8/28/2005

Oil industry shudders as hurricane nears - National Guard in Iraq

Threatened with a potential catastrophe, the mayor of New Orleans ordered people in the low-lying city to evacuate Sunday, with Hurricane Katrina, gaining strength, expected to hit the area Monday morning.

President George W. Bush already had declared a state of emergency for Louisiana and Mississippi, which, along with other parts of northern Gulf Coast states, lie in the hurricane's path. Seven people died on Friday as the storm crossed southern Florida.

[Oil companies have closed offshore rigs and evacuated workers, shutting down about one million barrels of daily production, The Associated Press reported. An oil analyst with Cameron Hanover, Peter Beutel, said: "It's not looking real friendly here. This is unmitigated, bad news for consumers."]

a significant impact on oil prices going forward."

Crude oil prices are already at record levels in the United States, and the hurricane will curtail refining activity in the region. The Gulf of Mexico is crucial to America's energy infrastructure - offshore oil and gas production, import terminals, pipeline networks and numerous refining operations throughout southern Louisiana and Mississippi.

With more than a million people in its suburbs and center, New Orleans is surrounded on three sides by water and lies below sea level in a bowl-shaped basin. If the storm surges exceed 25 feet, or 7.6 meters, and overwhelm the city's levees, its pumping system will fail.

"That's why we are taking this unprecedented move," Mayor Ray Nagin said at a news conference that was broadcast live. "The storm surge most likely will topple our levee system." In an interview later with CNN, the mayor also referred to the potential impact the hurricane could have on the oil supply from the vulnerable area.

"The real issue, that I don't think the nation is paying attention to," Nagin said, "is that through the city of New Orleans, through the Gulf of Mexico, we probably deal with almost a third of the nation's domestic oil that is produced. And that will most likely be shut down." He added: "This can have a significant impact on oil prices going forward."

Crude oil prices are already at record levels in the United States, and the hurricane will curtail refining activity in the region. The Gulf of Mexico is crucial to America's energy infrastructure - offshore oil and gas production, import terminals, pipeline networks and numerous refining operations throughout southern Louisiana and Mississippi.

In televised remarks Sunday, Bush urged people in threatened areas to evacuate to safer ground. "We cannot stress enough the danger this hurricane poses to Gulf Coast communities," Bush said, adding that everything possible would be done to help the region.

Many of Louisiana's national guard forces are now in Iraq but, the mayor said on CNN, there are 1,500 troops ready to be deployed and a few thousand that could be tapped quickly. "We are facing a storm that most of us have long feared," Nagin said at the news conference.

Governor Kathleen Blanco said Interstate 10, which was converted Saturday so that all lanes headed out of the city, was totally jammed, The Associated Press reported.

A Category 5 hurricane means that its storm surges are generally greater than 18 feet above normal and that its winds exceed 155 miles an hour.

The hurricane center said Katrina had gained "potentially catastrophic" strength and issued a warning for the northcentral Gulf Coast region, from Morgan City, Louisiana, to the Alabama-Florida border.


New Orleans shudders as hurricane nears - Americas - International Herald Tribune

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