By Don G. Briggs, President – LOGA (Louisiana Oil & Gas Association)

Monday, September 1st, Hurricane Gustav cut a path through the heart of the Gulf of Mexico’s oil and gas fields in route to North Louisiana, causing the greatest power outage in the state’s history. Seventy percent of Louisiana’s electric consumers were left without power after landfall. Gustav, and past hurricanes serve as a reminder to the US just how vital Louisiana’s petroleum industry is to our country.

As early as Wednesday, August 27th, four days before landfall, companies operating in the Gulf of Mexico began shutting in production and evacuating their offshore operations. The US Mineral Management reported Gustav shut in 100% of the 1.3 million b/d of the Gulf’s oil production and 95% of the Gulf’s natural gas production, 7 bcfd. Natural gas pipelines and 31 large natural gas processing plants, representing over 16 billion cubic feet per day, shut down operations as well.

Also, in the path of Gustav is Louisiana’s Offshore Oil Port (LOOP). LOOP is of major importance to the US oil supply handling about 1.2 mbd in oil imports and supplying over a third of the nation’s refineries. Prior to Gustav’s landfall, fourteen of Louisiana’s Gulf Coast refineries shut down their operations which is approximately 2.7 million b/d of refined fuel, 15% of the US refining capacity. Ten other Gulf Coast refineries trimmed their production.

Louisiana’s main offshore port providing operations for the central Gulf of Mexico is located in Port Fourchon, and was dead center in Gustav’s path. Based on an economic report completed in April – “A direct hit from Gustav could have caused a significant work stoppage resulting in billions of dollars in economic losses…” – The Daily Comet. Port Fourchon is the main service port for LOOP and the offshore industry, and is vital to the US oil supply. As of this past Thursday Port Fourchon was up and running, but not near full capacity. “This isn’t our first rodeo,” Port Fourchon Police Chief Jon Callais said. “We’ve been through Andrew, Katrina and now Gustav. This is what we do.”

One of the biggest challenges Gustav brought to Louisiana’s petroleum industry is power outages. Gustav caused the most severe power outage the state has ever seen, even knocking out power for the State Capital, Louisiana’s most secure building. Returning Louisiana’s Gulf of Mexico oil production, natural gas processing plants, pipelines, LOOP, Port Fourchon and refining capacity back to normal conditions is not done by a flick of a switch, but they do require electric power.

Without electric power, refineries cannot start up. Assume the refinery has electric power, if LOOP has no power it cannot transport imported crude to the refinery, and the reverse is true, LOOP can have power and the refinery no power, the refinery cannot receive product. The same applies to Gulf of Mexico oil and natural gas production. All the parts of the complex petroleum puzzle must be in place to provide a finished product to a thirsty country.

Gustav was not a Katrina or Rita in relation to damage inflected to the industries’ infrastructure. Both Katrina and Rita were much stronger hurricanes during their time in the Gulf of Mexico. As well, new industry standards and preparation for the rebuilt infrastructure is a testimony to damaged caused by Mr. Gustav. All eyes on IKE.