Oil: A Bird's Eye View of Rita's Fury


By Suzanne LaFavers From Platts Oilgram News

Seeing is believing. The Coast Guard invited Platts on a reconnaissance helicopter this week to observe the damage from Hurricane Rita, which came onshore Sept. 24 as a Category 3 hurricane near the Texas/Louisiana border.

From this four-hour flight, two stark realities emerged: The recovery of energy and shipping infrastructure from Beaumont/Port Arthur to southeastern Louisiana will take a great deal of time, and the Houston/Galveston area dodged a bullet.

The flight left U.S. Coast Guard Air Station Houston at Ellington Field and headed east from the Houston area to the Port of Beaumont. Along the way, the damage to trees and houses seemed to increase as we got closer to Rita's actual path last weekend. Even in Galveston Bay, a warehouse at a container-ship dock suffered some roof damage due to Rita.

PRIVATE VESSELS SMASHED. The visible damage to electricity transmission lines also worsened as the helicopter continued east, a sign that bringing power back to these affected regions will take some time, slowing the recovery process for oil, gas, and petrochemical infrastructure in the Beaumont/Port Arthur area.

The overflight for the Port of Beaumont began near the town's center, where Rita damaged the roofs of houses and larger buildings downtown. Shipyard buildings for smaller vessels were torn open, with little but smashed wood left of these privately owned ships.

The 12.5-million-barrel Sunoco (SUN) storage terminal in nearby Nederland, Tex., appeared flooded at most of the tanks.When asked for a comment, a Sunoco spokesman referenced the company's Sept. 26 statement as the most recent update.

STORAGE UNITS FLOODED. Sunoco said then that power was out at its Nederland terminal and it did not know when operations would resume. The company also reported that all storage tanks and dock facilities were found intact in initial assessments, but 10 tanks "suffered some structural damage with varying impacts on capacity." The Nederland terminal lies on the Sabine-Neches waterway between Beaumont and Port Arthur.

The Coast Guard helicopter then flew several times around ExxonMobil's (XOM) 348,500-barrel-per-day Beaumont refinery, where Rita's storm surge and heavy rains flooded much of the refinery grounds and nearby storage units. The refinery flared black smoke from several towers, and other refinery infrastructure appeared downed by the storm.

UNREADY FOR POWER. ExxonMobil reported on Sept. 27 that it was performing assessments at the Beaumont refinery, with priorities including the restoration of water and electricity to run the facilities. "We expect these assessments to be completed later this week, at which time we will have a better understanding of the startup schedule," ExxonMobil said.

Entergy (ETR) noted on Sept. 28 that it will take another day before it can restore power to ExxonMobil's Beaumont refinery. Of the seven refineries knocked off line by Rita in Entergy's territory, only one is ready to accept power again, according to an Entergy spokeswoman.

As the helicopter headed down the Sabine Pass waterway to nearby Port Arthur, Rita's impact on the crucial waterway looked evident. Several barges sank along the Sabine Pass, and barges as well as other watercraft were forced onshore by Rita's winds. The Sabine and Neches river waterways have reopened, but with restrictions.

OBSTRUCTED WATERWAY. From an aerial view, Total's (TOT) 240,000-barrel-per-day Port Arthur refinery was flaring black smoke and inundated with some flooding. There did not appear to be any major structural damage to the refinery, but the storm had downed power lines in the immediate area.

Total said on Sept. 26 that the refinery would remain down for an "extended period of time" but did not specify the damage sustained and declared force majeure on product deliveries.

The flight then headed east along the Gulf Coast Intracoastal Waterway (GICW) to Orange, Tex., near the Texas-Louisiana border. Several portions of the GICW remain closed in Texas and Louisiana due to obstructions. In between Port Arthur and Orange, a downed power line straddled the GICW.

"NUCLEAR WAR" ZONE. Rita's impact on the Port of Orange looked far more severe than that witnessed in Beaumont/Port Arthur. Rita's winds had gutted structures along the port, with barges and ships embanked along the shore.

Southeastern Louisiana appeared to bear the full force of Rita. In the small town of Holly Beach, La., the storm had ripped from their foundations homes along the shore, with no debris remaining. The town was gone. As one of the Coast Guard crew members commented, "It looks like a nuclear war happened here."

The trip ended in Cameron, La., a small town on the Calcasieu River waterway that connects the coast to Lake Charles, La. Rita's eye reportedly passed over Cameron, and the damage left behind indicated such a path. Some storage tanks along the Calcasieu River were crushed, and others lay in the river. The storm had destroyed docks along the Calcasieu and immersed cars and trucks in the river.

RIPPED FROM FOUNDATIONS. The Coast Guard reopened the Calcasieu River north of Cameron on Sept. 26, but the waterway from the coastline to Cameron remained closed due to lack of navigational aids and construction.

The town itself was still flooded severely, with few structures remaining except for the water tower. Homes and businesses had moved off their foundations and splintered into rubble.

The Coast Guard flight then turned west for the 50-minute trip back to Ellington Field. With the afternoon waning, the inside of the helicopter still felt the day's heat.

NEAR MISS. It will take considerable time for the oil and petrochemical hubs of Beaumont/Port Arthur and Orange to return to normal operations. Flooding and a lack of power prevent personnel from returning. Shipping obstructions -- not to mention smaller obstructions such as trees on roads and highways in this area of Texas -- will need to be cleared for vessel traffic to commence.

A bird's-eye view of the destruction Rita left behind in Louisiana is even more sobering. If Rita had continued on its originally forecasted path to hit near the Houston/Galveston area, the damage to critical Houston energy infrastructure would likely have devastated U.S. energy supplies.

LaFavers is a reporter for Platts Oilgram News


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