SAN ANTONIO -- As the Federal Emergency Management Agency (FEMA) struggled yesterday to quell rumors it would commandeer gasoline supplies in advance of Hurricane Rita hitting the shore, oil refiners in the Gulf Coast area began closing parts of their refineries, one even calling the situation a potential natural disaster.
FEMA has not put restrictions on the selling of fuel by anyone because we don't have the authority to do so, plain and simple, Ken Higginbotham, spokesperson for FEMA, told the Hattiesburg (Miss.) American.
Nevertheless, the newspaper reported, panicked motorists packed streets in some Gulf Coast towns and are waiting in long linessome one to two blocks longbecause some said they heard FEMA was set to cut off gasoline supplies at noon yesterday.
National Hurricane Center forecasters projected thatHurricane Rita will make landfall late Friday on the Texas coast. Rita, a Category5 storm with winds up to 160 miles per hour as of presstime yesterday, comes less than a month after Hurricane Katrina struck southeast Louisiana and southern Mississippi as a Category4 storm, causing widespread destruction and flooding and disrupting the gasoline supply across the country. Thus, Rita's proximity to several refineries has consumers concerns.
Keith Saucier, owner of 19 Keithco gas stations in southeast Mississippi, said there is no shortage of gasoline, even though lines have quickly formed at nearly all his stations. It's a well-done rumor, but there is no shortage, he told the Hattiesburg American. The biggest problem we have right now is people have panicked, and [gasoline is] selling so fast it's hard to get trucks everywhere they need to be.
Meanwhile, San Antonio-based Valero Energy Corp. chairman and CEO Bill Greehey said Hurricane Rita's impact on U.S. crude oil production and refining could be a national disaster, according to a Reuters report. If it hits the refineries, and we're short refining capacity, you're going to see gasoline prices well over $3 a gallon at the pump, Greehey said Tuesday night.
It's going to be coming across the [U.S.] Gulf [of Mexico]," Greehey said. "There's a lot of oil platforms, oil rigs, [natural] gas platforms, gas rigs. It could have a significant impact on supply and prices, and then, depending on what it does to the refineries, there are still four refineries that are shut down. So this really is a national disaster."
Refineries in Houston and Texas City process 2.3 million barrels of crude oil or 13.5% of daily U.S. refining capacity, according to Reuters. The Beaumont-Port Arthur, Texas, refineries account for another 1.1 million barrels in refining capacity.
Based on Rita's current forecast path, Texas City, Houston, Port Arthur and Beaumont could be lashed by high winds and heavy rains from Rita's northeast quadrant, which often packs the highest winds in a hurricane.
Valero announced on Wednesday morning it would reduce production at its Houston and Texas City refineries to prepare for the hurricane. Also, BP PLC began closing parts of its massive Texas City refinery yesterday and expected to decide whether to shutter the entire facility later in the day as Hurricane Rita spun across the Gulf of Mexico, according to the Associated Press.
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