Oil Storms

Katrina has interrupted oil production, importation, and refining in the Gulf area. A tenth of all the crude oil consumed in America and almost half of the gasoline produced in the country comes from refineries in the states along the gulf's shores. An additional 24 percent of the natural gas supply is extracted or imported in the region. The Strategic Petroleum Reserve is stored along the Gulf. At least 20 offshore oil platforms have gone missing, sunk, or gone adrift, according to the Coast Guard. One oil rig, in dock for repairs before the storm, broke loose and hit the road bridge in Mobile, Alabama. Two others went adrift in the Gulf of Mexico, but were resecured. One platform has washed up onshore at Dauphin Island, Alabama. The Royal Dutch Shell MARS platform, producing around 147,000 barrels a day, has been severely damaged.

Port Fourchon, a key oil and gas hub 60 miles south of New Orleans on the Gulf of Mexico had taken a direct hit from the hurricane. This port makes up 16 to 18 percent of the U.S. oil supply and Hurricane Katrina "will impact oil and gas infrastructure, not just short term but long term as well. Louisana Highway 1, the only major access route to Port Fourchon, is 75 percent submerged.
The Louisiana Offshore Oil Port, which imports 11% of US oil consumption, closed on August 27, and Royal Dutch/Shell reports a reduction in production of 420,000 barrels per day. This port was undamaged and would be able to resume operation within hours of getting power back. Many refineries are located in this area and may be disrupted by the hurricane.

Due to fears that the production of oil in the United States will be cut by up to one-third of normal capacity, the price of oil fluctuated greatly throughout the day. Long lines developed at some gas stations throughout the U.S. as customers rushed to buy gasoline, anticipating price increases in the wake of the storm. Per gallon gasoline prices reached and exceeded $3 USD in America within days as a result—setting record highs; in Atlanta, Georgia prices are already as high as $3.50 USD a gallon as consumers rush to fill up.
However, this is partially due to a consumer panic in Georgia on August. Many gas stations ran out of fuel despite the high prices.

As of August 31, eight Gulf of Mexico refineries remain shut down and one is operating at reduced capacity.
Evaluation of five of the eight refineries is incomplete since access is limited. Aggregate offline capacity exceeds 1.9 million barrels per day (about 10% of total US oil consumption).
Aside from the problems involved in re-starting the refineries there are major issues with worker housing, since a large proportion of their homes were destroyed by the hurricane.

The Environmental Protection Agency has moved to reduce prices by temporarily lifting fuel standards in America until September 15.
The Strategic Petroleum Reserve will be releasing some crude oil as well to combat prices as major economic consequences are predicted if they remain high for a long period of time...Yesterday (8/31/05) Bush authorized the SPR to loan oil to help refineries whose operations had been affected by Katrina. Oil has been released and sold in the open market under emergency conditions only once, in 1991. However, oil has been temporarily loaned out or exchanged to private oil companies in a few circumstances. Access to the reserve is determined by the conditions written into the 1975 Energy Policy and Conservation Act (EPCA), primarily to counter a severe supply interruption. The maximum removal rate, by physical constraints, is 4.4 million barrels per day. Oil could begin entering the marketplace 13 days after a Presidential order. The Dept. of Energy says that it has about 7 to 8 weeks worth of inventory protection in the SPR. This, combined with private sector inventory protection, is estimated to total 150 days worth of emergency supply.