U.S. Gulf Coast energy companies began damage reviews at offshore production facilities and started evaluating onshore power losses after Hurricane Ida caused devastation in Louisiana and rampaged through offshore oil and gas fields.
Hundreds of oil production platforms remained evacuated and nearly 1.2 million homes and businesses in Louisiana and Mississippi were without power on Monday.
Production losses – including at nine Gulf Coast refineries – are expected to lift retail gasoline prices by 5 to 15 cents a gallon, tracking firm GasBuddy said. The extent of price increases will depend on how quickly electric power can be restored and when a major fuel pipeline can resume operations, said petroleum analyst Patrick De Haan.
About 1.72 million barrels per day (bpd) of oil production and 2,087 million cubic feet per day of natural gas output remain shut in the U.S. side of the Gulf of Mexico following evacuations at 288 platforms, the Bureau of Safety and Environmental Enforcement (BSEE) said on Monday.
The closures are equivalent to 95% of the Gulf’s crude output and 94% of gas production.
Crude oil futures rose on Monday but eased after touching a four-week high. U.S. gasoline futures climbed 2%, lending support to crude.
Colonial Pipeline, the largest U.S. fuel pipeline network, halted motor fuel deliveries from Houston to Greensboro, North Carolina. Its lines supply nearly half the gasoline used along the U.S. East Coast and an extended May shutdown led to fuel shortages.
A spokesman on Monday did not say when it expects to resume full operations.
Nine refineries that process 2.3 million barrels per day of oil into gasoline and other petroleum products, either shut or curtailed some production, the U.S. Department of Energy said.
Oil companies began surveying offshore platforms for damages. Royal Dutch Shell plans a second flyover on Monday of its assets and BP, BHP, Chevron and Exxon Mobil also said they were assessing offshore facilities.
“It will take some days to get a clear picture of possible impact,” said Ola Morten Aanestad, a spokesperson for Equinor ASA, which evacuated its Titan platform and halted production in the U.S. Gulf of Mexico.
The major power utility in Louisiana said it suffered “catastrophic” damage to transmission lines. One tower that provides power to oil and gas processing plants collapsed at the height of the storm. Its power lines fell into the Mississippi River and removing them will slow reopening the nation’s largest commercial waterway, officials said.
Nearly a dozen commercial shipping ports from New Orleans to Pascagoula, Mississippi, remained closed on Monday. The closures included Louisiana Offshore Oil Port (LOOP), the largest privately-owned crude export and import terminal in the United States.
Ida made a landfall near Port Fourchon, the land base for LOOP.
Source: Reuters (Reporting by Liz Hampton in Denver, Marianna Parraga and Erwin Seba in Houston; writing by Gary McWilliams; editing by Richard Pullin and Barbara Lewis)