U.S. Gulf refineries at mercy of battered power grid

MERAUX, Louisiana (Reuters) – The normally bustling Murphy Oil Corp refinery in Meraux, Louisiana, stood in eerie silence on Wednesday, apparently undamaged but paralyzed by a lack of reliable power in the wake of Hurricane Gustav.

The plant was one of 11 refineries — representing just over 11 percent of the U.S. fuel supply — still shut by the storm that made landfall near New Orleans on Monday. A chunk of that fuel production remains at the mercy of a power system that took a devastating hit.

“We don’t have the damage from wind and flooding, so now we’re just mainly focused on a damaged power grid, which could take days or weeks to recover,” said oil analyst Jim Ritterbusch, president of Ritterbusch & Associates of Galena, Illinois.

Energy experts said U.S. fuel stockpiles appeared high enough to compensate for a temporary reduction in nationwide production, particularly as energy demand shrinks under the weight of high prices and a soft economy.

But a long delay could boost retail prices for gasoline and raise heating oil costs heading into the winter.

Reuters