prices to increase.

Reggie Stanley, chief operating officer for the company that runs GoGas stations, said the rush on stations could cause the price to go up because when retailers run out of gasoline, they have to buy more at higher prices.

They then have to pass those increases on to motorists.

GoGas is monitoring its situation day-to-day, he said. Several weeks ago, when gasoline prices soared, GoGas closed its service stations in the area.

The company hadn't run out of gas, Mr. Stanley said. The company closed its stations because it would have had to buy gasoline at such inflated prices that customers would think they were being gouged. And that impression, he said, is not something a chain that offers low prices wants to leave with its customers.

When the going gets tough, the major gasoline companies such as Shell or Citgo keep most of their product and ration the amount they pass along to independent dealers, such as GoGas.

Local wholesalers are waiting to hear what the majors are about to do. Bill Hobbs, of gasoline provider W.K. Hobbs, said he saw a substantial increase in unbranded gasoline prices Thursday but thought he wouldn't hear from the majors on their price changes until early Thursday evening or this morning.

Ted's Exxon on South College Road, however, already had seen a 30-cents-per-gallon hike in its cost by early Thursday afternoon, said Randy Sessoms, manager.

The National Retail Federation does not monitor gasoline prices, but it does monitor consumer spending. The more consumers spend on gasoline, the less they have for other purchases, NRF spokesman Scott Krugman said.

Rumors of $5-a-gallon gasoline, he said, are not based in fact. He wanted to remind people that, following Katrina, gasoline was rumored to go as high as $4.50 a gallon and it didn't. The analysts who predict $5 a gallon gas, he said, may just be looking for their 15 minutes of fame.

Analyst Tom Kloza of research firm Oil Price Information Service said many of the Houston refineries are well above sea level and have withstood past storms. He called the reaction hysteria -- unless Rita scores a direct hit on the Texas refineries.

"People need to take a breath," Mr. Krugman said.

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Copyright (c) 2005, Star-News, Wilmington, N.C.

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PGN, BP, RD, SC, SHEL, MRO,

Source: Morning Star

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