Hurricanes part of tumultuous year for energy industry

Energy issues surged to the fore in 2005, and Denver was in the midst of it.

For example:

• Gasoline pump prices broke the $3-per-gallon mark during the Labor Day weekend in Denver.
• Home heating and lighting costs jumped.

• There was increasing talk that the world is quickly running out of so-called “cheap” oil.

• President George W. Bush signed a new, national energy bill that carried incentives for energy conservation as well as energy expansion.
• Two hurricanes, Katrina and Rita, exposed the fragility of the nation’s Gulf Coast energy infrastructure and refocused attention on the Rocky Mountain West.

Colorado and the Rocky Mountains are literally keeping the country going as far as [natural] gas production so important to the country,” said Greg Schnacke, head of the Colorado Oil & Gas Association industry trade group.

“This global demand phenomenon and the hurricanes have made the Rockies’ production so important to the country. I’m not certain that people here know and appreciate it. I shudder to think what gas prices would be doing if we weren’t here.”

When Katrina and Rita whirled through the Gulf of Mexico, then slammed into the coast, oil rig workers fled the deep-water platforms off shore, shutting things down before they left. Under the water, the winds and waves damaged pipelines that carry oil and natural gas to shore for processing — and those onshore plants received their share of damage.

Even now, nearly four months after Katrina swamped New Orleans, more than a quarter of the daily oil production from the Gulf remains shut down due to damage. About 20 percent of the daily natural gas production also remains closed, according to the federal government.

And even if a magic fairy fixed all the problems overnight, there’s nothing to be done about the production that’s already been lost — nearly 20 percent of all the oil the United States gets from the Gulf every year and almost 15 percent of the natural gas production.

Denver Business Journal