Natural catastrophes

2.9, Hurricane Gustav

US: the energy industry began to breathe a sigh of relief as assessments of onshore refineries and offshore oil rigs and platforms revealed no significant damage from hurricane “Gustav.” Several companies conducted flyovers of their Gulf of Mexico properties on the day after a weaker-than-expected storm cruised through the gulf’s oil patch. Catastrophe risk management consulting firm AIR Worldwide expects offshore losses from the storm to be $1.8bn to $4.4bn. All of Shell’s platforms and rigs appeared to be in place during a flyover of the company’s offshore properties. Only one of company’s refineries was not yet operating. About 87% of manned platforms had been evacuated in advance of the storm. About 100 rigs, or 82% of those in the Gulf, had also been evacuated in anticipation of Gustav. Platform staffing will continue throughout the week and production could be completely restored again in three to five days. The country’s economic attention was focused on the hurricane’s effect on refineries and offshore petroleum production rigs. It was feared that the combination of prolonged production interruptions could trigger rising prices. Indeed, Chevron Corp decided not to close its Pascagoula refinery, which processes 330,000 barrels of oil a day. Billions of dollars were at stake in other wide-ranging economic sectors, including sugar harvesting, the shipping business and tourism. The Mississippi Gaming Commission ordered a dozen casinos to close. Over the previous week, Hurricane Gustav triggered flooding and landslides that killed at least 11 people in the Caribbean. The hurricane also prompted the historic evacuation of 1.9 million people from the Louisiana coast, comprising about 90% of the population. Thousands more left Mississippi, Alabama and flood-prone southeast Texas. Louisiana and Mississippi temporarily changed traffic flow, so that all highway lanes led away from the coast, and cars were packed bumper-to-bumper. Stores and restaurants shut down, hotels closed and windows were boarded up. Some who planned to stay changed their mind at the last second, not willing to risk the worst. Surge models suggested that large areas of southeast Louisiana, including parts of the greater New Orleans area, could be flooded by several feet of water. Hurricane Gustav appeared most likely to overwhelm the levees west of the city, which were underfunded and neglected for decades and are years from an update.