Does White House Know?

123jump.com Staff
02 Sep, 2005
New York City

As New Orleans Mayor issues a desperate S.O.S in response to a rapidly developing out of order situation, many in the country feel that the nation's emergency response system and White house efforts are far short and too slow to respond. White House advisors and staff give an assessment of readiness of oil refining and transportation infrastructure to the national media vastly different from what is learned from the private sources.

Even as the situation deteriorates by the hour in the Southern region of Louisiana, Alabama, and Mississippi, the response from FEMA, White House, and Homeland Security remains very slow and lacks coordination.

Several statements made by the Federal officials contradict the events reported by people from three state officials, mayor of New Orleans, and local and national news and TV reporters.

EIA reports fall-off in refining and transportation capacities

According to the Minerals Management Service (MMS), as of 11:30 Central Time September 1, Gulf of Mexico oil production was reduced by over 1.356 million barrels per day as a result of Hurricane Katrina, equivalent to 90.43 percent of daily Gulf of Mexico oil production (which is 1.5 million barrels per day).

The MMS also reported that 7.866 billion cubic feet per day of natural gas production was shut in, equivalent to 78.66 percent of daily Gulf of Mexico natural gas production (which is 10 billion cubic feet per day).

There have been many reports in the media of gas stations in various parts of the country that are out of gas. With about 2 million barrels per day of refining capacity shut in or reduced due to Hurricane Katrina, approximately 1 million barrels per day (42 million gallons per day) of gasoline is not being produced.

This represents about 10 percent of the nation's consumption, and is a major drop in the normal flow of gasoline through the system. In addition, major pipelines originating in the Gulf of Mexico area (namely the Plantation and Colonial product pipelines and the Capline crude oil pipeline) have been severely impacted or are closed.

As a result, the distribution of gasoline, particularly in the Gulf Coast, Midwest, and East Coast regions of the country, has been significantly affected.

Unlike 2004's Hurricane Ivan, which affected oil production facilities and had a lasting impact on crude oil production in the Gulf of Mexico, it appears that Hurricane Katrina may have a more lasting impact on refinery production and the distribution system. However, that news is varied, with some refineries likely able to restart their operations within the next 1-to-2 weeks, while others will likely be down for a more extended period, possibly several months in length.

Does the Federal Government know what is going on?

Government assessment of the situation in New Orleans, Gulf of Mexico and damage to nation’s oil transportation capacity is in stark contrast with the realities on the ground.

Allan Hubbard, said on an interview with Nightly Business Report, Business TV show, that three pipelines transporting oil from the Louisiana region are operating or close to operating ‘near full capacity’. While several reports two hours later on CNN reported that only one of the three major pipelines is operating at 38% capacity.

Mr. Hubbard reported that only nine of the fourteen refineries are not operating, but only hour later CNN, FOX and local TV news in Florida reported that ten refineries are not working.

After five days Congress will convene

Emergency session of U.S. Congress and Senate is expected to convene on Friday to pass disaster bill of $10.5 billion. Federal Emergency Management Agency, FEMA, is spending $500 million per day and has only $2.5 billion left for the annual budget.

Will airlines have enough fuel to fly?

President of Air Transport Association said this afternoon that if nation’s jet fuel supply does not improve in the next three days, then airlines may not have fuel to last more than fifteen days. Currently U.S. airlines industry use 52 million barrels of jet fuel per day.

Refining & Marketing Capacity in Louisiana State

AS reported by the U.S. Energy Department

Refineries: Distillation capacity of 2,772,723 Barrels Per Calendar Day (BCD) (2005)

*Calcasieu Refining Co. (Lake Charles @ 30,000 BCD)
*Calumet Lubricants Co. LP (Cotton Valley @ 13,020 BCD)
*Calumet Lubricants Co. LP (Princeton @ 8,300 BCD)
*Calumet Shreveport. LLC (Shreveport @ 35,000 BCD)
*Chalmette Refining LLC (Chalmette @ 187,200 BCD)
*Citgo Petroleum Corp. (Lake Charles @ 324,300 BCD)
*ConocoPhillips (Belle Chasse @ 247,000 BCD)
*ConocoPhillips (Westlake @ 239,400 BCD)
*ExxonMobil Refining & Supply Co. (Baton Rouge @ 493,500 BCD)
*Marathon Ashland Petroleum LLC (Garyville @ 245,000 BCD)
*Motiva Enterprises LLC (Convent @ 235,000 BCD)
*Motiva Enterprises LLC (Norco @ 226,500)
*Murphy Oil U.S.A. Inc. (Meraux @ 120,000 BCD)
*Placid Refining Co. (Port Allen @ 48,500 BCD)
*Shell Chem LP (Saint Rose @ 55,000 BCD)
*Valero Refining Co. Louisiana (Krotz Springs @ 80,000 BCD)
*Valero Saint Charles Refinery (Norco @ 185,003 BCD)