Energy Crisis Still Possible, Experts Say

US consumers dodged a fuel crisis this past weekend as crude oil prices dropped, thanks mainly to the release of 60 million barrels of crude oil from strategic stockpiles --- a release aimed at helping the U.S. oil industry snap back after Hurricane Katrina.

Still, experts warn an even more serious crisis my be looming just down the road. Overall prices could rise again due to the long-term effects from Hurricane Katrina’s damage, which has made it difficult for refineries to meet demand of gasoline and other products.

Federal officials are pleased at the progress they’ve made in the aftermath of Katrina. Even so, they stress that most refineries and oil production in the Gulf Coast region have remained out of operation for the past 7 days, according to a report published in the New York Times. Indeed, of the 10 refineries that were shut down because of the storm, eight have still not resumed operations. It will require several more days to restart these facilities. (NYT)

Aside from that, there are nearly three months to go before the end of the Atlantic hurricane season, which peaks between mid-September and mid-October. Simply put, a storm of Katrina’s magnitude could wreak similar havoc on the East or Gulf Coasts within the next few months.

This partly accounts for why, despite the releases by the crude oil releases by the International Energy Agency and the federal government, the potential for shortages exists and will persist.

Scott Dean, a BP spokesman, says his company was shipping gasoline from Europe to the East Coast to help reduce shortfalls. However, he concedes it may take time for the current shortfalls to work their way out of the system.

“We are making fuels, we are distributing fuels,” he said. “Fuels are arriving at the terminals and going out on trucks and arriving station, but there are still distruptions.”

Posted by Jim Langcuster at September 6, 2005 01:20 PM | TrackBack