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The effects of Hurricane Ida on U.S. energy supplies

Companies evacuated oil and gas platforms south of Louisiana ahead of Hurricane Ida but a far greater worry was potential damage to refineries and petrochemical plants in its projected path from flooding and storm surge.

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The effects of Hurricane Ida on U.S. energy supplies

Nearly 300 offshore platforms, or half of all manned platforms in the Gulf of Mexico, were evacuated before the storm. Their production was temporarily halted by the U.S. Bureau of Safety and Environmental Enforcement stated on its website. Also, floatable rigs were also removed. The agency stated that more than 80% of the gulf oil-and-gas production was halted.

A potentially even more grave concern was the fate for the refineries and petrochemical plant along the Mississippi River, Baton Rouge to New Orleans, in or near the path of a storm's maximum sustained winds. This storm is expected to make landfall on Sunday at 130 mph (209 km/h).

Nearly one-fifth the nation's oil refining capacity can be processed at Louisiana's 17 oil refineries. Richard Joswick, head S&P Global Platts Analytics, stated that more than 4,000,000 barrels of refining capacities were in danger.

According to the Energy Information Administration, Ida could have an impact on local energy supplies -- particularly transportation fuel. The maps show that more than a dozen plants are at risk of flooding along the petrochemical corridor.

It is not clear if the domestic fuel supply will be affected. The average daily oil consumption in the United States is just under 20 million barrels per day. Analysts disagree on the timing of this prediction, but Platts stated that the storm could stop production at 765,000 barrels per day in the gulf.

Joswick of Platts said that any price impact from Ida on petroleum are most likely to be greatest for gasoline, but could return to pre-storm levels within one to three weeks.

It wasn't immediately clear how many refineries or petrochemical plants would be closed.

Phillips 66 had stopped production at its refinery in the Mississippi, just south of New Orleans, Belle Chasse, Louisiana. This was due to "the potential storm surge," according to a company spokesperson Bernardo Fallas. It can produce 250,000 barrels per day.

Exxon Mobil stated that its Baton Rouge refinery produces approximately 520,000 barrels per day. Chevron, however, said it had closed down operations at the terminals along the Mississippi and Gulf coasts and related pipelines. Shell, Marathon, and Valero have also refineries that are located near the path of the storm.

Peter McNally, a Third Bridge energy analyst, stated that the industry had been through similar events over the past few decades. Nearly exactly one year ago, wind damage caused by Hurricane Laura struck several refineries in Lake Charles west of Ida.

Jeff Masters, a meteorologist who flew missions to hurricanes for the government and created Weather Underground, stated that Ida will move through "the absolute worst place for hurricanes."

Although refineries and petrochemical plant are designed to withstand strong winds, they may not be prepared for high water. This is becoming a bigger problem with global warming, which has increased rainfall in large storms.

McNally stated that flooding is the biggest concern for the industry. This is what caused so much destruction in 2017's Hurricane Harvey in Houston.

"Louisiana's low elevation means that you are more susceptible to flooding. These items are designed to withstand winds, but flooding is more difficult," he stated.

Sixty percent (60%) of the gasoline that is used on the East Coast comes from the Gulf Coast. Much of this fuel is transported through the Colonial Pipeline which lies in the path of Hurricane Sandy.

Louisiana is responsible for 9% U.S. natural-gas yields, in addition to its oil production. According to the Energy Information Administration, 55% of U.S. LNG exports were made by Louisiana's two liquefied gas export terminals last year.

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