What happened to those predictions of a global energy crisis, following Katrina?
The week before the hurricane, the US gasoline inventory was down to 194 million barrels or about a 19-day supply. The loss of production from 10 refineries and the shutting down of the pipelines soon led to spot shortages running from the Rockies through the mid-west to the Southeast. The West Coast and north of New York are not part of the Gulf oil infrastructure.
As could be expected, spot shortages quickly developed as long as the pipelines were out of operation and local distributors had to rely on whatever inventory was in their tank farms. Panic buying added to the problem. In the Washington area, Exxon-Mobile reported that their sales doubled as people rushed to fill their tanks in face of rapidly rising prices and potential shortages.
By week’s end, however, the electricity was restored to the pipelines and an additional 20 days supply became available to the south eastern states. (It takes about 20 days for a barrel of oil to pop out in Virginia once it has entered the pipeline.)
The reopening of the pipelines, of course, takes care of our fuel supply for the next couple of weeks, but what about the missing 1.4 million barrels of daily production from the Gulf and the gasoline from the four severely damaged refineries?
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