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Hurricane Packs Punch on the Energy Markets

Natural gas and gasoline futures hit record highs as most production sites in the Gulf shut down.

KATRINA HITS THE GULF COAST

August 30, 2005|James F. Peltz, Times Staff Writer

Still, there was no discounting even the initial pain of Katrina's punch.

Tracking devices on two drilling rigs under contract to Shell Exploration & Production Co., a U.S. arm of Royal Dutch Shell, showed that they had drifted from their normal locations, Shell spokeswoman Darci Sinclair said.


For The Record
Los Angeles Times Thursday September 01, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 42 words Type of Material: Correction
Hurricane maps -- A map of the Gulf Coast with coverage of Hurricane Katrina in Tuesday's Section A labeled part of Interstate 10 as Interstate 12. Another map showing the storm's projected path mistakenly showed an island in the Gulf of Mexico.


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"Until the storm has completely passed and it's safe for us to send out crews and evaluate, we won't know what, if any, damage has occurred," Sinclair said. Shell expected to start sending out crews Monday evening, she added.

Another drilling platform broke free of its mooring in Mobile Bay, Ala., and slammed into a bridge, the Alabama Department of Transportation said. It was uncertain who owned the platform.

There also were reports of problems in other sectors of the economy, including:

* The airline industry, already suffering losses partly because of record jet-fuel prices, was forced to cancel hundreds of flights in the South and could be slammed with even higher fuel costs.

* Gulf Coast casinos in Louisiana and Mississippi were shut down; analysts feared they could suffer heavy flooding and a dearth of customers for at least several days.

* Chemical companies such as BASF were forced to close plants in Louisiana, and Japanese automaker Nissan North America Inc. closed its assembly plant in Canton, Miss., idling about 6,000 workers.

The hurricane also was felt in other commodities markets. Corn and soybean prices rose on the Chicago Board of Trade amid speculation that Katrina would damage fields from Louisiana to Ohio.

Energy companies operating in the Gulf have well-scripted preparations when a hurricane approaches.

Shell contracts with private weather services to supplement hurricane information from the National Weather Service. Shell's Gulf properties include 3,614 miles of pipeline, an offshore liquefied natural gas terminal and 16 offshore platforms.

Other companies have teams dedicated to the evacuation and shutdown of offshore platforms and onshore refineries.

"If there's anything we're doing this year that we didn't do last year, it's that we're taking advantage of fixed-wing aircraft to conduct our initial reconnaissance" instead of helicopters, Chevron spokesman Matt Carmichael said.

The planes can be used sooner in risky weather, have more range and provide "more time in the air to visually observe our facilities," he said.

Staff writers Ronald D. White and John O'Dell in Los Angeles, Edwin Chen in Washington and special correspondent Dana Calvo in Houston contributed to this report.

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