Oil and Gas Industry Damaged by Hurricane Ike

Reports of damage caused by Hurricane Ike to oil and gas infrastructure are still coming in, but so far the U.S. Minerals Management Service is reporting that 52 offshore oil and gas platforms were totally destroyed and another 62 were badly damaged. Most of the 3800 offshore platforms in the Gulf of Mexico are still shut down – oil production is currently operating at 38 percent of its normal level, and natural gas is operating at 43 percent of normal. Six gas transmission pipelines were reportedly damaged, but reports of damage to underwater oil pipelines are not yet available.

Ten oil spills have been reported so far – three on land and seven in the water. The land-based spills, reported by the company that lost the oil, were said to have totaled more than 1000 barrels. No estimates were given for the seven spills in the water.

Damage caused by the storm is adversely affecting natural gas prices, with wholesale natural gas prices up 18 to 28 percent over the past week in the region hit by the storm.