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Hurricane Ida Hit An Important Oil And Gas Hub, Which Will Likely Drive Up Gas Prices

ARI SHAPIRO, HOST:

Hurricane Ida has severely disrupted the lives of people who live in southeastern Louisiana with power failures, cellphone outages and closed businesses. But the storm also wreaked havoc on the region's biggest industry - oil and gas. Ida's ferocious winds and storm surge made a direct hit on Port Fourchon, the nation's most important hub for the offshore industry in the Gulf of Mexico. NPR's John Burnett reports.

JOHN BURNETT, BYLINE: If you look at a map of Louisiana, the coastline is a vast watery landscape of marshes, swamps, bays, rivers, bayous and barrier islands - as the license plate slogan says, a sportsman's paradise. But this is also a hardworking coast, especially the area clobbered by Hurricane Ida. How bad is it?

MIKE MONCLA: I mean, that is a huge lick to our state and the nation.

BURNETT: Mike Moncla is president of the Louisiana Oil & Gas Association. More than 250 companies with a stake in the Gulf depend on Port Fourchon.

MONCLA: Twelve hundred trucks per day use Highway 1 that goes to the port down there. To not be able to get oilfield services to those ports is definitely going to hurt our industry and hurt the state.

BURNETT: Ninety percent of the Gulf's production platforms and drilling rigs are serviced out of Port Fourchon. Moreover, 15% of the nation's oil and 5% of its natural gas comes from deposits under the Gulf seabed. One state study projects that a 90-day closure of Port Fourchon would result in a nearly $8 billion reduction in the U.S. Gross Domestic Product.

SHUBHRA MISRA: Port Fourchon is the major hub for all of the Gulf in terms of production, in terms of operations, both offshore and onshore.

BURNETT: Shubra Misra is a senior research scientist with the Water Institute of the Gulf in Baton Rouge.

MISRA: If a facility like Port Fourchon is damaged, the entire supply chain gets interrupted with the corresponding economic impacts.

BURNETT: Supply vessels can't move. Crews don't get shuttle to the rigs. Manufacturing and maintenance halts. Onshore production and processing facilities can't get raw crude and natural gas through pipelines. Everyone interviewed for this report agrees the shutdown of Port Fourchon will likely drive up the price of crude and the cost of gas at the pump. The destruction is going to be massive. Sustained winds of 150 miles per hour, with one gust clocked at 172, were felt at the port, which is the southernmost settlement on the Louisiana coast. Drone video shows Louisiana Highway 1, the only road in and out of the port, is buckled, crumbling and sunken.

With climate change warming the Gulf and making hurricanes even more violent, the offshore industry faces certain challenges, says Alex Colker, an oceanographer at the Louisiana Universities Marine Consortium.

ALEX KOLKER: Our threats are increasing as we see more frequent storms, more intense storms and higher water levels. And the coast is receding, and that land loss makes this area more vulnerable. So we've got just a multitude of threats that increase the exposure of this area.

BURNETT: Sixteen years ago, Hurricane Katrina heavily damaged a Shell Oil platform and capsized a deepwater platform belonging to Chevron. And some offshore facilities still haven't resumed operations since Tropical Storm Cristobal last year. Again, Mike Moncla, with the Louisiana Oil & Gas Association.

MONCLA: Every time we have a hurricane that ravages through those platforms and beats them up, it's a difficult recovery.

BURNETT: Oil companies have been forced to invest in their offshore infrastructure to make it more resilient against ever-stronger Gulf storms. The same goes for onshore facilities, from supply hubs like Port Fourchon to vulnerable refineries and petrochemical plants that are clustered along the coast in Texas and Louisiana. Royal Dutch Shell reports that it's Norco refinery, just west of New Orleans, had lost power and sustained major flooding because of Ida.

The long-term effects from Hurricane Ida will also be felt in corporate boardrooms far from the muggy coastline of the Gulf. As more intense and more frequent storms continue to pound offshore oil and gas facilities, industry experts say shale fields like the Permian Basin in West Texas become more attractive to investors.

John Burnett, NPR News, New Orleans.

(SOUNDBITE OF TRENT REZNOR AND ATTICUS ROSS' "ALMOST HOME") Transcript provided by NPR, Copyright NPR.