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No easy fix for Rita-damaged oil works
Report: Problems getting workers, helicopters, equipment slowing repairs to offshore production.
September 30, 2005: 6:58 AM EDT
A refinery in Port Arthur, Texas that was damaged by Hurricane Rita.
A refinery in Port Arthur, Texas that was damaged by Hurricane Rita.

NEW YORK (CNN/Money) - Getting off-shore oil and natural gas platforms back in service after two Gulf of Mexico hurricanes is proving difficult, according to a published report Friday.

The Wall Street Journal reported that efforts to restart facilities a week after Hurricane Rita blew through the area are being hampered by a lack of sufficient workers, helicopters and equipment.

The federal Minerals Management Service reported Thursday that about 99 percent of oil production in the Gulf, or about 1.5 million daily barrels, remains shut down, while about 80 percent of natural-gas production, or nearly 8 billion cubic feet of gas a day, remains shut.

Much of that was taken offline as a precaution before Rita hit. Still, production returned much faster immediately following Katrina last month and Hurricane Ivan last year, the Journal reports.

"A lot of dock facilities that boats would leave from are gone. Hangars are messed up. Helicopter availability is tight," Tony Lentini, a spokesman for the Houston-based exploration company Apache Corp., told the paper.

The storm also did significant damage to rigs, which are used to explore for new offshore sources of oil and gas. The two hurricanes either sank or seriously damaged 13 drilling rigs, the Journal reported, citing ODS-Petrodata, an offshore market-analysis firm. That shrank an already tight Gulf of Mexico fleet by 12 percent, and could hamper exploration for months to come.

"Will it be more difficult to drill? Yes. Will it be more expensive? Yes. Will the end product cost more? You bet," Al Reese Jr., chief financial officer of ATP Oil & Gas Corp., told the paper.

Restarting seven refineries hit hardest by Rita -- from Port Arthur, Texas, to Lake Charles, La. -- is also taking longer than originally thought, the paper reported. A bit more than 20 percent of U.S. refinery capacity is now out of service from damage from either Rita or Katrina.

Reliable electricity is turning out to be the biggest hurdle for restarting refineries in the hard-hit area around the Texas-Louisiana border. The Minerals Management Service's own office in Lake Charles could be shut for a month due to lack of electricity.

Even some refineries not hit head on by the storm are taking somewhat longer to fix than originally expected. BP said Thursday it could be several days before damage to insulation is repaired at the nation's No. 3 refinery, its 437,000-barrel-a-day Texas City facility. Texas City is near Galveston and Houston.

The paper reports that repairs could take longer than expected and will likely keep upward pressure on fuel prices, renewing concerns about heating costs this winter.

It's also pushing the Bush administration to unveil a national energy-conservation campaign next week, aimed at giving consumers, businesses and federal agencies tips on saving energy during the winter heating season. Conservation has been at best a low priority for the administration in the past.

Department of Energy Secretary Samuel Bodman is expected to showcase a public-education effort Monday called "Easy Ways to Save Energy," according to department officials familiar with the plan, the Journal says. The department, working with the nonprofit Alliance to Save Energy, will encourage consumers to add insulation, repair weather stripping, install thermostat timers and take other steps to reduce heating bills.

For a look at the sticker shock that could face Americans heating their homes this winter, click here.

For a look at more news about this year's oil crunch, click here.  Top of page

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