(Updates with storm’s progress in second paragraph. Run BMAP 95086 <GO> for Gulf of Mexico energy platforms.)
Sept. 3 (Bloomberg) -- Tropical Storm Lee strengthened in the Gulf of Mexico as it moved north toward Louisiana’s coast, shutting as much as half the oil production in the Gulf of Mexico and a third of natural gas output.
Lee is about 15 miles (24 kilometers) south-southeast of Intracoastal City, Louisiana, heading north-northwest at 7 miles per hour and “producing heavy rains” over the south of the state, the National Hurricane Center said in an advisory before 8 a.m. East Coast time. The storm’s maximum sustained winds strengthened to 60 mph with “some slight” strengthening possible before it makes landfall, according to the Miami-based center’s forecast.
“This will be an extensive, slow-moving system, capable of affecting the same area for days with downpours, stormy seas and rough surf conditions,” said Alex Sosnowski, an AccuWeather Inc. meteorologist, on the State College, Pennsylvania-based forecaster’s website. “Considering potential for damage, impact to the petroleum industry and commerce in the Gulf Coast region, the system could be the next billion-dollar disaster.”
Companies including Anadarko Petroleum Corp., BP Plc, Exxon Mobil Corp. and Noble Corp. evacuated workers from Gulf rigs and platforms. About 47.6 percent of Gulf oil production and 33 percent of natural gas output has been shut by the storm, according to the Bureau of Ocean Energy Management, Regulation and Enforcement.
The Gulf accounts for 27 percent of U.S. oil output and 6.5 percent of natural gas production. As much as 91 percent of gas and 98 percent of oil output in the Gulf may be shut in the next five days, according to Kinetic Analysis Corp., a Silver Spring, Maryland-based company that predicts the effects of disasters.
Oil and natural gas producers will be watching wind speeds and wave heights to determine whether and how long to shut operations, said Jan Vermeiren, chief executive officer of Kinetic Analysis. All production affected so far has been the result of precautionary measures, he said.
“Neither wind nor wave should cause much damage at this point,” Vermeiren said.
Jim Shugart, executive vice president for sales and marketing North America at ERA Helicopters LLC, said his company may return workers to rigs and platforms today.
“We’re going to start putting people back out if this weather doesn’t circle on us,” Shugart said in a telephone interview from Lake Charles, Louisiana. “In a situation like this, you start putting people back out the minute you can.”
Lee isn’t strong enough to cause any significant damage to energy assets at this point, said James Williams, an economist at WTRG Economics, an energy research firm in London, Arkansas.
“We’re not talking about Hurricane Gustav here, moving pipelines up and down Louisiana like it was spaghetti,” Williams said in a telephone interview. “This one isn’t a big story. It’s a wet story.” Gustav struck in 2008.
Ten to 15 inches (25 to 38 centimeters) of rain is expected to fall over southern Louisiana, Mississippi and Alabama, with as much as 20 inches in some areas, according to the hurricane center. The Florida Panhandle may see as much as eight inches of rain through tomorrow, the center said.
The center of Lee is expected to “cross the Louisiana coast this afternoon or tonight, then slowly cross southern Louisiana on Sunday,” the hurricane center said.
Mississippi Governor Haley Barbour declared a state of emergency in several counties expected to be hit with heavy rain and floods as Lee nears.
“Do not underestimate the impact of this system of tropical weather,” Barbour said in a statement on his website. “Make preparations now to protect your family and your property.”
Louisiana Governor Bobby Jindal declared a state of emergency, saying the storm threatens “extremely heavy, prolonged” rain over the state and may cause flash flooding and high tides.
A tropical storm warning was posted for the northern Gulf coast from the border of Alabama and Florida westward to Sabine Pass, Texas, including New Orleans.
Ten Louisiana parishes declared states of emergency, and officials urged voluntary evacuations in parts of Lafourche Parish and Grand Isle, Jindal told a news conference yesterday.
“Get ready for the wind and get ready for the rain,” Jindal said. “It’s coming, and it’s going to be here for a while.”
New Orleans Mayor Mitch Landrieu extended a state of emergency he declared earlier this week after a fire broke out in the eastern part of the city.
In the Atlantic, Katia regained hurricane status after a brief dip in strength. The storm was 530 miles east of the northern Leeward Islands, and moving toward the northwest at 10 mph with top winds of 75 mph, the center said an advisory before 5 a.m. today.
“Some slow strengthening is possible this weekend,” according to the center. Katia is the 11th named storm of the Atlantic hurricane season that runs from June through November.
It’s too soon to tell where Katia will go, although residents of the Bahamas and the U.S. East Coast “should not let their guard down just yet,” said Kristina Pydynowksi, a senior AccuWeather meteorologist.
--With assistance from Christian Schmollinger in Singapore; Sherry Su and Mike Harrison in London; Jim Polson, Aaron Clark, Christine Buurma and Paul Burkhardt in New York; Mario Parker in Chicago, Margot Habiby in Dallas and Dan Hart in Washington. Editors: Paul Gordon, Theo Mullen
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