Seems like in the short term we may have a “demand outstrips supply” situation. What a strange concept…where have I heard that concept mentioned before? Hmmm. *cough*peak oil!*cough*
The international Energy Agency warns that the damage inflicted by Hurricane Katrina to strategically important Gulf of Mexico oil refineries could spark a global energy crisis. IEA director Claude Mandil reported Sept. 4 that because a significant proportion of US oil refining capacity was impacted, it would have to look offshore to meet its requirements and prices would rise. “They are already buying gasoline in Europe,” he said.
“If the refineries are damaged that will only increase,” said Mandil. “Then this will become a worldwide crisis very quickly. If the crisis affects oil products, then it’s a worldwide crisis. No one should think this will be limited to the United States”.
He advised consumers, especially the poor countries, to save fuel so as to limit the fallout from the hurricane.
To limit the damage, the IEA’s 26 oil-consuming member nations pledged over the weekend to release 60 million barrels of fuel. This would make up for the destruction caused by the hurricane. But the huge damage inflicted on the Gulf of Mexico refineries will not be fixed for weeks or even months.
The devastating winds of Hurricane Katrina have blown ashore a new energy crisis.
As residents of four states mourned their losses and try to recover, the hurricane’s damage to the oil and gas infrastructure in the Gulf of Mexico is driving up energy costs. Crude oil prices hit a record of $70 a barrel last week and gasoline, heating oil and natural gas have followed, increasing the cost of everything from filling your car’s tank to heating your home.
Call it what you will. Sugarcoat it if you want. But we’re in a full-blown energy crisis.
It was developing even before Hurricane Katrina tore the heart out of the South. It will remain even when the cleanup is well under way. The enraged Katrina may have forced the issue, but energy costs were already consuming an increasingly greater proportion of consumer budget even before this natural disaster.
Economists may not define this as a crisis in some technical sense, but the Average Joe will. These are life-changing circumstances.
People are getting rich off this. More people are getting poorer.
Katrina deepened what was already a profound energy crisis, and gasoline prices continued to climb Thursday as the effects of the hurricane filtered their way through the national economy, whose growth pace has already begun to slow.
Prices brushed $6 in Atlanta and hovered near $3.40 from Trenton, N.J., to Los Angeles. Analysts traded anecdotes about gas lines forming 20 and 30 cars deep in Charlotte, N.C., as residents worried gas supplies would run out going into the holiday weekend.
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