13 of 26 Texas refineries, producing about 3.6 million barrels of fuel a day, are shut down as they brace for Hurricane Ike's impact.
Nearly a quarter of U.S. fuel production had been shut down due to the approach of Hurricane Ike, according to a government assessment released Friday.
By 10:00 A.M. ET, 13 of the 26 Texas refineries, representing a production capacity of 3.6 million barrels of fuel a day, had been shut down, the Energy Department said.
Texas accounts for more than a quarter of the nation's total capacity to produce gasoline and other petroleum fuels. In normal operation, facilities there can produce up to 4.8 million barrels a day, according to the government.
Most of the Texas refineries are located along the ports of Houston, Port Arthur, and Corpus Christi, where Ike is scheduled to make landfall Friday night or Saturday.
Refining facilities on land are more vulnerable to flooding and power outages than offshore facilities, according to Ray Carbone, president of oil trading company Paramount Options.
"Without power, no refineries will be working and the flooding could complicate how long it takes them to come back online," said Carbone.
"Close to 20% of the U.S. refining capability could be lost for a long period of time," wrote Jim Rouiller, Senior Energy Meteorologist at Planalytics in an email. "Major and long term damage likely at the major refining cities from Galveston and Texas City northward to Baytown," he wrote.
After Katrina, some refineries were shut down for 6 to 9 months, according to Tom Kloza, chief oil analyst for Oil Price Information Service.
All Texas ports from Freeport west to Louisiana were closed Friday as well, according to the Energy Department.
Much of the nation's Gulf infrastructure had already been shut down or operating at minimal capacity due to Hurricane Gustav, which struck over Labor Day weekend.
However refineries in Louisiana that had been shut down due to the previous storm were in the process of re-starting or were already operating, the Energy Department said.
The refinery shutdowns drove up gas prices in the region.
Gas prices edged up nationwide by a fraction of a cent on Friday, to an average of $3.675 per gallon from $3.671 the prior day, according to the motorist group AAA. But in Houston, the increase was more dramatic, with the average gas price jumping more than 4 cents to $3.496.
Pipelines: All of the major crude and natural gas pipelines flowing out of the region had been completely or partially shut, the report said. The approach of Ike has caused many pipelines to declare "force majeure," which frees them from delivery obligations in case the worst happens.
The 20 of the 38 natural gas pipelines in Ike's path were confirmed shut down by the Energy Department at 12:00 p.m. ET, reducing capacity by 10.5 billion cubic feet per day. The shutdowns include facilities already in stand-by mode as a result of Hurricane Gustav.
The government also shut down Strategic Petroleum Reserve sites at Bryan Mound and Big Hill, Texas, and West Hackberry, La.
Offshore rigs: Evacuations also continued from oil rigs and platforms in the Gulf of Mexico, and from parts of coastal Texas, including Galveston and parts of Houston.
In the most recent figures available, the Minerals Management Service reported on Thursday that 562, or more than 78%, of the 717 manned production platforms in the Gulf had been evacuated, along with 93 of the 121 rigs.
But the real-time figure is likely higher, as all companies in the Gulf reported on Thursday that evacuations were either underway or completed. Many of the facilities were in the process of being restarted after Hurricane Gustav.
Some companies, such as BP (BP) and Chevron (CVX, Fortune 500), reported on Thursday that all evacuations of offshore facilities had been completed.
Chevron spokesman Mickey Driver said all 3,000 employees and contractors had been pulled out of the Gulf, where the company operates about 700 production facilities, including 400 manned platforms. It was still operating some unmanned facilities remotely.
ConocoPhillips (COP, Fortune 500) on Thursday had pulled all workers from its offshore Magnolia platform.
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