Video: Nat-gas shortages?

updated 9/13/2005 7:51:47 PM ET 2005-09-13T23:51:47

It may take months to resume fully natural gas production after Hurricane Katrina, top Bush administration officials said Tuesday while expressing worries about shortages this winter.

Unlike with heating oil and gasoline, there’s little ability to make up the difference with imports.

“There are concerns about the supply of natural gas,” Energy Secretary Samuel Bodman said Tuesday, a week after an agency in his department predicted that natural gas prices in some parts of the country will be 71 percent higher than last winter.

Bodman and Interior Secretary Gale Norton took a helicopter tour of the Gulf to observe the damage to oil platforms and flew over the Louisiana Offshore Oil Port, the terminal where huge oil tankers drop off their cargo in deep waters miles offshore.

Evidence that the recovery of the region’s oil production facilities is incomplete, at least half a dozen tankers were anchored near the port waiting to drop off their cargo. The facility, known as the LOOP, returned to full operation last weekend.

Norton said that 90 percent of the Gulf oil platforms will be capable of production by the end of the month. But she emphasized that there is widespread damage to onshore facilities that will hamper production beyond then.

Bodman and Norton visited one of the government’s Strategic Petroleum Reserve facilities, where the government is providing several refineries with oil to make up for supply losses. They then went to an ExxonMobil refinery near Baton Rouge, La., which has needed government oil to continue production.

Bruce March, the refinery’s manager, said that about 20 percent of its crude is coming from the government stockpile. The refinery, the second largest in the country, scaled back production briefly after the hurricane hit, but it now is again in full production, March said.

Norton said that 58 percent of Gulf oil production remains shut down, as does 38 percent of the region’s natural gas production.

Both Cabinet members expressed concern about upcoming supplies of natural gas. About one-third of the Gulf’s natural gas production has been disrupted.

Bodman said that “there is less known” about the extent of damage to underwater natural gas pipelines and it’s uncertain when those facilities will be up in full operation. He said it could be several months before the region’s natural gas system recovers.

While the loss of oil production is being made up from government reserves and foreign supplies, there is no such backstop for natural gas.

“We don’t have an international market” that the country could rely on for additional supplies as it does with oil, Norton said.

Last week, the Energy Information Administration estimated that natural gas prices would soar this winter because of the hurricane, including increases as much as 71 percent in parts of the Midwest.

Bodman and Norton met with senior executives from two dozen energy companies Monday evening in Houston. The executives said they needed government help in arranging for housing for thousands of employees as they struggled to return the Gulf’s oil and gas system to full operation, he said.

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