Gas Prices, Gustav and the Future of Offshore Drilling
An August 29th article on Science Daily explains how hurricane’s Katrina and Rita can give us insight into some offshore drilling issues should Gustav cause damage in the Gulf of Mexico. The findings of Dr. Satish Nagarajaiah, Rice University professor, studied the damage to offshore drilling platforms following the 2005 hurricanes Katrina and Rita. As the offshore drilling debate persists and Gustav travels through the Gulf of Mexico this weekend Dr. Nagarajaiah’s findings provide important information to consider as we watch the prices at the pump in the aftermath of Gustav.
Both Katrina and Rita were category 5 hurricanes and each one caused damage to an estimated 3,000 oil platforms and 22,000 miles of pipelines in the Gulf of Mexico. The following damage is recorded:
- 52 platforms with major damage
- 19 of the floating drill units exposed to hurricane force winds went adrift or were damaged
- 115 platforms destroyed
- Eight rigs destroyed
- 535 pipeline segments damaged
Dr. Nagarajaiah explains that the rigs and platforms may have ongoing damage due to past storms, making them more susceptible to current and future storm surge and wind damage. If and when damage occurs to these platforms, equipment and pipelines the potential for more increases at the pump becomes greater and greater. This Science Daily article states:
When Katrina and Rita struck, gas prices soared as a result of damage to oil facilities. With oil prices at all-time highs this year, U.S. oil production in the Gulf of Mexico has a direct impact on gasoline prices.
Hurricane Gustave is currently in the Gulf of Mexico. Oil platforms began evacuations on Wednesday, interrupting production and causing crude oil prices to rise already. Storm Exchange lead energy analyst, Lynda Clemmons, explains:
“Crude and natural gas prices fluctuate with each weather update that comes out, leading to an enormous amount of volatility and general upward pressure on prices,” said Clemmons. “Nobody wants to miss out on these trading opportunities. Except for the smallest of trading houses or funds, most banks, energy companies, and utilities have business continuity plans that kick in depending on the threat level of the impending storm.”
How will Gustav hurt those who support pursuing more offshore drilling? Hurricane seasons from 2004 to present have been unquestionably devastating. The cost effectiveness of offshore drilling will come into question on the heels of Gustav. As a proponent of obtaining American oil, this does cause me to take into consideration the volatile situation at hand and how this directly affects U.S. oil production and prices on an ongoing basis.
Related Posts:
- Expand Offshore Drilling? Three Words for you Katrina, Rita, Gustav
- Should Oil Executives Be Blamed for Current Gasoline and Natural Gas Prices?
- Why High Gas Prices can be Good for the Environment
Photo Credit: CoreBurn via Flickr Creative Commons License
