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Eric Gay/AP
Sabine Pass, Texas

The Toll of Hurricane Ike

September 14, 2008 03:00 PM
by findingDulcinea Staff
Millions of Texas residents are without power following Hurricane Ike, and it could be weeks before the state’s energy infrastructure is repaired. The damage will have ramifications for the oil industry.
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According to Al Jazeera, Hurricane Ike is responsible for “the biggest disruption to US energy supplies in at least three years,” and has already raised the domestic price of petroleum.

Of Texas’s 14 oil refineries, eight ceased production operations in anticipation of Ike to prevent significant damage. These closures, on top of those caused by Hurricane Gustav last week, represent a loss of about 20 percent of the United States’s oil production capacity. The supply shortage had palpable effects in Texas, and further afield in Tennessee and North Carolina, where some stations’ supplies dried up and others raised prices to over $5 a gallon—a practiced criticized by some as “gouging.”

President Bush issued a statement saying that the Department of Energy and the Federal Trade Commission will be monitoring gasoline prices to ensure that consumers are charged a fair price. Price gouging became an issue in the aftermath of Hurricane Katrina.

Nationwide the average price of oil increased from $3.68 on Friday to $3.73 on Saturday.

According to the Los Angeles Times, “Fixing the region’s widespread power outages will probably be the biggest factor in determining how quickly refineries and pipelines return to normal operations.”

A spokeswoman for the Electric Reliability Council of Texas said that “two-thirds of the electricity transmission used by Houston-based CenterPoint Energy customers went down.” Eight of the 345-kilovolt lines, which are the largest on the grid, were damaged.

In southeast Texas, 3 million residents lost power when Ike struck land. Terry Hadley of the Texas Public Utility Commission said the primary factor for returning power to area residents is the repair of “major transmission lines,” the central arteries of the grid.

Beaumont, Texas was particularly hard hit, and some authorities say it could be more than a month before power is back.

According to The Associated Press, the resumption of oil production is not the only thing hinging on the restoration of electricity; it won’t be until power is back that many evacuees will return home.
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