THE UNIVERSITY DAILY KANSAN
MONDAY SEPTEMBER 15 2008
NEWS
5A
ECONOMY
Ike causes gas prices to rise
HOUSTON — Pump prices jumped above $5 per gallon in some parts of the country Sunday as Hurricane Ike, which caused less destruction than feared, left refineries and pipelines idled and destroyed at least 10 offshore platforms in the Gulf of Mexico.
at gas pumps,
with disparities
of more than
$1 a gallon in
some states,
and even on
some blocks.
Far beyond areas struck directly by high winds and flooding, Ike left behind it a bizarre pattern of prices
"We're on the other side of the looking glass," said Claire Raines, who lives near Knoxville.
Tenn. "I just passed three gas stations with prices that ran from about $3.50 to close to $5 within walking distance."
"I just passed three gas stations with prices that ran from about $3.50 to close to $5 within walking distance."
Average prices exceeded $4 per gallon in Illinois, Indiana, Michigan, South Carolina, Hawaii and Alaska, according to auto club AAA, the Oil Price Information Service and Wright Express.
States fed directly by refineries along the Gulf Coast were particularly hard hit and supply may be sporadic for the next few weeks with refineries shut down, said Tom Kloza, chief oil analyst with the Oil Price Information Service.
A station in Knoxville, Tenn., was asking $5.19 for a gallon of regular gas. In Nashville, about 180 miles away, gas was going for $3.50.
Whatever pain is being felt at U.S. gas pumps will likely be a very brief phenomenon, analysts say. The dour drumbeat of the global economy has the vast majority of traders believing the world has lost its appetite for high-priced crude and gasoline.
CLAIRE RAINES
Knoxville, Tenn., resident
"You've got to work harder," he said.
Hurricane Ike appears to have destroyed a number of production platforms and damaged some of the pipelines in the Gulf of Mexico, federal officials said Sunday.
The pain was immediate, however, for 22-year-old college student Isaiah James. He bought four gallons of gas at $3.99 near the Columbus, Ohio, suburb of Worthington.
Fly-overs revealed that at least 10 production platforms were destroyed by the storm, said Lars Herbst, regional director for the
U. S. Minerals Management Service.
"It's too early to say if it's close to Katrina- and Rita-type damage," Herbst said.
The MMS says Hurricane Katrina destroyed 44
platforms three years ago, and soon after Hurricane Rita destroyed 64
Herbst stressed the assessments were preliminary, but the damage appeared far worse than that caused by Hurricane Gustav two weeks ago.
Specifics about the size and
specific production capacity of the destroyed platforms were not immediately available.
H er b s t said the aerial inspections showed like damaged several large pipelines, but the extent of
to platforms in the Gulf would keep prices up for long.
"It's not a big deal in the economy we see working in the oil market," he said.
The wave of higher gas prices across large sections of the U.S. stood in stark contrast to the direction of crude and gasoline futures Sunday on the New York Mercantile Exchange.
Nymex held a special trading session because of trader concerns over Ike.
The crude sell-off came two days after a barrel of oil dropped below $100 for the first time since April 2.
Wendy Wolfinger, left, and her daughter Krystal, right, fill gasoline containers Friday, at the Meijer gas station on East Michigan Avenue in Jackson, Mich. With miths of gas prices rising as high as $6 per gallon, Wolfinger filled her vehicle, as well as seven containers.
The price for a bar of light,
sweet crude tumbled $2.43 to
$98.75.
Gasoline futures fell more than 11 cents to $2.65.
Overnight, retail gasoline prices nationwide rose an average of more than 6 cents for a gallon of regular gasoline, to $3.79, according to auto club AAA, the Oil Price Information Service and Wright Express.
There was limited production between storms, but that ended as like approached.
Overnight changes in the national average for gas are usually measured by tenths of a cent.
Kloza said it's unlikely damage
"Gulf Coast pipelines that carry crude oil and refined products to other parts of the country are also experiencing outages ..."
Since just before Gustav's arrival two weeks ago, nearly 100 percent of Gulf Coast crude production has stopped, or about 1.3 million barrels per day. About 98 percent of all natural gas production is on hold.
VALERO ENERGY CORP. North America's largest refiner
the damage was not known, nor whether they carried oil or natural gas.
ASSOCIATED PRESS
Shell said Sunday the majority of its stations in the Houston, Galveston and Beaumont areas remained closed.
Meanwhile, two weeks after Hurricane Gustav shut down produce-
tion and closed a dozen refineries in Louisiana, those same companies were sending out crews Sunday to assess damage. The upper Texas coast is home to about one-fifth of the nation's petroleum refining capacity, and any prolonged disruption could severely crimp gasoline supplies.
However, because of ongoing damage assessments and uncertainty about how long it will take to get power restored, refiners were
unable to say when they'd be able to resume production of gasoline and other fuels.
The Gulf also accounts for 25 percent of domestic oil production and 15 percent of natural gas output. That production was nearly 100 percent shut down Sunday, though Shell and some other producers had begun restaffing platforms and other offshore facilities that were not in Ike's path.
More than half of Texas' 28 refineries have been shut down because of like.
Valero Energy Corp., North America's largest refiner, said crews had found no significant structural damage at facilities in Houston, Texas City and Port Arthur.
The company said it had no timetable for when production would resume.
"Gulf Coast pipelines that carry crude oil and refined products to other parts of the country are also experiencing outages, which will further complicate the supply situation," Valero said.
ECONOMY
ASSOCIATED PRESS
A homeless man sleeps near a fountain in Beverly Hills, Calif., Wednesday. The homeless in Beverly Hills present an incongruous sight amid the shows of superfluous wealth, but they've become fixtures of city life, underscoring the pervasiveness of the huge homeless population in Los Angeles County. Some 88,000 people live on the streets or in shelters, making the county the nation's capital of homelessness.
Los Angeles' lifestyles of the rich and homeless
ASSOCIATED PRESS
There are handouts of $2,000 and bottles of Dom Perignon, lucky finds of Gucci shoes and diamond-encrusted bracelets, a chance to rub shoulders with rich and famous locals such as Mark Wahlberg and Master P, even empty houses to live in.
BEVERLY HILLS, Calif. — Being homeless in this upper crust enclave is not exactly like living on the street in other places.
"This is the finest place you can be," said Isaac Young, an affable 59-year-old with a wide grin and a smooth baritone voice who has been homeless in Beverly Hills since 1992.
In this manicured community of 35,000, Rolls Royces and Lamborghini glide around city streets, movie stars live in gated mansions and Rodeo Drive price tags provoke gasps from tourists.
They're an incongruous sight amid the shows of superfluous wealth, underscoring the pervasiveness of the huge homeless population in Los Angeles County. Some
But the city also features about 30 rather scruffy residents who live in parks, bus shelters and alleyways.
But the homeless in Beverly Hills have direct access to something most street dwellers do not: rich people, who can afford to be pretty generous. They pull up in Porsches and SUVs offering trays of cooked food, designer clothing still in dry-cleaner plastic and odd jobs.
"They have a sympathetic thing for us and we're grateful for it," said a man with grizzled hair pulling a train of wheeled suitcases, an office chair and a stroller piled high with a motley bunch of items found in the trash. He would only identify himself as "Bond."
"Homelessness is just all over, even Beverly Hills," said John Joel Roberts, chief of Path Partners, which provides street outreach services.
74,000 people live on the streets or in shelters, making the county the nation's capital of homelessness.
George, a lanky man who pedals a bicycle around town and sleeps on a building roof, said parapazzi and parking valets can be a problem when he panhandles outside celebrity haunts. But being close to wealth can lead to $100 handouts, or finds such as gold jewelry, video cameras and an Armiani suit.