Gulf oil production resuming

The nation’s oil and gas hub along the Gulf Coast is slowly coming back to life in the aftermath of Hurricane Isaac.

Offshore oil platforms are beginning to ramp up production as crews are returning. Refineries are beginning to restart units as power is restored and floodwaters are cleared out.

While a substantial amount of oil and gas production remains off line, production is coming back as expected. No major damage to oil platforms or refineries has been reported, and no further storm-related spikes in energy prices are expected.

The Bureau of Safety and Environmental Enforcement said Monday that 800,000 barrels per day of oil production remained off line, 58 percent of Gulf of Mexico production. About 100,000 barrels per day of production was restored between Sunday and Monday.

At the height of the storm 1.3 million barrels per day of oil production was suspended. The U.S. consumes an average of 19 million barrels of petroleum every day.

Companies have been quickly returning workers to platforms. About 12 percent of the region’s platforms were still without staff. Nearly all of the Gulf’s offshore platforms and rigs were evacuated last week.

Nine refineries in the path of Isaac are restarting or operating at reduced rates, according to the Energy Department. One refinery has returned to full operation and one, the Belle Chasse, La., refinery operated by Phillips 66, is still shut down because it is still without power.

The company said Sunday most of the floodwater had been cleared from the refinery and most refinery personnel had returned to work to prepare the plant for restart when power was restored. On Monday, the company said there was no update to the refinery’s status.

Refineries in the path of the storm shut down or began operating at lower rates to protect their operations, depriving the market of millions of gallons of gasoline and sending prices higher. Refiners consume enormous amounts of electricity and they generate steam to cook crude oil into gasoline, diesel and jet fuel. If the process is interrupted suddenly by a loss in power or steam, fluids can get trapped in equipment and restarting the refinery can take many weeks. Instead, operators often choose to slow or shut refineries before a storm hits so they can restart as soon as power is restored.

Onshore pipelines, ports and terminals have reopened, though some are still operating with restrictions, the Energy Department said. Some sections of Shell’s offshore pipeline network have restarted, and others are expected to restart in the next few days.

Several natural gas pipelines remain shut, along with natural gas processing plants that depend on gas from the pipelines. The Energy Department reported that most operators anticipate gas flows resuming over the next few days.