Hurricane Irene Threatens East Coast Refineries
NEW YORK -- Refineries on the East Coast are keeping a close eye on Hurricane Irene as it barrels its way north, and they are preparing to shut down operations if necessary.
As of 11 a.m. Friday morning, the outer rain bands of the storm were nearing the Carolina coast and moving north at 14 mph, according to the NOAA National Hurricane Service. Hurricane Irene was expected to reach New Jersey and New York by Sunday morning, pounding the two states before moving north to New England.
In advance of the storm, East Coast refineries -- which are concentrated mainly in New Jersey and Pennsylvania -- are beginning to turn off and secure equipment, according to the Associated Press. "Even if the storm misses them, they can't take any chances," explained Ben Brockwell at the Oil Price Information Service.
The main buildings at refinery complexes are built to sustain hurricane-force winds; however, pipes, cooling towers and power lines are susceptible to damage. Utilities across the eastern seaboard are already predicting widespread power outages from winds and downed trees.
After the storm passes, refineries need several days to restart operations. Some could need as much as a month to get back to full operation, according to the AP report.
The looming shutdowns are already impacting gas prices, with gasoline futures rising nearly 2 percent on Thursday, Aug. 25. According to Tom Bentz, an analyst at BNP Paribas Commodity Futures, traders are betting that supplies will be squeezed.
"There's the potential for certainly coastal flooding, potential for refinery outages, potential for shipping delays, things like that," he told the AP.
If history is any indication, increased gas prices could hit motorists this weekend as they flock to gas stations to top off their gas tanks before Hurricane Irene strikes. In 2008, gas prices jumped 21 cents a gallon in just eight days as Hurricane Ike made its way across the Gulf of Mexico to make landfall in Galveston, Texas.
Shutdowns that last more than a few days would put serious pressure on fuel supplies and prices. Fuel stockpiles are already low because distributors are preparing to switch to wintertime grades of gas. Sale of those grades starts in September.
"Anything longer than a few days could be a problem," Brockwell said.
East Coast refineries are located in Virginia, Delaware, Pennsylvania and New Jersey. They account for 7 percent of the nation's refining capability, producing more than 19 million gallons of gasoline and diesel a day, according to the Energy Information Administration.