Now for the Bad Katrina News
The other day I posted on some of the good news coming out of the New Orleans area in regards to oil and gasoline. Prof. Hamilton also notes some bad news as well. It is important to look at all these things to try and get a clear picture of the situation in New Orleans in regards to oil and gasoline.
First off Prof. Hamilton points to the Oil Drum’s noting the complete loss of 30 drilling rigs. Also the slow rate at which oil production is coming back on line. Now this is bad news for crude oil markets in that it makes the market a little less competitive and hence prices a little bit higher. Also, the market is likely to be more volatile. With reduced production in the Gulf of Mexico, the market is a little bit more dependent on oil out of places like the Middle East and the tensions there make the market volatile.
Prof. Hamilton also notes the problems and his feelings of frustration with New Orleans itself.
Although the logistical problems with fuel supply are amenable to rational plans for coping, I can’t help but feel frustrated by the slow progress within the city of New Orleans itself. I’m haunted by the words of Kash at Angry Bear: “These do not sound like stories written about the United States.” And of course, the stories themselves are indisputably haunting.
This could also be a very big problem as well. First off many of the workers at the refineries and pipelines probably live in the area and have concerns for their homes and families. As I noted yesterday the electrical situation is very bad and that is a big hurdle facing the refineries and pipelines as well as the LOOP. Getting power back in the area is going to be a long time in coming, IMO. I don’t know how things are prioritized there, but I can imagine that getting power back to important things like hospitals and so forth is going to be high on the list. And then the anarchy that New Orleans has descended into is probably going to make and rebuilding efforts take longer.