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Economic damage from Ike may be less than feared
2008-09-13
A small change in Hurricane Ike's course just before it crashed into the Texas coast may have spared the state and the nation from significantly worse economic damage. The center of the storm appeared to miss the vital concentration of oil and petrochemical refineries in the Houston area, and the surge of water rolling into the nation's second-largest port was also weaker than predicted. "If the eye of that storm had been as much as 20 miles east, we would have a lot more havoc and damage than we did," said Chris Johnson, a senior vice president at commercial property insurer FM Global. Much of the region's industrial recovery will depend on how quickly power companies can restore electricity; that, in turn, will depend on how quickly the utilities can get employees back to work. "I received a call from one of my employees, who was evacuated to San Antonio. He was just informed that his house was totally destroyed," said Bill Reid, the CEO of Ohmstede, which builds and repairs refineries. Reid, who lives in Kemah, Texas, about 35 miles south of Houston, said his town was without power and water, and still had 15 feet of flooding. The port of Houston, the nation's second-largest, was without power Saturday but expects to reopen Monday morning if the Coast Guard finds no obstacles in the shipping lanes. Some empty cargo containers were blown about, but not too far. "All the terminals did very well and we had only very minor damage, like fencing being blown down," said port spokeswoman Argentina James. Refineries as far east as Louisiana were affected by the storm, however. The tourist island town of Galveston was flooded and office buildings in downtown Houston were damaged, but it could have been worse. "It appears that, at least from our facility and operations standpoint, the impact is a little less than we did anticipate," said Mike Smid, chief executive of trucking company YRC North America, which runs Yellow and Roadway lines. The company evacuated its 900 employees ahead of the storm. Preliminary estimates put the damage at $8 billion or more, but a precise accounting of the storm's wrath was far from complete. Travelers Insurance had teams of adjusters, claims agents and logistics people with laptops and ladders in San Antonio who are planning to leave for Houston Sunday, said spokesman Matthew S. Bordonaro. "It will be some time before we have any damage estimates," said Mike Siemienas, a spokesman for Allstate Corp. "Our focus right now is to get into the hardest-hit areas once it is safe to do so." Retail gasoline prices jumped Saturday based on Ike's collision with refinery rich regions of Texas and Louisiana, threatening to shut down a variety of energy complexes in the Gulf of Mexico for days. Some refineries may remain shut for days, even if there was no serious wind damage or flooding. Gas prices nationwide rose nearly 6 cents a gallon to $3.733, according to industry data. Service stations around Texas and elsewhere raised prices sharply even before the storm hit, and lines to fill up could be seen as far away as Dallas. Ike was about twice the size of Hurricane Gustav, which rammed into the Louisiana shore two weeks ago. While the storm surge was less severe than what had been predicted, National Weather Service officials said a the highest -- a surge of about 13.5 feet -- was seen at Sabine Pass in Texas. The Sabine Pipe Line, a crucial natural gas conduit, has been shut down, according to the CME Group, parent of the New York Mercantile Exchange. Shell Oil said Saturday morning that crews would fly over oil rigs in the Gulf of Mexico Saturday or Sunday to assess damage. The U.S. subsidiary of Royal Dutch Shell PLC said it could take days to weeks before full production could resume at its facilities. Valero Energy Corp. spokesman Bill Day said crews would soon get in to inspect refineries in Houston and Texas City, which remained shut down. Both, plus another refinery in Port Arthur, lost power in the storm, he said. Alcoa said its alumina refinery in Point Comfort, Texas, 125 miles southwest of Houston, will begin the restart process on Sunday. The storm pushed a surge of water through the Houston shipping channel, a complex of oil and petrochemical refineries, and the nation's second-largest port. Windows were ripped out of office buildings in downtown Houston. At the 75-story JPMorganChase tower, the tallest building in Texas, curtains could be seen flapping in the breeze and glass shards littered the streets below. Power was out in much of Houston, although the lights stayed on in the city's huge medical center, a sprawling complex with about a dozen hospitals that attract patients from around the world. Flights in and out of Houston's two major airports were suspended on Friday and not likely to resume until Sunday. Southwest Airlines said it would shut down flights at Dallas Love Field, its home airport, for several hours Saturday as Dallas -- 240 miles north of Houston -- was expected to take a glancing blow from Ike. Officials at Dallas-Fort Worth International Airport, the largest hub for American Airlines, warned that winds and heavy rain could cause delays or cancelations. Air service to smaller cities in Texas, including Corpus Christi and Harlingen, was also disrupted. ___ AP Business Writers David Koenig reported from Dallas, with Ellen Simon in New York. Mark Williams in Bryan, Texas, and John Porretto in Houston contributed to this report.
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