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Transcript of © LSU Center for Energy Studies Center for Energy Studies David E. Dismukes Center for Energy...
© LSU Center for Energy Studies
Center for Energy Studies
David E. DismukesCenter for Energy StudiesLouisiana State University
Interdependence of Power and Other Energy Infrastructure SystemsPresentation before Rebuilding the New Orleans Region: Infrastructure Systems and Technology.
New Orleans, Louisiana September 24-26, 2006
© LSU Center for Energy Studies
Center for Energy Studies
Is Energy Infrastructure ConcentrationAn Asset or Liability?
Concentration of infrastructure along the Gulf of Mexico (“GOM”) is an asset not liability.
While many areas of the Gulf South will take years to be rehabilitated from the 2004 AND 2005 tropical activity, the energy sector has been able to take rebound in a matter of months from the most comprehensively destructive set of storms in its history.
Despite concentration of assets, the overwhelming majority of all energy infrastructure was rehabilitated in less than 45 days after the events of 2005 – there is probably no place in the world where that kind of restoration activity could have been done in that amount of time.
Emphasis should be on developing policies that help insure infrastructure and quickly rehabilitate infrastructure in concentrated areas.
© LSU Center for Energy Studies
Center for Energy Studies
How Concentrated is Activity on the GOM?
The Gulf of Mexico:
Supports 30 percent total domestic crude oil production and 20 percent total natural gas production.
Provides over $6 billion in federal royalties and fees.
Supports 45 percent of total U.S. refining capacity (62 percent east of Mississippi River)
Home to the last greenfield refinery in U.S. (Garyville, LA, 1975)
Supports 60 percent of total crude imports (LOOP supports 15 percent alone).
Home to 43 percent of the SPR storage capability.
A large share of the refining, pipeline and petrochemical industry in the U.S.
Most of the pipeline capacity in U.S. originates in the GOM (25,000 miles in LA alone)
Home to the Henry Hub.
The largest natural gas users in the world (LA’s industrial and power generation use as large as China)
© LSU Center for Energy Studies
Center for Energy Studies
Hurricanes and Energy Production, Processing, and Transportation
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Summary on Impacts of Hurricanes
Hurricanes were incredibly destructive to energy business – effects felt for some time. Was a shining moment for all in the industry.
Hurricanes clearly showed the interrelationship of all types of energy infrastructure in the Gulf – the “4 Ps” – production, processing, pipes, and power.
Hurricanes impacts were felt nationally and internationally – drives home importance of Gulf coast and critical energy infrastructure.
Amazing recovery but still lingering challenges and uncertainties.
This year’s tropical season will be the biggest challenge ever and could serve to be the catalyst for significant movement in prices.
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Platforms/Structures Impacted by 2005 Hurricanes
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Landfall 20 14 34 54 74 94 114 134 154 174 194 214
Lo
st P
rod
uct
ion
p
erc
en
t of t
ota
l GO
M
Ivan - Crude OilIvan - Natural GasKatrina/Rita - Crude OilKatrina/Rita - Natural Gas
Note: Shut-in statistics for Ivan were no longer reported after 150 days. The last shut-in statistics for Katrina and Rita were published on May 3, 2006 (the 221st day after Katrina made landfall).Source: Minerals Management Service
Estimated Return of Existing Crude Oiland Natural Gas Production
As of May 3, 2006 shut in crude oil production was 324,445 barrels per day, or 21.6 percent of daily GOM production. Shut-in gas production was 1.295 bcf per
day, or 13.0 percent of daily GOM production
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Total Immediate Refinery Impact
LA/MS/AL Gulf Coast Refiners(reduced runs and shutdowns)
2,528 mbbl/day15% of US operating capacity
Port Arthur/Lake Charles(reduced runs and
supply loss)775 mbbl/day
5% of US operatingcapacity
Total Refinery Impact4,931 mbbl/day
30% of US operating capacity
Remaining US Operating Capacity
12,075 mbbl/day70% of US operating capacity
Source: Energy Information Administration, Department of Energy
Midwest(reduced runs –
supplied by Capline Pipeline)1,628 mbbl/day
10% of US operating capacity
Port Arthur/Lake Charles(shutdowns and damaged facilities)
1,715 mbbl/day10% of US operating capacity Houston/Texas City
(shutdowns and damaged facilities)
2,292 mbbl/d13.5% of US
operating capacity
Corpus Christi(shutdown andreduced runs)706 mbbl/day
4% of US operating capacity
Midwest(reduced runs from
supply loss)338 mbbl/day
2% of USoperating capacity
Remaining US Operating Capacity
11,954 mbbl/day70% of US operating capacity
Total Refinery Impact5,052 mbbl/day
30% of US operating capacity
Hurricane Katrina Hurricane Rita
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Refineries Shutdown Due to Katrina
CapacityRefinery Location (bbls/day)
1 Calcasieu Refining Lake Charles, LA 30,000 2 Calumet Lubricants Cotton Valley, LA 13,020 3 Calumet Lubricants Princeton, LA 8,300 4 Calumet Shreveport Shreveport, LA 35,000 5 Chalmette Refining Chalmette, LA 187,200 6 Citgo Petroleum Lake Charles, LA 324,300 7 ConocoPhillips Belle Chasse, LA 247,000 8 ConocoPhillips Westlake, LA 239,400 9 ExxonMobil Baton Rouge, LA 493,500
10 Marathon Ashland Petroleum Garyville, LA 245,000 11 Motiva Enterprises Convent, LA 235,000 12 Motiva Enterprises Norco, LA 226,500 13 Murphy Oil Meraux, LA 120,000 14 Placid Refining Co Port Allen, LA 48,500 15 Shell Chemical Saint Rose, LA 55,000 16 Valero Energy Krotz Springs, LA 80,000 17 Valero St. Charles Refinery Norco, LA 185,003 18 Chevron USA Pascagoula, MS 325,000
© LSU Center for Energy Studies
Center for Energy Studies
Crude and Product Pipelines Impacted by Katrina
© LSU Center for Energy Studies
Center for Energy Studies
Critical Terminals Impacted by Katrina
© LSU Center for Energy Studies
Center for Energy Studies
Critical Electricity Transmission Lines Impacted by Katrina
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Center for Energy Studies
Critical Terminals and the Power-Pipeline Infrastructure
© LSU Center for Energy Studies
Center for Energy Studies
Source: American Petroleum Institute
Gasoline Price IncreasesAugust 30, 2005 to September 6, 2005
20
25
20
18
45
35
38
33
32
42
38
40
45
20
52
45
4935
49
50
3536
36 42 40
4246
56
66
58
58 6161
6160
56
5855
42
5254
< 25
25-50
> 50
Colonial / Plantation Pipeline Systems
60.154.9
5146.9
39.5 38.5
25.3
44.7
0
10
20
30
40
50
60
70
Mid
-Atl
an
tic
No
rth
ea
st
So
uth
Atl
an
tic
Mid
we
st
So
uth
Mo
un
tain
We
st
US
Regional Changes in Gasoline Prices(cents per gallon)
35
4244
44
24
24
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Number of Natural Gas Processing Facilities Out
Source: Oil and Gas Journal; Energy Information Administration, Department of Energy
Outages at gas processing facilities throughout all of south Louisiana was one of the more unique aspects of the combined hurricanes.
© LSU Center for Energy Studies
GasState/Company Facility Capacity
(MMcf/d)
AlabamaDuke Energy Field Services Mobile Bay 600.0 Shell Western E P Inc Yellowhammer 200.0
LouisianaEast Louisiana PlantsVenice Energy Services Co LLC Venice 1,300.0 Enterprise Products Operating LP Toca 1,100.0 Dynegy Midstream Services LP Yscloskey 1,850.0
West Louisiana PlantsDynegy Midstream Services LP Barracuda 225.0 Dynegy Midstream Services LP Stingray 305.0 BP PLC Grand Chenier 600.0 Williams Cos Johnson Bayou 425.0 Gulf Terra Energy Partners LP Sabine Pass 300.0
Central Louisiana PlantsAmerada Hess Corp Sea Robin 900.0 Duke Energy Field Services Patterson II Gas Plant 500.0 Dynegy Midstream Services LP Lowry 300.0 Enterprise Products Operating LP Calumet 1,600.0 Enterprise Products Operating LP Neptune 650.0 Gulf Terra Energy Partners LP Cow Island 500.0 Gulf Terra Energy Partners LP Pelican 325.0 Marathon Oil Co Burns Point 200.0 Norcen Explorer Patterson 600.0
MississippiBP PLC Pascagoula 1,000.0
TOTAL 13,480.0 TOTAL GOM CAPACITY 20,285.0 PERCENT OF TOTAL GOM 66.5%
© LSU Center for Energy Studies
Center for Energy Studies
Power Outages From Hurricanes
Source: Entergy Corp.
Damage to power infrastructure (transmission) extensive. Restoration was monumental and impressive, but still created “nervous” moments for other energy infrastructure.
© LSU Center for Energy Studies
0
200
400
600
800
1,000
1,200
LF 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46
Katrina LandfallRita Landfall
85% Restored*
Day 14 Day 38
Return to Service CustomersExtended Outage Customers
Day 47
Landfall
Oct. 15
© LSU Center for Energy Studies
Center for Energy Studies
Examples of Energy Infrastructure Damage
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Shell Mars Tension Leg Platform
Source: Shell.com
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Shell Mars Tension Leg Platform
Source: Shell.com
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Ocean WarwickDauphin Island, AL
© LSU Center for Energy Studies
Source: Rigzone.com
© LSU Center for Energy Studies
Center for Energy Studies
Semi-Sub Stuck Under BridgeNorth Mobile Bay
© LSU Center for Energy Studies
Source: Rigzone.com
© LSU Center for Energy Studies
Center for Energy Studies
Venice Port, Supply & Crew Bases
© LSU Center for Energy Studies
Source: LIOGA
© LSU Center for Energy Studies
Center for Energy Studies
Chevron RefineryPascagoula, MS
© LSU Center for Energy Studies
Source: Chevron
© LSU Center for Energy Studies
Center for Energy Studies
Air Products Facility – Normal DayNew Orleans, Louisiana (Intracoastal Drive)
© LSU Center for Energy Studies
Source: Air Products
© LSU Center for Energy Studies
Center for Energy Studies
Air Products Facility – During Hurricane KatrinaNew Orleans, Louisiana
© LSU Center for Energy Studies
Source: Air Products
© LSU Center for Energy Studies
Center for Energy Studies
Air Products Facility – Post Hurricane Katrina
New Orleans, Louisiana
© LSU Center for Energy Studies
Source: Air Products
© LSU Center for Energy Studies
Center for Energy Studies
Power OutagesGenerating Stations – Entergy Patterson
Source: Entergy
© LSU Center for Energy Studies
Center for Energy Studies
Power OutagesSubstation Damage
Source: Entergy
© LSU Center for Energy Studies
Center for Energy Studies
Then,Along Comes Rita
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Henry Hub, September 25, 2005
Source: LIOGA
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Entergy Transmission
Source: Entergy.com
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Citgo Refinery – Storage TankLake Charles, Louisiana
Post-Rita
© LSU Center for Energy StudiesSource: Citgo
© LSU Center for Energy Studies
Center for Energy Studies
Citgo Refinery – Onsite DockLake Charles, Louisiana
Post-Rita
© LSU Center for Energy Studies
Source: Citgo
© LSU Center for Energy Studies
Center for Energy Studies
Citgo Refinery – Cooling TowerLake Charles, Louisiana
Post-Rita
© LSU Center for Energy Studies
Source: Citgo
© LSU Center for Energy Studies
Center for Energy Studies
Citgo Refinery – Tent CityLake Charles, Louisiana
Post-Rita
© LSU Center for Energy Studies
Source: Citgo
Facility rental of $3.5 million for 3 weeks – for 250 employees – roughly $156 per day per person
© LSU Center for Energy Studies
Center for Energy Studies
Natural Gas Pipeline Leak
Source: MMS
© LSU Center for Energy Studies
© LSU Center for Energy Studies
Center for Energy Studies
Chevron Typhoon TLP
© LSU Center for Energy Studies
Source: Chevron, Rigzone.com
© LSU Center for Energy Studies
Center for Energy Studies
Proven System Resiliency
All refineries seriously impacted by the hurricane are operational (some at reduced rates).
Most gas pipelines have been repaired or alternative routes/service has been secured for most shippers.
All petrochemical facilities are operational.
All service basis and ports are operational. Some in MS at 70-80 percent capacity.
Electricity restored to all homes that can take service within 2 weeks (some 2.7 million without power Day 1 after Hurricane Katrina)
To date, all but one gas processing facility is back on line.
Most all crude oil production and natural gas production is back on line in GOM
-- Crude oil shut-in: 227 MBbls/d (15 percent).-- Natural gas shut-in: 1.1 Bcf/d (11 percent).
© LSU Center for Energy Studies
Center for Energy Studies
Conclusions
GOM region has played an important historic role in the development of energy infrastructure. Not likely to change despite hurricane activity.
Hurricanes proved that the region, its workforce, and the underlying assets are resilient and can be restored quickly, even in the face of two natural disasters.
Some concerns about “diversifying” energy infrastructure in the region. Given current economic challenges it could “diversify” to other parts of the world, and actually increase US vulnerability, not decrease it.
© LSU Center for Energy Studies
Center for Energy Studies
Questions, Comments, & Discussion
www.enrg.lsu.edu