Damage to oil refineries not as bad as feared

TEXAS CITY, Texas — Hurricane Rita caused some damage to oil refineries near the Texas-Louisiana border and raised the prospect of gasoline shortages and higher prices during the arduous process of restarting refineries all along the Gulf Coast. But it did not cause the widespread destruction of the energy infrastructure that some had feared.

On the edge of this workaday city of refineries and modest ranch houses near Galveston, a flare burned silently from a tower at the large BP refinery on Saturday afternoon, evidence that it was largely unscathed.

Up and down the energy corridor between Galveston and Houston, industry officials said refining locations had managed to avoid extensive damage from the hurricane, which made landfall to the east, near the Louisiana border.

Refineries sat waiting for workers to return to assess their conditions. In Texas City, there were no signs of wind damage or flooding at any refining installations.

Egrets gathered in the marshes in the shadow of refineries and petrochemical complexes owned by energy giants like Valero, BP, Marathon-Ashland and Praxair. A toppled sign from a Phillips 66 gas station was the only indication that a hurricane's edge had passed through.

The situation was less sanguine in and near Port Arthur, Texas, and Lake Charles, La., near the Texas-Louisiana border, where officials said they expected refineries and industrial plants to be out of service longer because of heavy wind damage, power failures and scattered flooding.

Depending on how much of the nation's already stretched refining capacity is affected and for how long, that could cause shortages of gasoline and other fuels and push up retail prices again.

"It looks like we may have dodged some of the bullet in terms of the impact," said John Felmy, chief economist for the American Petroleum Institute. "It certainly is better than if it had hit some of the bigger refining centers."

Chuck Dunlap, who rode out the storm with 50 others at Pasadena Refining Systems, just outside Houston, said that at first glance, his plant and other facilities in the area appeared to have sustained limited damage. But even so, it will take a few days for his plant, which normally processes about 100,000 barrels of crude oil a day, to return to full speed.

"We are actually walking through the plant and doing a more detailed inspection," said Dunlap, the refinery's president. "We won't be at full operations till midweek."