Oil refineries recovering from Ida; power outages led to so-called “stranded fuel”

Published: Sep. 23, 2021 at 6:36 PM CDT
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Oil refineries were not spared the impact of Hurricane Ida and power outages.
Oil refineries were not spared the impact of Hurricane Ida and power outages.(Source: WVUE)

NEW ORLEANS (WVUE) - Oil refineries impacted Hurricane Ida and power outages are recovering. At one point nearly a dozen refineries were offline and because of power outages they had so-called stranded fuel.

Nathan McBride is Regulatory Affairs Manager for the Louisiana Mid-Continent Oil and Gas Association.

“There’s really eight between Baton Rouge and New Orleans, but they brought the Krotz Springs refinery in as well because it could have an impact on the supply,” he said.

McBride said most of the impacted refineries are back in operation.

“I think the vast majority are back online. There are a couple that were, they’re still ongoing damage assessments and things like that. I believe it’s two of them at this point that are still undergoing damage assessments to decide, you know, how to bring them online safely,” said McBride.

Professor Pierre Conner is Executive Director of Tulane University’s Energy Institute.

“I would say that we weathered pretty well. Most of those nine Louisiana refineries that were shut down are back up and running and the refineries are getting back up actually sooner than production out in the Gulf of Mexico, kind of a reversal to what had happened during Katrina,” said McBride.

Still, Conner said some refineries turned to the nation’s Strategic Petroleum Reserve.

“A couple of the refineries did take advantage of the SPR for some ability to bring crude oil in as they were getting restarted,” he said.

McBride said it was not that refineries did not have fuel on-site.

“Refineries had fuel in tankage on-site, even the ones who happened to lose power especially down in the New Orleans area, so there was fuel in tankage, so the first hurdle we had to clear was get power to the terminals, otherwise known as racks at the refineries so that they could pull that fuel out of tankage and dispense it into the local markets, so you may have fuel at the refinery even though your refinery is not actually running,” said McBride. “A lot of the refineries, yes they shut down for safety reasons during the storm but then they were not able to come back up because they didn’t have electricity, so it really does all come down to power supply.”

He also responded to a question about how the oil and gas industry is doing overall in Louisiana.

“There’s definitely been better times, I’m not going to sugar-coat that. I will say that we have some, I guess for a lack of a better term, self-inflicted issues especially coming from the federal leasing ban in the offshore and some things like that, that definitely don’t help the situation, right, but we maintain a level of optimism about the industry if we have the right economic climate,” said McBride.

Oil prices and costs at the pump are up.

“We’ve had a couple of dollars a barrel which would translate into a few cents at the pump, but really the bigger driver has been recovery and overall transportation demand around the world and the fact that we’re coming out of some of the COVID restrictions,” Conner stated.

The U.S. Energy Information Administration says Louisiana has 17 oil refineries and they account for nearly one-fifth of the nation’s refining capacity and can process about 3.4 million barrels of crude oil per day.

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