Refinery output slowly recovering
JACKSON, Miss. – As half of the Gulf Coast refineries damaged by Hurricane Katrina begin to ramp up production this week, industry experts have this message: Be patient.
“What you’ve got are a whole series of requirements and processes, and that takes days, if not weeks,” said John Felmy, chief economist for the American Petroleum Institute.
The going also is slow for the restoration of offshore oil and gas production. Almost 70 percent of normal oil production and half of natural gas output remains shut down, according to the U.S. Minerals Management Service, which said activity slowly is recovering.
Eight major refineries that produce gasoline, diesel, jet fuel and heating oil were knocked out of commission and the output at two others was reduced by last week’s killer hurricane and the flooding that followed. That meant overall U.S. refining capacity was cut by more than 10 percent, contributing to a surge in retail gasoline prices and spot shortages around the country.
Motiva Enterprises LLC, Marathon Oil Corp. and Valero Energy Corp. said they hope to restart – and, in some cases, make fully operational – four of the refineries this week.
Motiva, a joint venture of Royal Dutch Shell PLC and Saudi Refining Inc., said its Convent, La., refinery was restarted on Sunday and its refinery in Norco, La., is expected to get started by midweek. Both are located west of New Orleans.
Marathon said over the weekend that its Garyville, La., refinery west of New Orleans should be fully operational early this week.
Valero said it still is hoping to restart its St. Charles refinery about 15 miles from New Orleans this week.
When running at 100 percent capacity, those four refineries represent slightly more than 1 million barrels of refined oil products a day.
In contrast, Chevron Corp.’s 325,000-barrel-a-day refinery in Pascagoula, Miss., and ConocoPhillips’ 247,000-barrel-a-day facility in Belle Chasse, La., south of New Orleans, sustained major damage and are unlikely to resume production for some time, according to the U.S. Department of Energy.
Industry experts say that even after power has been restored, restarting an oil refinery is a tricky and time-consuming process. Crews must be meticulous with repeated inspections, checking and rechecking for leaks. They also must ensure that all saltwater has been cleared or risk igniting a fire.
“What you have is an important set of steps in terms of the fact that these are high-temperature, high-pressure facilities,” Felmy said. “And that’s if you have not had any damage, and we know from preliminary reports that’s not the case.”