Rita could equal $5 gas

The timing and strength of the latest storm could cause worse spike at the pumps than Katrina did.

September 21, 2005: 2:43 PM EDT
By Chris Isidore, CNN/Money senior writer




NEW YORK (CNN/Money) - Remember when gas spiked to $3-plus a gallon after Hurricane Katrina? By this time next week, that could seem like the good old days.

Weather and energy experts say that as bad as Hurricane Katrina hit the nation's supply of gasoline, Hurricane Rita could be worse.

Katrina damage was focused on offshore oil platforms and ports. Now the greater risk is to oil-refinery capacity, especially if Rita slams into Houston, Galveston and Port Arthur, Texas.

"We could be looking at gasoline lines and $4 gas, maybe even $5 gas, if this thing does the worst it could do," said energy analyst Peter Beutel of Cameron Hanover. "This storm is in the wrong place. And it's absolutely at the wrong time," said Beutel.

Michael Schlacter, chief meteorologist at Weather 2000, said Rita now appears most likely to hit between Port Arthur and Corpus Christi, Texas, sometime between Friday afternoon and Saturday morning.

Just about all of Texas's refinery capacity lies in that at-risk zone. (For a look at CNN.com's coverage of Hurricane Rita, click here.)

"There is no lucky 7-10 split scenario to use a bowling analogy," he said. "If you're [a refiner] within 200 miles, you're going to feel the effect."

Compounding Katrina's impact
When Katrina hit, 15 refineries, nearly all in Louisiana and Mississippi, with a combined capacity of about 3.3 million barrels a day were shut down or damaged, according to the Energy Department. That represented almost 20 percent of U.S. refining capacity.

Within a week, almost two-thirds of that damaged capacity had resumed some operations, according to the department. But four refineries with nearly 900,000 barrels a day of capacity are still basically shut down.

If Rita hits both the Houston-Galveston area, as well as the Port Arthur-Beaumont region near the Texas-Louisiana border, that could take out more than 3 million barrels of capacity a day, according to Bob Tippee, editor of the industry trade journal Oil & Gas Journal in Houston.

"Before Katrina, the system was already so tight that the worst-case scenario was for a disruption that took 250,000 barrels of capacity out of the picture. That would have been considered a major jolt," said Tippee.

"We're already in uncharted territory now. We can't project what happens from another shot the size of Katrina or worse."

Part of the problem is that skilled crews needed to make refinery repairs are already busy trying to fix the Katrina damage. That would extend recovery time from Rita.

"[Rita] could have a significant impact on supply and prices -- this really is a national disaster," Valero Energy (Research) CEO Bill Greehey in an interview with Reuters Tuesday evening.

Here we go...everyone is going to panic now.

CarrieLee said:

no just a little crying is all

HollowellSA said:

I'm just saying in general...let's just wait and see what happens.

I doubt it will get that high. People are already mad because of how high it is now. So no worries

CarrieLee said:

You should see it here in Houston! "Panic" doesn't describe it! They're going bat-shit crazy with terror! Pussies!

HollowellSA said:

Well, you never know. They can use this hurricane as an excuse to make more money. It's all greed.

JediMaster said:

Nooooo! I just got happy a few days ago knowing that gas was only $2.50. this sucks....again

RITA has been upgraded to a CATEGORY 5!!! When it hits Texas and Louisiana, it will be MORE POWERFUL than Katrina!!!


Rita
[Edited 9/21/05 13:59pm]

damn I better go fill up now.....



Things to buy list

1. batteries
2. Ice for when my power goes out to keep the food cold
3. propane for the grill to cook all of my meat
4. bungies to ties down every damn thing in my back yard
5. water--have 15 gallons but also have 100 lbs dog who drinks

BOOMshockaLockaBOOM said:

Isn't it sad how quickly $2.50 became "cheap" for gasoline?!

endorphin74 said:

yeah. very very sad.

and we thought that al qaeda was a problem.....Mother Nature is whoopin' our asses....


Maybe mother nature is hiding Bin Laden....

Technically, you'd think that in Minnesota we wouldn't have to deal with larger prices since we have refineries in the state (two in the south metro). I'm sure they'll just come up with some excuse to jack up the price anyway.

$5 a gallon for gas!? At those prices, I'll have to find something else to feed my kids.

Fuckin' hurricane.

Get out. Everyone get out if u live there. Don't think that u can brave the storm. Look at what happened with Katrina.

BoOTyLiCioUs said:

after Katrina....I don't think folks there are assin' around.

Rhondab said:

that's so true it's funny.

Broke-Fi-Broke.....we - can't - afford - no - gas!!