Drivers hoping for sub-$3.50 gasoline should be wary of Ike. Hurricane Ike has a minimum pressure capable of spurring Category 4 strength at ~950 mb, but the storm’s disorganization is spreading that energy across a larger area rather than focusing it on tremendous winds around the eye. So the cyclone is the size of Katrina (hurricane winds up to 115 miles away from the eye and tropical storm winds up to 275 miles!), but it’s much weaker.
It is still a serious threat to our petroleum system. Not only is it preventing the Gulf’s oil and gas rigs from getting back online post-Gustav, but it is also forecast to hit the refining heartland of our country. So, the products we consume (including gasoline, diesel and propane) may be in much shorter supply next week. If inventories were full, this wouldn’t be a big issue, but gasoline and propane are already at extremely low levels compared to the last five years.
For natural gas, the weekly inventory report showed how resilient US production of natural gas has become in 2008. Even with an outage of 42 billion cubic feet (bcf) from Hurricane Gustav last week, storage levels rose 58 bcf or just 20 bcf below average for the week. Unless Hurricane Ike strengthens dramatically (which is completely possible over the next 36 hours) and takes out quite a few natural gas rigs, our natural gas market appears to be well supplied for the upcoming winter. Again, since natural gas burns cleaner than oil and coal, I find this development a welcome one for the climate.
I will give a full update on Ike tomorrow as it approaches the refining center of our country. If our vehicles were solar- and wind-powered, our whole country would not have to worry so much about the energy impact of a Gulf storm…
Time for a sustainable energy transition-
Tags: gasoline, Hurricane Ike, Natural Gas, Oil