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The U.S. Energy Information Administration on Thursday said Hurricane Isaac caused “considerable disruption” but little damage to natural gas processing plants along the U.S. Gulf of Mexico coast when the storm came ashore three weeks ago.

The EIA in its Today in Energy report said it invoked an emergency-activation survey to collect daily data on the status of plant operations in the affected area after Isaac came ashore on Aug. 28.

Despite the disruption as well as shut-in offshore gas production, there were few reports of damage to energy infrastructure from the low-level Category 1 hurricane.

There was also little effect on natural gas prices due to ample onshore production and surplus storage, the EIA said.

The last time the EIA invoked the activation survey, Form EIA-757B, was for Hurricane Ike in September and October 2008.

Isaac disrupted natural gas processing operations for more than 10 of the 13.5 billion cubic feet per day of total processing capacity in the area. On Sept. 7, a chart showed shut-in processing capacity was less than 4 bcf per day.

The survey captured plants with capacities greater than 100 million cubic feet per day.

Prior to Isaac making landfall, there were 25 natural gas processing plants in the affected area that were not undergoing maintenance, accounting for 12.6 bcf per day of available processing capacity.

Widespread power outages affecting nearly 1 million customers in Louisiana following the storm reduced the need for gas supplies, while the potential for flooding reduced or curtailed operations at many of the plants.

Plants most commonly attributed closures to a lack of upstream supply, although a few also cited damage to downstream infrastructure that would receive their dry gas or their natural gas liquids products, the EIA said.

Processing facilities purify and “dry out” raw natural gas from producing wells. This process results in pipeline-quality natural gas for delivery to end-users and a mix of natural gas liquids products to be separated by fractionators.

The Department of Interior’s Bureau of Safety and Environmental Enforcement’s final update on Isaac was released on Tuesday. The report showed that less than 5 percent, or 213 million cubic feet, of Gulf of Mexico gas production remained shut in.

At the height of the outages in late August, the storm had shut more than 70 percent, or more than 3.26 billion cubic feet, of daily offshore gas production.

The U.S. Gulf of Mexico has accounted for a progressively smaller share of U.S. gas production in recent years due to steadily declining offshore production volumes in the Gulf and the prolific growth of shale gas production in various onshore basins.

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Hurricane Isaac shuttered more than three-quarters of the natural gas production in the Gulf of Mexico as it spun toward the Louisiana coast late last month, closures that would have quickly prompted a spike in commodity prices just five years ago.

This time around, however, the natural gas market barely hiccupped as Isaac made landfall Aug. 28, underscoring the Gulf’s diminishing role as a major source of natural gas and likely anemic natural gas investment there for the foreseeable future.

Isaac forced the closure of 72.52 percent of total natural gas production at the height of the shut-ins Aug. 30, the equivalent of about 3.4 billion cubic feet of natural gas per day, according to U.S. government data.

Natural gas futures prices stayed fairly flat in the wake of the Category 1 storm, increasing 5.5 percent to $2.79 when markets closed Aug. 31. Prices made a 13 percent jump when Hurricane Katrina made landfall as a Category 3 storm in 2005.

Richard Hastings, a senior economist with New Orleans investment banking firm Global Hunter Securities, said the muted reaction highlights years of slowing production in the Gulf of Mexico as shale gas exploration onshore has rapidly expanded. The Gulf’s total natural gas withdrawal was down 48 percent to 4 billion cubic feet per day in June.

“The Gulf of Mexico is still very rich in natural gas but not as material in terms of production now,” Hastings said. “If you take a look onshore at production in nearby Texas, you’ve got 22 billion cubic feet per day in production. That absolutely overwhelms, by a matter of magnitude, what is cranking out of the Gulf,” Hastings said.

The decline in Gulf production has long been linked to the rise of diverse shale gas formations across the U.S., particularly in areas of Texas and Pennsylvania.

The federal offshore Gulf of Mexico accounted for 6 percent of the U.S. natural gas produced in June, down from about 20 percent in June 2005, according to the U.S. Energy Information Administration.

In comparison, shale gas accounts for nearly a third of the natural gas produced, and the EIA predicts its portion will grow to nearly half of U.S. production by 2035.

Steve Piper, a senior energy analyst with SNL Financial in Arlington, Va., said Hurricane Isaac hit at time when natural gas prices were weighed down by overwhelming supply and slackening demand for the energy source in light of the recession and, more recently, warmer winter weather.

Though natural gas prices have climbed back from $1.90 low in April, the U.S. has more than 3.4 trillion cubic feet of natural gas in underground storage waiting to be used. That’s up from 1.7 trillion in late April.

“We have this big mismatch now, and it’s an ongoing mismatch between supply and demand,” Piper said, adding that the natural gas market will likely be insulated from climbing prices for months, if not years, to come.

That forecast has prompted oil and gas companies to scale back investment in Gulf natural gas exploration and production.

The bulk of New Orleans-based EPL Oil & Gas Inc. exploration and production activity was in natural gas plays in the western Gulf when it emerged from Chapter 11 bankruptcy in 2009.

“While that can hit some home runs in terms of massive gas finds, it’s a riskier business and unfortunately it did not work,” chief financial officer T.J. Thom said.

EPL shifted investment to a number of oil-rich properties it owned in the central Gulf it. Now about 80 percent of the company’s production portfolio is oil. Thom said the company has a good inventory of offshore natural gas projects on the sidelines, but the company needs to see at least a $2 increase in the commodity price to consider moving forward.

“We have plenty of gas we can drill,” she said. “We just choose not to drill it now.”

Hastings said the Gulf’s importance will face increased pressure as production pipelines and other natural gas infrastructure connect newer shale plays to heavy users in metro areas along the East Coast.

Piper said the Gulf’s years of declining production could turn around with higher prices, though he expects niche independent oil and gas companies will lead investment rather than major oil and gas companies, most of which are pouring resources into shale plays.

“Ultimately these things are going to come back,” Piper said. “Cash is king. They just need to see their cash registers ticking again.”

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Energy companies in the U.S. Gulf of Mexico have brought back nearly all of the region’s offshore oil and gas production capacity in the wake of Hurricane Isaac.

Some 4% of the Gulf’s oil production and 5% of the region’s natural gas output remained offline, according to U.S. regulators, which noted that shut-in production has been somewhat slow to return because of damage to onshore processing facilities.

But economists and analysts said that Isaac’s impact on the economy is expected to be little more than a blip, especially compared with the havoc wrought by big hurricanes like Katrina and Rita in the last decade.

Analysts say oil companies usually take several days to ramp up energy production after evacuations because they need to restaff far-off facilities and check the integrity of well bores, pipeline connections and the safety of the platforms to make sure the storm didn’t cause any hidden damage.

Kyle Cooper, managing partner at Houston’s IAF Energy Advisors, said companies are being more cautious about their U.S. Gulf facilities in the wake of the 2010 Deepwater Horizon disaster. “I’ve been told the inspection process is much more rigorous and much longer,” he said.

The methodical process of bringing production back online hasn’t had much impact on energy markets. At the height of the storm, Isaac pushed gasoline prices up between 10 and 15 cents, with the bulk of the impact felt in the U.S. Gulf region, said Chris Lafakis, senior economist at Moody’s Analytics.

But the storm is likely no longer a factor in markets for refined products like gasoline and heating oil, he said.

Gene McGillian, an analyst and broker at Tradition Energy, said refineries were slower to restart than some might have expected. But markets are more concerned now with whether the Federal Reserve will decide to pour more money into the economy through a fresh round of bond-buying, or quantitative easing, than with Isaac’s lingering impact.

Mr. Lafakis said Isaac didn’t cause the same kind of infrastructure damage that cut into economic growth as storms such as Hurricanes Katrina and Rita in 2005, or Hurricane Gustav in 2008.

“I think all those storms were more damaging from an economic perspective. Those storms also produced more lasting damage in terms of energy prices and energy production,” he said.

In all, IHS Global Insight estimates that Isaac is responsible for an estimated 13 million barrels of lost oil production and 28 billion cubic feet of lost gas production—together worth about $1.57 billion.

“In terms of real GDP growth this production loss would knock at most 0.16 percentage point off annualized real GDP growth,” said IHS economist Gregory Draco. “It’s a relatively small impact,” he said.

Dozens of platforms and processing facilities were damaged by Hurricanes Katrina and Rita and remained evacuated for months after the storm. For example, in December of 2005, three months after Rita made landfall, 26.2% of oil production and 19.4% of natural gas production remained shut in.

By comparison, all but two of the 596 production platforms operating in the U.S. Gulf and all but one of the 76 rigs there have been restaffed since evacuating before Isaac.

While Katrina left an estimated $120 billion in infrastructure damage in its wake, Isaac is so far estimated to have caused about $1.5 to $3 billion in insured losses, with total losses likely about three or four times that amount, Mr. Draco said.

One reason for that is that Isaac, which made landfall as a Category 1 Hurricane and quickly weakened into a tropical storm, lacked the high wind speeds that caused damage in the past.

“It was a fairly large storm in terms of expanse but didn’t pack a ton of power like previous hurricanes,” RBC Capital Markets analyst Leo Mariani said.

The BSEE said shut-in production comes to about 57,439 barrels of oil a day and 213 million cubic feet a day of natural gas.

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The U.S. government said nearly 8 percent of the daily oil production and around 6 percent of natural gas production in the Gulf of Mexico remains shut-in.

Energy companies in the Gulf of Mexico and along the southern U.S. coast shuttered facilities ahead of Hurricane Isaac, which struck the region as a Category 1 storm in late August.

The U.S. Interior Department’s Bureau of Safety and Environmental Enforcement said personnel are yet to return to two of the 596 manned production platforms in the Gulf of Mexico. One rig of 76 remains unmanned.

The BSEE estimates that 7.98 percent, or around 110,000 barrels of oil per day, of the usual daily oil production is shut-in. In terms of natural gas, about 6.11 percent, or 274 million cubic feet, of the daily natural gas production is idled.

“The remaining shut-in oil and gas production has been slow to return due to damage at onshore processing facilities,” the agency stated.

The BSEE said oil and natural gas operators with installations in the region have submitted reports of mainly minor damage from Isaac.

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The price of oil slipped Tuesday after a weak report on U.S. manufacturing suggested demand for oil would fall.

U.S. benchmark crude fell $1.17 to close at $95.30 in New York. Brent crude, which is used by many U.S. refineries to make gasoline, fell $1.60 to $114.18 in London.

The Institute for Supply Management said Tuesday its index of U.S. factory activity fell for the third straight month, suggesting more weakness in the U.S. economy. When economic growth slows, drivers, shippers and travelers use less gasoline, diesel and jet fuel.

Meanwhile, oil production in the Gulf of Mexico is ramping up after Hurricane Isaac, erasing fears that the storm would impact supplies for an extended period and send prices up. The Bureau of Safety and Environmental Enforcement said Tuesday only 3.5 percent of the Gulf of Mexico oil platforms remain evacuated. Production ramped up by about 100,000 barrels per day between Tuesday and Wednesday and is now 710,000 barrels per day below normal. At the height of the storm, 1.3 million barrels per day of production was halted.

Oil might have fallen further Tuesday, analysts said, but traders are expecting stimulus programs will soon be announced in Europe, the U.S. and China that could free up cash for oil purchases and boost economic growth worldwide.

“There are a lot of crosscurrents,” said Andrew Lebow, an analyst at Jefferies Bache.

The European Central Bank President Mario Draghi is expected to reveal a program Thursday aimed at easing borrowing costs. Last week Federal Reserve Chairman Ben Bernanke suggested the Fed could do the same. A weak manufacturing report in China raised speculation that the Chinese government would also announce stimulus measures.

These programs reduce interest rates and free up cash for investors. They are then likely to use some of that money to invest in oil and other commodities, pushing prices higher.

Phil Flynn of Price Futures Group suggested hopes for stimulus could already be priced into the oil market, however.

“Last week we were intoxicated by stimulus,” he said. “The market now may want to see more than talk. It may want to see some action.”

Gasoline prices also fell — slightly. The national average retail price of gasoline slipped less than a penny to $3.82 per gallon.

Bigger declines could be on the way, though. Analysts expect gasoline prices to fall in the coming weeks as the refineries return to full strength, the summer driving season ends, and refiners switch to cheaper winter gasoline blends.

Phillips 66 said Tuesday that power had been restored to its 247,000-barrel per day refinery in Belle Chasse, La. that had been shut down in anticipation of the storm and then flooded by Isaac’s heavy rains. The company said it will be “a couple of weeks” before the refinery is running at normal rates. But now all of the refineries that were shut or slowed are in the process of ramping back up, according to the Energy Department.

Gas could stay relatively high, though, if economic stimulus measures keep the price of crude elevated. Retail gasoline prices are higher than ever for this time of year.

In other futures trading in New York:

— Natural gas rose 5 cents, or 1.8 percent, to close at $2.85 per thousand cubic feet.

— Wholesale gasoline fell 2 cents to close at $2.95 per gallon.

— Heating oil fell 3 cents to close at $3.15 per gallon.

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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 have 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 offline, 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 re-start when power was restored. On Monday, the company said there was no update to the refinery’s status.

The national average price of gasoline rose 11 cents last week as Isaac threatened the Gulf Coast and then swept ashore with high winds and flooding rains. But by Friday the price had leveled off to just under $3.83 per gallon. Monday, the average price declined — barely — by 0.2 cents, to $3.827 per gallon, according to the Oil Price Information Service, AAA and Wright Express.

That’s the highest ever price for gasoline for Labor Day, though it is 11 cents below this year’s high of $3.94 per gallon, set April 6.

Analysts say that gasoline prices should drift lower in the coming weeks as Gulf coast refineries ramp back up, the summer driving season ends and refiners switch to cheaper winter blends of gasoline.

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 re-starting 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 re-opened, 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.

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Hurricane Isaac could have been worse at this hub for boats, rigs and manpower that serve most of the Gulf of Mexico’s oilfield.

The port shut down Monday as a mandatory evacuation was ordered in advance of the storm. Isaac dealt a direct hit to the port early Wednesday, but the facility reopened two days later, emerging with what officials describe as minor damage.

Electricity was still out Sunday, but Director Chett Chiasson said the docks, supply yards and other facilities buzzed with activity.

“Our biggest concern was the possibility of channel restrictions and damages to facilities where we would not be able to operate efficiently,” he said, “but that doesn’t seem to have happened.”

Getting the port running was key to allow Gulf oil production to continue, he said.

As Isaac hit, the Federal Bureau of Safety and Environmental Enforcement estimated that 509 of the 596 oil-production platforms and 50 of the 76 drilling rigs the Gulf had been evacuated. By Sunday, workers remain evacuated from 131 platforms, 22 percent, and 18 rigs, 23 percent. About 71 percent of Gulf oil production and 55 percent of natural-gas production remained halted Sunday.

Through the weekend, massive oceangoing vessels could be seen navigating the port’s channels as gulf oil production resumes.

The port serves as a staging area for half the drilling rigs in the Gulf and production of about 20 percent of the nation’s oil supply, Chiasson said. Supplies, equipment and rig infrastructure are typically brought into the port by truck along La. 1 then loaded onto towering vessels before being transported to the Gulf.

Wind damage was minimal, he said. About a dozen power poles were down this weekend, and work was being powered by generators.

Chiasson said he expects power to be restored sometime early this week. Entergy crews have been moving steadily but had not restored power 20 miles to the north in Golden Meadow as of midday Sunday.

The port did receive some damage from Isaac’s nearly 100 mph winds. Some offices had roof damage, the massive, airplane hanger-like structures where ships are loaded received mostly cosmetic damage, Chiasson said.

But advocates for more federal money to upgrade La. 1, the only land route to and from the port, say Isaac — as hurricanes past — renews concern about the crippling effects a lengthy closure of the road could cause to the nation’s energy supply and economy.

La. 1 Coalition Executive Director Henri Boulet noted that 7.1-mile section of highway between Golden Meadow and Leeville was closed 78 hours as Isaac’s storm surge overtopped it. Last year, a 61-hour closure due to flooding from Tropical Storm Lee also shut down traffic to and from the port.

Sea-level rise, coastal erosion and storms have threatened the road for decades, and one section south of the port remains closed to traffic at night while workers repair Isaac’s damage.

Boulet cited a July 2011 study by the U.S. Department of Homeland Security that concludes a 90-day closure of Port Fourchon because of damage to La. 1 could result in a $7.8 billion economic loss nationwide. Domestic oil-and-gas production would also be significantly impacted for 10 years, he said.

“What other 7.1-mile stretch of highway in the nation poses a $7.8 billion vulnerability to national gross domestic product if it is washed out?” Boulet said in a news release. “None.”

Boulet said Isaac again illustrates why Congress should spend the estimated $320 to upgrade the stretch of road to an elevated expressway, money the La. 1 Coalition and others have sought for years.

Chiasson said the port area saw about 7 feet in storm surge, but because the facility sits at a higher elevation than surrounding areas, it sustained only minimal water damage.

The port reinforced many of its aging facilities following 2008’s hurricanes Gustav and Ike, which paid off as workers were able to reopen facilities shortly after Isaac passed.

The port’s northern expansion project received no damage, while the local Caminada Headlands area saw a loss of about 30 yards of beach, he said.

“It’s great to be back open,” he said. “Our mission, when these storms come in, is always to be closed for as short an amount of time as possible. We strive to do that and were very fortunate.”

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Tropical Storm Isaac’s threat to offshore energy production in the Gulf of Mexico eased as the weather system weakened while still dumping rain and producing storm surges over Louisiana. Forecasters expect it to become a tropical depression later today.

Crude prices fell for a second day in New York after Isaac’s landfall reduced concern that the storm would damage platforms and rigs in the Gulf. Isaac has halted 95 percent of U.S. oil production in the Gulf and 72 percent of natural-gas output, the Bureau of Safety and Environmental Enforcement said. Six Louisiana refineries were shut, idling at least 6.7 percent of national capacity, according to data compiled by Bloomberg.

“Even though Isaac is no longer a hurricane, life- threatening hazards from storm surge, inland flooding and tornadoes are still occurring,” the National Hurricane Center said early today.

Isaac, which pounding the New Orleans area on the seventh anniversary of Hurricane Katrina, was about 125 miles (201 kilometers) northwest of Louisiana’s largest city as of 7 a.m. local tome with top winds of 45 miles per hour, down from 80 mph at landfall, the NHC said in an advisory. The system was moving northwest at 8 mph.

The center of the storm is forecast to continue to move over Louisiana today, pass through Arkansas tomorrow before continuing inland to southern Missouri later tomorrow.

Crude for October delivery declined 0.3 cents to $95.46 a barrel on the New York Mercantile Exchange as of 7:52 a.m. before the floor opened.

Gulf Energy

The Gulf region is home to 23 percent of U.S. oil output, 7 percent of natural gas and 44 percent of refining capacity.

“In the oil-rig areas, the conditions there aren’t going to let up until Friday,” said Jeff Masters, co-founder of Weather Underground in Ann Arbor, Michigan. “The winds over the water are going to be stronger than over the land. They are just going to have to wait. It’s going to be a patience game with this storm.”

Enbridge Inc. (ENB) declared force majeure on the Manta Ray and Garden Banks offshore gas pipeline systems because of Isaac, according to a notice on the company’s website.

The Louisiana Offshore Oil Port suspended all operations from its offshore terminal and onshore storage, Barb Hestermann, a spokeswoman for the company, said in a message posted on its website. The port’s main Clovelly terminal near Galliano, Louisiana, lost power and was preparing backup generators to allow to partial operations once storm conditions improve, the company said.

Refinery Impact

Refiners in the area will probably sustain little damage from the storm, said Jim Rouiller, senior energy meteorologist at Planalytics Inc. in Berwyn, Pennsylvania.

“It’s likely that the remainder of the energy-production infrastructure across the northern Gulf will have little in the way of damage from Isaac and should be up and running by Friday,” Rouiller said.

Isaac unleashed a storm surge into southern Louisiana and Mississippi that is raising sea levels to 10 feet (3 meters) above normal. The rising water pushed over the top of a levee in Plaquemines Parish.

Seven to 14 inches of rain may fall, and some areas may receive 25 inches, the hurricane center said.

“It’s moving very slowly, it’s just drifting about the south Louisiana coastline, so they’re just going to get pounded with wind and rain for quite some time now,” said Dan Pydynowski, a meteorologist at AccuWeather Inc. in State College, Pennsylvania.

Threat Lingers

Pydynowski said that since the storm is lingering near the coast, it will take some time to weaken. The swampy land of southern Louisiana is full of warm water that can fuel the system, he said.

All hurricane warnings and watches were dropped when Isaac was downgraded. A tropical storm warning is in effect from Cameron, Louisiana, to the Mississippi-Alabama border.

Hurricane Katrina stuck New Orleans and the Gulf Coast on Aug. 29, 2005, swamping the city’s levees and killing more than 1,800 people.

Tropical Storm Kirk, the 11th named Atlantic weather system this year, was 1,065 miles northeast of the northern Leeward Islands and no threat to land, the hurricane center said in a separate advisory. It had maximum sustained winds of 65 mph and is moving northwest at 10 mph. Kirk could become a hurricane later today or tomorrow, the center said.

Forecasters are also tracking an area of low pressure west of the Cape Verde islands, in the eastern Atlantic Ocean, that has a 90 percent chance of becoming a tropical system within two days.

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