September 09, 2005
Friday

The United States has narrowly averted an energy crisis. Hurricane Katrina's damage to energy facilities in the critical Gulf Coast - 29 percent of domestic oil and 21 percent of natural-gas production - though bad was not as severe as first feared.

Thanks to anticipation and improvisation by energy companies, refineries are being repaired and coming back online. Six refineries forced to cut back are now near full capacity and four that had to shut down completely are expected to be fully operational again next week. But four more that were heavily damaged will be out for several months. The Energy Information Administration expects domestic oil production to be back at pre-Katrina levels in November.

Clearly opening up the Strategic Petroleum Reserve was a wise move, for strengthening both capacity and confidence.

Even beyond the panic buying and self-inflicted gas lines outside the afflicted area, the country did not escape unscathed. Gasoline prices, already high, spiked to European-like heights. The EIA foresees high energy bills this winter, with the Midwest paying as much as 71 percent more for natural gas and the Northeast 31 percent more for heating oil. Aside from the pain those prices inflict on the people paying them, in a consumer-driven economy people will have that much less money to spend in the stores.

Thus, any serious post-Katrina planning has to address how better to protect vulnerable energy facilities and how best to get them up and running quickly after disaster strikes.

The performance of the energy companies - Exxon Mobil, El Paso, Colonial Pipeline, BP and others - inspires confidence. They don't need the government dictating to them, much less, especially after Homeland Security's own less-than-awe-inspiring performance, trying to run the reconstruction.

But clearly there is a government role in an emergency of eliminating red tape and regulatory requirements that may make sense in normal times but not in the aftermath of a hurricane - such things as lifting restrictions on use of foreign tankers, truck weights, docking and construction permits.

The continuity of energy production may not be the sexiest post-Katrina problem, but it is one that must be addressed and - here's a happy thought - it doesn't involve the dreaded finger-pointing and blame game.

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