Katrina’s impact hits pumps, snarls rescue efforts

By Terry Scruton, "Land Line Now" senior correspondent | Wednesday, August 31, 2005

As rescuers struggle to evacuate the remainder of the people from downtown New Orleans amid rising floodwaters, more reports about the extensive damage from the storm are coming in.

By midday Wednesday, Aug. 31, reports put the death toll above 100, but rescuers said it is still too early to get a full assessment. Meanwhile, New Orleans is evacuating the remainder of its residents - including the more than 20,000 who took shelter in the Superdome - as floodwaters from Lake Pontchartrain continue to surge over levee breaks and into the downtown area.

The economy remains jittery in the rest of the country, as nervous investors and consumers alike wait for more news about the long-range effects of the storm.

Light, sweet crude oil was trading at around $69 per barrel on the New York Mercantile Exchange on Wednesday, after spiking above $70 a barrel for three days in a row.

Diesel prices are beginning to creep up across the nation. ProMiles is reporting a national average of $2.70 per gallon for diesel, up 7 cents from the $2.63 reported on Tuesday, Aug. 30.

Experts are saying that consumers shouldn't expect prices at the pump to go down anytime soon.

Tom Kloza, senior analyst at the Oil Price Information Service, told USA Today that retail fuel prices could jump anywhere from 20 to 75 cents a gallon during the next few weeks.

However, the White House announced Wednesday that it would release oil from the Strategic Petroleum Reserve, though it had not yet determined how much it would release.

In addition, White House economic advisor Ben Bernanke told CNBC that, while the hurricane would have a big impact on the economy of the Gulf region, its impact on the economy in the rest of the country would be modest.

Some drivers are already beginning to see shortages and rationing at the pump.

OOIDA member Karen Barnett of Lyford, TX, said that a Travel Centers of America truck stop in Edinburg, TX, was rationing diesel on Tuesday, limiting drivers to 100 gallons per truck.

Barnett said her driver tried to pump more than 100 gallons on two separate fuel cards and was stopped by the station's management.

"They came out there and tried to take the nozzle out of the truck and told him he couldn't get more than 100 gallons," she said. "It almost went into a fist fight there."

A call to the station confirmed that indeed rationing was going on for one day, but that it had been stopped as of Wednesday. The station's general manager told Land Line the oil company that supplied the station was rationing the fuel it sold to the station, which in turn had to ration it to customers.

Another OOIDA member reported similar rationing going on at a TA stop in Nashville, TN. The fuel desk at that station told Land Line that the station was completely out of fuel on Wednesday.

Tom Liutkus, director of public relations for TA told Land Line that most companies that get their fuel from the Gulf region are experiencing difficulties right now. He said the Colonial Pipeline, which runs from Texas all the way up through Rhode Island, is shut down from Houston, TX, to Greensboro, NC, and supplies are limited.

"I think the entire Southeast is not going to get anything from there," he said.

Liutkus said that many TA locations in Virginia, North Carolina and Florida are rationing diesel at 50 gallons per truck.

In the meantime, oil companies with operations in the Gulf area have issued their first damage reports. The Coast Guard reported as many as seven oil platforms were adrift in the gulf.

The Houston Chronicle reported that Shell found damage to at least one of its facilities, while BP said it has not seen any immediate damages.

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