Refineries Face Possible Outages Following Hurricane Ida

Louisiana fuel makers struggle to recover from power grid damage.

September 02, 2021

Aerial View of an Oil Refinery

NEW ORLEANS—It may take some Louisiana refineries several weeks to resume operations following heavy rains and 130 mph winds that accompanied Hurricane Ida, the Wall Street Journal reports.

Valero Energy, Marathon Petroleum, Royal Dutch Shell and other oil refiners are still assessing damages across 2,000 miles of electric-transmission lines. In total, nine Louisiana refineries with about 2.3 million barrels a day of refining capacity—13% of the U.S. total—were offline Tuesday, the Energy Department said. Those facilities account for almost a quarter of the Gulf Coast’s oil refining capacity.

“Power supplies remain the biggest impediment to restoring operations,” said Andy Lipow, president, Lipow Oil Associates LLC in Houston. He estimates that it will take two to three weeks for some refineries west of New Orleans to recover as power is restored. Others southeast of the city could take about a month to recover because of a higher potential for flooding.

The oil and fuel markets will probably see minor impact, however. Gasoline inventories are ample ahead of Labor Day weekend, the start of a seasonal drop in fuel demand. Plus, many people are still working from home because of the pandemic.

Still, prolonged outages could contribute to a regional disruption in fuel supplies. On Tuesday, roughly 35% of gas stations in Baton Rouge and almost 30% of stations in New Orleans had run out of fuel, according to the fuel and price tracker GasBuddy.

Colonial Pipeline was able to restore service to Lines 1 and 2 before midnight on Monday, the company said. Colonial Pipeline pre-emptively shut down two of its main lines ahead of Hurricane Ida.

“This quick turnaround was made possible thanks to our employees’ continued dedication to safety and excellence in everything they do,” said Wes Dunbar, vice president of operations for Colonial Pipeline. ​“We also would not have had the success we are seeing today without the coordination from our local, state and federal partners, and the strong relationships we have built with them up and down the pipeline.”

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