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US Gulf refineries at mercy of battered power grid

While Gustav's impact on the state was less severe than devastation left three years ago by Hurricane Katrina, its damage to Entergy's grid was worse, particularly in the Baton Rouge area, an Entergy official said.

Baton Rouge is home to the nation's second-largest refinery, owned by Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz).

Entergy did not give an estimate for the duration of repairs, but said power restoration will be a "delicate balance" of adding load as repairs to the transmission system allow.

The company has been unable to fly helicopters over its transmission system to assess damage fully, though thousands of out-of-state workers are headed toward Louisiana to assist in the restoration.

From Wiki:

The local electric utility Entergy Corporation was impacted severely, and Entergy New Orleans filed for bankruptcy protection on September 23, 2005. The company cited lower revenue and storm restoration costs as the primary cause. Parent company Entergy Corporation promptly arranged $100 million in financing.

This is another point in the case for credit restrictions hampering infrastructure companies in the future. Imagine if Ike proves to be the Katrina to Gustav's Rita. I don't throw around hyperbole usually, cautionary principle and all, but Gulf production would be truly FUBAR! To say nothing of the impact on citizenry.

And, once again, this is taking place in an era of relatively cheap fuel, grid outside impacted area humming along 24/7, etc.

TheDude said:

This is another point in the case for credit restrictions hampering infrastructure companies in the future.

Even though we can’t put a number on it, the credit crunch has got to have an impact on restoration time after this storm. Insurance companies will be harder to deal with and slower to pay, banks will not be ready to lend a hand, and corporations will be sitting firmly on what cash they have.

This will flow through to the entire local economy, and slow the recovery. Of course if enough storms come through, they just won’t be able to recover period. With PO pushing up the price of everything, someday that will happen. How far away someday is, is the question?

Entergy web site, with details of problems and maps showing extent of outages.

Rigzone has some excellent maps of both offshore and "Deepwater Production Facilties That Experienced Hurricane Winds." Will come in handy for future reference.

Shorty...you just reminded me:

There is a significant change this time around regarding insurance coverage. After the underwriters took a bath on Katrina they made some huge policy changes. First, they capped the total coverage per incident....not per company. No more unlimited coverage after the deductible. Additionally, once they reached a certain exposure in one area they would not write any more coverage. This would imply some of the facilities were not insured beyond self coverage. I’ve seen nothing publicly regarding how this may have reduced overall coverage in the Gulf region. Not really in the best interests of public companies to start advertising a big jump in UNINSURED liability. Just a wild ass guess on my part but a year ago I estimated 100’s of billions of un- or under- insured liability came into existence after Katrina. I do know many companies rushed to sell off their OCS shelf fields to smaller companies willing to roll the dice on the risk. But there’s a catch there too: even if you sell your OCS property you’re still liable if the new owner goes bell up. Even if you only owned just a small percentage of a platform 20 years ago, if the Feds came looking for money and you were the only one left with assets, they had you for 100% of the liability.

We’ll have to try to read between the lines when companies begin making statements regarding damages and repair costs.

I'm starting to get a very sneaky feeling this isn't going to turn out as well as the press thought Monday night. I do believe the immediate problem is going to be the gasoline and diesel supply issues.

Caught this earlier... Lake Charles radar report one spot with 32 inches of rain! and a large swath of 25 inch rainfall... just the rain alone would do a lot of damage...

A power pole crosses La. 3090 at Port Fourchon Tuesday

Photo at link.

Still no answer on power's return

Actually, thinking back on the press coverage of K the only visual they had to play with immediately was that drilling rig slammed up against the bridge in Missisippi. A vague memory of some offshore platform damage but not sure if they were from the MSM or industry shots. In truth, almost all the visuals were focused on N.O. and not the oil patch. I'm in the oil patch and I haven't seen evidence yet whether there was more or less infrastructure damage then occured during K.

As you say: time will tell.

The Louisiana Offshore Oil Port, a major center near Port Fourchon that offloads, stores, and transports crude oil, looks to have been escaped major damage from Hurricane Gustav.

"It looks OK," said LOOP spokeswoman Barb Hesterman, of the conclusions from surveys by the company made in the last day or so.

No major damage at LOOP, operations to restart soon

I wonder what "soon" means. Even if the Loop can pump oil to the shore facilities they have no tankers there to unload at the moment. And when the tankers show up the oil will have to be pumped to the onshore tankerage. How long before the onshore facilities can receive? And then how long before the refiners can receive from any of the storage facilities? Maybe it will all come together "soon'. And, then, maybe not.

Terrebone Parrish no one back until Friday


From the article....


"We do have more damage than surrounding parishes. We took a direct hit," said Pat Gordon, Terrebonne Parish manager. "If we end up letting people back in here, there could be fires. There is no sewage running right now, there is no place to buy groceries,(or) medication. We have nothing to support the general populace."

Gordon asked evacauated residents to remain patient until utilities and infrastructure is repaired. "This is one of the worst windstorms we've had in about 50 years. It was a different type of storm," Gordon said.



That LOOP estimate was based on a flyover I believe, yesterday. It is going to depend a lot on the grid i would think how soon a lot of this stuff gets going again. Entergy is saying this is as bad as Katrina today as far as the grid goes.

I think this is going to be the larger problem, that and not allowing folks back in to take care of business. Its going to cause problems at the refineries re-opening.

Not surprising really, a CAT 2 is nothing to sneeze at.

UPDATE 1- Entergy to restore power in New Orleans

Many more New Orleans area residents should have electricity in a few days, but the entire restoration effort will take longer -- up to three to four weeks -- in other storm damaged areas near Baton Rouge and in rural areas, utility officials said on Wednesday.

"We are confident the lines we have are sufficient to maintain stability of the grid and to bring on additional generation," said Randy Helmick, Entergy's vice president of transmission and official "storm boss" told reporters on a call.

Entergy reported 814,000 customers still without power on Wednesday, down from the storm peak of 850,000. New outages were reported in northern Louisiana and Arkansas as remnants of the storm moved inland.

The utility said it is working with large industrial customers, including more than a dozen refiners, to restore power, but warned that, because refineries consume a large amount of power, full operations may be limited.

It "looks OK"... That is one vague statement.

Gasoline prices dropped up here today!

As of 9:30 AM EDT September 3, the Louisiana Offshore Oil Port (LOOP) onshore and offshore operations remain suspended. According to LOOP personnel, the company is currently performing damage assessments.

Department of Energy

It ain't over until it's over:

http://321energy.com/editorials/west/west090208.html

9/04/08 6:30am CDT All LOOP operations are suspended at this time.

From the LOOP homepage

A new morning has dawned, and the above is all that the LOOP said in their news flash. Rather terse and no mention, as there was yesterday, of checking the situation.

frank,

The "looks OK" isn't vague. It's just the oil patch way of saying it wasn't on fire nor has it fallen over into the gulf. Like all other businesses we do have a history of shooting the messenger. Tha's why all the companies have professional PR folks to "inform" us.

The LOOP is important but more so is Port Fourchon. I have heard very little about that place...and over at the oil drum it appears they suffered some heavy damage...
This still has the makings to be something pretty serious...

So true about Fourchon GG. Katrina wiped out the facilities at Venice (easy of Fourchon). Most of the Venice ops were relocated to F. Essentially all ops east of the middle of the La. coast are run out of F. now. One of my venders got a report of a 5' tiday surge at F. Doesn't sound like much but would put most of the electrical systems and vehicles out of service for a while.

ROCKMAN said:

So true about Fourchon GG. Katrina wiped out the facilities at Venice (easy of Fourchon). Most of the Venice ops were relocated to F. Essentially all ops east of the middle of the La. coast are run out of F. now. One of my venders got a report of a 5' tiday surge at F. Doesn't sound like much but would put most of the electrical systems and vehicles out of service for a while.

A 5’ storm surge over an area that is only about 8” above sea level is not a good sign. Electric motors and 440 three phase control systems do not work well underwater. I really don’t think that the media reports are worth much at this point. They are just parroting back what some PR agent said (who probably also doesn’t know much about anything).