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September 21, 2005
Rita Energy Update
By: Rowan
Watching CNN, Rita is headed straight for the major oil and gas platforms in the Gulf. According to an energy consultant they had on, Katrina had only hit a "glancing" blow on the platforms, but it took out over 100 - many still not up. There are about 136 platforms and 26 refineries dead in the sights of Rita. According to another CNN report, South Texas Project nuclear power plant which serves 1 million customers are preparing to shut down. If Rita maintains its course and strength, gas prices could hit $5 a gallon, natural gas, heating oil, and diesel prices could skyrocket - again.
Since the refineries out of Texas fuel much of the bread basket of the country, increased diesel costs will hit the corn and wheat - and everything tied to them (including the massive sugar industry). Winter heating costs are already predicted to climb as much as 71% in some areas - Rita could push that much higher. That is bad news across the country where the issue of inequality has finally made the front page.
A significant increase in heating costs will stretch even the middle class budget. When you add the increasing cost of everything else in this oil-based economy, then the pain from this hurricane season will be felt long after the names of the hurricanes fade from the news entirely. However, the impact of those on (or over) the economic edge will be devastating.
Currently Washington is focused on rebuilding the Gulf coast - not the economic devastation that is lurking around the corner. They really need to be thinking a month or two down the road as they consider what they are going to cut to fund the (currently) $200 billion initial costs.
Posted by Rowan at September 21, 2005 11:38 AM Category: Peak Oil --- Social Implications