Originally created 09/23/05

Storm's effects could spread to Augusta pumps



Brace yourself.

Rita's wrath might create gas shortages and high prices that even Katrina couldn't muster, oil analysts say.

"The hurricane really couldn't have picked a worse path to take," said Denton Cinquegrana, the markets editor for the Oil Price Information Service.

Hurricane Rita is expected to pass through Houston, "the nerve center for the petroleum industry," Mr. Cinquegrana said.

By today, 14 major refineries in Texas will be shut down. Hurricane Katrina shut down nine in Louisiana and Mississippi, four of which remain closed, with no known date to reopen, he said.

Now, "there is a potential for 25 percent of all U.S. refining capacity to be sidelined," he said.

Depending on the storm's damage, gasoline costs could return to $3 a gallon and more, and spot shortages could occur, Mr. Cinquegrana said.

Even if the hurricane's impact is minimal, gasoline prices and availability still could be affected because it takes about a week after a shutdown to restart a refining operation.

"It's not like you flip a light switch and it goes back on," he said.

Since Katrina struck, oil companies have continued to allocate gasoline to their customers in limited amounts. The allocations could get tighter after the storm, Mr. Cinquegrana said.

As farmers nationwide prepare for harvest, the demand for diesel is likely to be great, and it could be tough to get it, he said.

The Colonial Pipeline, which serves the Southeast, is still flowing.

The problem would occur when there's not any refined oil to put in the pipe, he said.

Rita's effect on the industry won't be realized until the storm has passed.

"There are a lot of unknowns right now," Mr. Cinquegrana said. "I don't want to be an alarmist, but this does have the potential to be a very bad storm. This can have a ripple effect through the entire nation."

Locally, gas prices in the Augusta area Thursday remained in the range of $2.45 to $2.55 a gallon for regular unleaded, which is about what they were Wednesday.

Judy Reville, a spokeswoman for AAA of Augusta, said it's hard to say when prices at the pump will rise. But, considering that the price of crude oil has been soaring, the increases will soon pass to consumers, she said. On Thursday, the price per barrel was $67.

"We're in uncharted territory with regards to price and supply," she said. "Never has a storm shut down so many refineries only to be followed by a second one slamming into another oil-producing refinery area."

Fortunately, demand for gas is lower than when Katrina struck during the Labor Day travel rush, she said.

"One thing that's working in our favor is that the next major travel holiday isn't until Thanksgiving," Ms. Reville said. "Ever since Labor Day, demand has been down."

That might be why area gas stations haven't yet experienced a rush, she said.

Some of the stations with lower prices saw slightly larger crowds throughout the afternoon Thursday.

At the Triangle station at the corner of Agerton Lane and Wheeler Road, Julie Gibson, of Birmingham, Ala., was buying regular gas for $2.44 a gallon, which she said was 20 cents less than in Birmingham.

Augustan Hugh Jones was concerned about the possibility of a price surge going into the weekend.

"I know it's a bad situation, but it's going to get worse," he said as he pumped regular fuel. "Maybe one of these days things will get better; we'll just see."

Reach Tony Lombardo at (706) 823-3227 or tony.lombardo@augustachronicle.com.

Reach Dena Levitz at (706) 823-3339 or dena.levitz@augustachronicle.com.

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