DALLAS – The Texas refinery belt largely dodged Hurricane Rita as the Category 3 storm swerved far enough away from the assets of the Houston Ship Channel.

For consumers, Friday’s gas shortages eased in the Dallas area on Saturday, as tankers cut through traffic congestion to refuel pumps. Prices, however, began creeping up within a range of $2.69 to $2.99 a gallon for unleaded fuel, according to an informal survey by The Dallas Morning News.

And come Monday when Wall Street energy traders assess damage and delays in the start-up of refineries, gasoline futures could move upward and take pump prices with them.

“We dodged a large canon shell,” said Peyton Feltus, an energy trader who runs Randolph Risk Management of Dallas.

“Given that Houston was spared, I don’t think we are going to have as much a disruption in flow as we did with Katrina,” he said.

Four weeks after Katrina hit, four refineries in Louisiana and Mississippi remain closed. They had output of more than 800,000 barrels per day.

But Feltus said gasoline prices could climb by as much as 50 cents, in the coming weeks. “We will be more likely to be above $3 for the rest of the year, rather than below,” he said.

While Rita lashed its fury at an area sparsely populated with people, the Gulf Coast is covered by a dense and steely spider web of petroleum infrastructure. It includes oil platforms in the sea, pipelines on land and in water, and refineries capable of making valuable, creamy diesel from a low-cost barrel of sulfur-dense oil.

The nation’s biggest refinery, run by ExxonMobil

Corp. of Irving, is located on the Houston Ship Channel, which extends nearly 50 miles inward from Galveston Bay.

A safety assessment of its Baytown area refineries and chemical plants was completed Saturday and a restart of operations was planned, the company said in a statement. ExxonMobil didn’t give a precise time for the restart of the Baytown complex, which includes the giant refinery takes in 557,000 barrels-a-day.

Valero Energy Corp., however, said it will take two weeks to a month to repair and restart its 255,000-barrel-per-day refinery at Port Arthur, where the eye of the storm passed. That refinery sustained “significant damage to two cooling towers and a flare stack,” according to an Associated Press report.

Valero is the nation’s largest refiner. Its big operations in Houston, Corpus Christi and Texas City largely escaped Rita’s path. Saturday, BP PLC said that it was accessing Rita’s impact at its large refinery at Texas City, near Galveston Bay. It said that “recovery/restart” is unknown, in a statement.

With the downgrading of Rita’s wind velocity and its swerving path toward the Texas-Louisiana border, gasoline future prices dipped on Friday. Gasoline for October delivery, closed down 5.38 cents, or 2.5 percent, at $2.0856 a gallon. Gasoline futures were still up 17 percent for the week, in anticipation of the hurricane and the virtual shutdown of the petroleum industry on the nation’s Gulf Coast.

Many consumers were willing to buy gasoline at any price in the Dallas area. Saturday afternoon, Menkin Bostic, a Houston evacuee, had to make two stops at gas stations near Dallas’ Central Expressway before she found unleaded fuel for her Honda SUV. The fuel at the Texaco station cost her $2.85 a gallon. The premium grade pumps had been empty since noon on Friday, an attendant said.

“It’s been hard,” Bostic said, but getting fuel in Dallas and along the 12-hour route from Houston hadn’t been one of her family’s problems. “I’ve been blessed in that way.”

At a nearby Shell station, the lowest priced unleaded fuel was sold out by Saturday noon, said station attendant Muluken Gebremedhene. Some consumers were miffed. “They get upset and I just smile,” Gebremedhene explained.

“I’m expecting more,” he said, pausing, “well, maybe.” In Austin, Gov. Rick Perry called Saturday on fuel terminal owners and operators to begin refueling service stations as quickly as possible.

“As more than 2.5 million evacuees from Hurricane Rita prepare to head back home, we need to ensure there are adequate fuel supplies along the routes,” Perry said in a special announcement to fuel terminal operators.

“If you will open your terminal throughout this weekend, we can begin refueling service stations along the major roadways.”

(END OPTIONAL TRIM)

Against the backdrop of uncertainty over the energy supply of the nation, industry officials began to talk about conservation.

Conservation could make a big difference, said Feltus, the energy trader, whose family has long roots in the oil industry of Louisiana and Mississippi. “A small change in consumption habits can offset the problems in lack of supply,” Feltus said. “We really need to see a reaction like that. There is no alternative. No one can fix this for us except the consumer.”

And this past week, ExxonMobil, the nation’s largest energy company, punctuated the point. At its Web site read a message: “Although we can’t control the weather, we can manage the effects by working together. We ask that you use fuel wisely.”



(c) 2005, The Dallas Morning News.

Visit The Dallas Morning News on the World Wide Web at http://www.dallasnews.com/

Distributed by Knight Ridder/Tribune Information Services.

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GRAPHICS (from KRT Graphics, 202-383-6064):

20050924 RITA path

20050924 RITA damage

AP-NY-09-24-05 2009EDT


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