Oil and Katrina
Thankfully, Katrina has been downgraded to a Category 3 hurricaine, hopefully stemming the hell on earth projected.
The pain and endurance of those directly affected is not for me to share- there are many places we can find hurricane blogs that will show the horrors of this thing.
But Katrina has already had a dramatic effect on the nation. The Big Easy is a hugely important shipping city for many goods and industries, and the condition of the ports may well be wildly damaged. But you need look no futher than the Gulf Coast Oil Rigs to see how incredible an indirect impact the hurricaine will have on us all:
The twist is here: The US has reached its current capacity for refining crude oil and has sustained it through several years. The oil fields across the world, including OPEC countries, continue to vow to increase production, but it's questionable whether they even can. Tapping something as insignificant as the Alaskan Wildlife Reserves, where there will be no oil benefit or relief for 20 years and the production will barely make an impact anyway, is meaningless. What we have to understand is that our oil consumption is what's absurd here, not the natural world which affects our oil.
One way we can think about Katrina is to consider what happens when Katrina II, followed by Andrew II, sweep through the Gulf; what happens when these events destroy our remaining Gulf oil rigs and coastal refineries, currently responsible for up to 20% of domestic oil production, after the Peak Oil moment occurs, in 5, 10, 15 years? What happens when the hurricane crushes our energy supply and we don't have way to avoid the crippling effect then?
The pain and endurance of those directly affected is not for me to share- there are many places we can find hurricane blogs that will show the horrors of this thing.
But Katrina has already had a dramatic effect on the nation. The Big Easy is a hugely important shipping city for many goods and industries, and the condition of the ports may well be wildly damaged. But you need look no futher than the Gulf Coast Oil Rigs to see how incredible an indirect impact the hurricaine will have on us all:
U.S. energy companies said U.S. Gulf of Mexico crude oil output was cut by more than one-third on Saturday as Hurricane Katrina appeared poised to charge through central production areas toward New Orleans.Half a Million barrels. What can that do to the oil market? Well, it can spike already-elevated prices to more record-breaking levels instantly, raising prices above $70.oo/ barrel. Bush has even considered the pinch that this one hurricaine event produces in America's oil needs significant enough to tap into the strategic oil reserves. This is not insignificant.
The Gulf of Mexico is home to roughly a quarter of U.S. domestic oil and gas output, with a capacity to produce about 1.5 million barrels per day of crude and 12.3 billion cubic feet per day of gas.
As of Saturday, 563,000 barrels daily crude output had been shut in due to the threatening storm.
The twist is here: The US has reached its current capacity for refining crude oil and has sustained it through several years. The oil fields across the world, including OPEC countries, continue to vow to increase production, but it's questionable whether they even can. Tapping something as insignificant as the Alaskan Wildlife Reserves, where there will be no oil benefit or relief for 20 years and the production will barely make an impact anyway, is meaningless. What we have to understand is that our oil consumption is what's absurd here, not the natural world which affects our oil.
One way we can think about Katrina is to consider what happens when Katrina II, followed by Andrew II, sweep through the Gulf; what happens when these events destroy our remaining Gulf oil rigs and coastal refineries, currently responsible for up to 20% of domestic oil production, after the Peak Oil moment occurs, in 5, 10, 15 years? What happens when the hurricane crushes our energy supply and we don't have way to avoid the crippling effect then?
posted by General Stan at 10:01 AM
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