"Analysts said the effects of the hurricane on the oil industry in the Gulf of Mexico - particularly the refining sector - would last months and could become the catalyst for a sustained oil shock.
. . . .
"Depending on what we learn in the next few days this may be the biggest oil-supply shock since the 1970s," said Daniel Yergin, chairman of Cambridge Energy Research Associates."
"Much of the problem today is not so much an immediate shortage of crude oil as an inability to operate strategic oil product pipelines or refineries.
The storm, which submerged New Orleans after it slammed into the Gulf Coast on Monday, crippled substantial portions of the country's energy infrastructure. Electrical power came down in Louisiana, Mississippi and Alabama, refineries were drowned and most of the offshore production of oil and gas closed.
The production facilities for more than 1.37 million barrels of oil, or 90 percent of the gulf's daily oil output, remained closed Wednesday.
Natural gas production was down 8.3 billion cubic feet, or 235 million cubic meters, according to the Minerals Management Service, a unit of the Department of Interior.
U.S. Coast Guard crews said that up to 20 rigs and platforms had either sunk or gone adrift, said Larry Chambers, a public information officer. At least one gas rig has caught fire.
A shortage of aircraft and workers is hobbling efforts by energy producers like Exxon Mobil, BP and Chevron to assess damage to the 956 platforms and drilling rigs located in the gulf.
Royal Dutch Shell's Mars platform, which accounts for 15 percent of the oil production in the gulf, is "severely damaged," according to the Coast Guard.
"It's going to be several days at a minimum before Chevron will be able to report on the impact of the storm on our facilities," Mickey Driver, a Chevron spokesman, said from Houston.
The U.S. Environmental Protection Agency relaxed pollution standards Wednesday to allow the use of lower grades of gasoline in the United States, in a bid to blunt the effect of gasoline shortages on prices.
"I hate to be an alarmist, but we're in a situation without much precedent," said David Pursell, a principal with Pickering Energy Partners in Houston.
"With the gasoline market as tight as it is, people complain about $3 gas but they'll put $5 gas in their car if they suddenly think it's not available.""
http://www.iht.com/articles/2005/09/01/business/oil.php