Gulf Refineries Brace for Hurricane Ike’s Landfall Near Houston

Fuel Prices Rising as Huge Storm Approaches Coast
Frank Polich/Bloomberg News

Oil refineries on the Gulf Coast in Texas and Louisiana shut down operations Friday as Hurricane Ike prepared to come ashore overnight near Houston in what could be the biggest hurricane to hit Texas in 50 years, news services reported.

Gasoline wholesale prices and crude oil futures rose Friday in anticipation of the storm, after oil closed Thursday at a six-month low of $100.87 a barrel on the New York Mercantile Exchange, Bloomberg reported. Crude rose 21 cents Friday to close at $101.08.

Ike, a Category 2 hurricane on Friday, was scheduled to make landfall near Galveston, Texas, early Saturday with winds in excess of 100 mph as a Category 2 or 3 system, news reports said.

Its path was further south and west of Hurricane Rita, which came ashore as a Category 3 hurricane on Sept. 24, 2005, near the Texas-Louisiana border, causing extensive damage to regional refineries and sending diesel and gasoline prices soaring to then-record highs.

Sustained winds in excess of 110 miles per hour would make Ike a Category 3, but regardless of its level, forecasters said the 800-mile-wide storm would bring a huge storm surge to Galveston and Houston areas, home to many refineries and petrochemical plants.

Gulf Coast refineries represent 23% of domestic oil-processing capacity, and about 19% of U.S. refining capacity was being shut down in anticipation of Ike’s landfall, Bloomberg reported.

The Louisiana Offshore Oil Port, the biggest U.S. oil- import terminal, closed its marine operations as did Port Fourchon, a major intake facility for Gulf oil, Bloomberg said.

Energy producers in the Gulf idled about 97% of oil production and 93% of natural-gas output, Bloomberg reported.