Producers Ready for Evacuations if Storm Moves into GOM

As the one-year anniversary of Hurricane Katrina approached, the energy industry was watching a possibly ominous tropical storm strengthening in the Atlantic Basin, which was expected to be upgraded and named Ernesto before the end of Friday.

Many Houston-based oil and natural gas companies were taking a wait-and-see approach to the possible threat. BP plc was one of the few to officially announce it was considering an evacuation of its nonessential personnel from its rigs on Friday. None of its production was expected to be affected. Chevron Corp. and Apache Corp. also were monitoring the storm, but they announced no plans to evacuate.

At El Paso, spokesman Joe Hollier said the company was prepared to activate a storm plan if it became necessary. In any case, Hollier said El Paso has "accelerated" its evacuation plans, moving them up "a day or two for offshore and onshore as well," he said. Since last year, he said El Paso has installed new systems to improve employee safety. "Our communications have increased a bunch. We now have satellite phones on all of our helicopters, and we have an employee 1-800 tracking number. That is a big thing."

Skip Simmons, a gas researcher for Wood Mackenzie, said the onshore gas processing plants also now are better prepared for a major storm.

"The processing plants were affected in a major way last year," said Simmons. "Those same plants this year would face similar exposures. But many of them, as they have reconstructed their facilities, tried to insulate themselves from some of the damage, particularly to onsite flooding. Last year there was an inability to get water away from the sites and restore operations."

When the damaged gas processing plants were rebuilt, Simmons said they were raised "further above ground. Any facility as near as they are to the Gulf of Mexico and to beach structure would be potentially subject to damage again. We learned some valuable lessons from last year."

Wood Mackenzie senior energy researcher Eugene Kim said all of the offshore industries affected have done what they can to prepare for this year. But even though several design upgrades and facilities improvements have been proposed "little could be done before the peak 2006 hurricane season." He said "manpower, assessment, repair, supply, logistic and contractor resources were overstretched. The emphasis has been directed mainly at improving redundancies in terms of having enough supplies on hand, [duplication] of major communications and logistical equipment and access to supplemental onsite standby power generation."

El Paso's Hollier said he thought the energy industry was as prepared as it could be for hurricane season. "The industry is always prepared as a whole. We have moved up our evacuation plans mostly to prepare the onshore as well as we have the offshore. Nobody takes these things for granted when one comes through. We've lived it. We know what to expect. We have implemented things that will only help us get back on faster."

Copyright 2006 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

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