After the Storm: A Look at Post-Hurricane Refinery Operations

Did refineries learn anything from 2005 hurricanes Rita and Katrina?

The areas hit by 2005’s Rita and Katrina and 2008’s Ike and Gustav are responsible for almost half of the refining capacity for the United States. Both storm seasons resulted in refinery and offshore rig damage, unscheduled shut-downs and gasoline shortages. Although 2008’s Gustav and Ike caused less damage than the 2005 storms, the refineries were better prepared in 2008 from what they had learned in 2005.

Looking back to 2005’s hurricanes Rita and Katrina, it was many months before the refineries in the region were up and running again. Last year’s Ike and Gustav did not cause as much damage to the refineries, and most were back up and running within 2-3 weeks of the hurricanes, though not to full production. By late November of last year production was up to pre-Hurricane Ike levels.

Gasoline inventories plunged considerably after both hurricane seasons as supplies were drained to meet demand. Gasoline levels were actually lower in 2008 than after the 2005 hurricane season, partly because many companies shut down operations at their refineries in advance of Ike’s approach.

There was not the same increase in retail gasoline prices in 2008 as there was in 2005 mainly because the corporations learned from 2005 how to better manage supplies during these times. Retail gasoline prices were already on the decline from their elevated prices in the summer, which also helped to curb skyrocketing gasoline prices.

After Katrina there were changes to the regulations of offshore oil rigs including strengthening older rigs, mooring the rigs with 12-16 cables rather than 8, as well as building new rigs higher out of the water. These changes made for stronger offshore platforms when the 2008 storms hit.

New regulations and weaker storms created less damage in the 2008 storm season, but better prepared refineries were the reason operations resumed so quickly after Gustav and Ike.

> The full story