On the heels of this report that New Orleans has lost over 60% of its population since Hurricane Katrina last summer, this NY Times article reports that, despite billions of dollars in federal aid that is available, local New Orleans governmental officials cannot even agree on whether a government plan to faciliate the rebuilding of New Orleans is even being prepared, much less when such a plan will be issued.
Then yesterday, after a weekend of grisly violence, New Orleans Mayor C. Ray Nagin admitted that New Orleans police could not control the city’s crime problems and requested that the state send National Guard troops to help patrol the streets of New Orleans.
Meanwhile, amidst such dire problems, enormous resources are being expended on the civic largesse of supporting the city’s National League Football team.
What a mess.

One of the enduring images of the catastrophic damage that last summer’s hurricanes inflicted on Gulf Coast oil and gas production facilities was the picture to the left of Royal Dutch Shell PLC’s MARS floating production platform (previous posts here and here), which was badly damaged by Hurricane Katrina. As this Washington Post article reports, Shell has finished repairing the huge platform, just in time for this year’s hurricane season. The article goes on to provide a handy overview of the importance of the Gulf Coast oil and gas infrastructure for meeting the nation’s energy needs and the efforts to bolster the ability of that infrastructure to weather the severe storms of hurricane season.
Despite the massive repairs, the main improvement in the MARS platform to protect it from another severe storm is decidedly low-tech — stronger and twice as many clamps to hold the drilling rig to the platform. Those clamps work against vertical and horizontal forces and, during Katrina’s category 4-5 winds (the storm hit shore as a strong cat 3 storm), three inch steel bolts holding the previous clamps were sheared straight through. Although the old clamps had survived many storms, Shell engineers believe that the new ones will work even better.

So, you thought that the Federal Emergency Management Agency’s response to the damage from Hurricane Katrina last year left much to be desired? Well, this NY Times article reports that a recent Congressional investigation has determined that the agency’s relief effort was stellar in comparison to its fraud management policies:

As much as $1.4 billion in government disaster aid to victims of Hurricanes Katrina and Rita ó nearly a quarter of the total ó went to bogus or undeserving victims, a new Congressional investigation concludes. [. . .]
The improper or fraudulent payments went to a dizzying array of con artists or other undeserving recipients, according to the analysis by the Government Accountability Office, which is set to announce its findings at a hearing Wednesday.
In one case, a man stayed more than two months on the government tab at a hotel in Hawaii that cost more than $100 a night. At the same time, he was getting $2,358 in government rent assistance, even though he had not been living in the property he claimed was damaged in the storm.
Emergency aid was used to pay for football tickets, the bill at a Hooters in San Antonio, a $200 bottle of Dom Perignon, “Girls Gone Wild” videos, even an all-inclusive weeklong Caribbean vacation, the report says. More than $5 million went to people who had provided cemeteries or post office boxes as the addresses of their damaged property.
FEMA also provided cash or housing assistance to more than 1,000 prison inmates, totaling millions of dollars; one inmate used a post office box to collect $20,000. . .
In another case, 24 payments, totaling $109,708, were sent to a single apartment, where eight people each submitted requests for aid eight times, each time using their own Social Security numbers.
Another person collected 26 payments using 13 different Social Security numbers ó a total of $139,000 ó even though public records show the individual did not live at any of the addresses reported as damaged. [. . .]
Investigators concluded that fraudulent or improper payments probably ranged from $400 million to $1.4 billion, leading them to settle on $1 billion as their most likely estimate, representing about 16 percent of the distributed aid. [. . .]

Representative Michael McCaul (Rep. Tex.), who is chairman of the House subcommittee that led the inquiry, is not pleased:

“When you have federal and state prisoners applying for the taxpayers’ money ó while they are in prison ó and then the disaster aid, that is a real assault on the American taxpayer,” he said. “I don’t have any tolerance for that.”

This NY Times article reports on two recently-published Census Bureau reports that constitute the findings of the bureau’s first study on the social, financial and demographic impact of the Hurricanes Katrina and Rita last summer on the Gulf Coast region:

After the twin barrages of Hurricanes Katrina and Rita last year, the City of New Orleans emerged nearly 64 percent smaller, having lost an estimated 278,833 residents, . . . Those who remained in the city were significantly more likely to be white, slightly older and a bit more well-off, . . . The bureau found that while New Orleans lost about two-thirds of its population, adjacent St. Bernard Parish dropped a full 95 percent, falling to just 3,361 residents by Jan. 1. [. . .] The black population of the New Orleans metropolitan area fell to 21 percent from 36 percent, the bureau found.
While the New Orleans area lost population, the Houston metropolitan area emerged with more than 130,000 new residents, many of them hurricane evacuees. Whites made up a slightly smaller percentage of Houston’s population ó 62.8 percent of the city in January compared with 64.8 percent last July, a month before Hurricane Katrina hit.
In Harris County, which includes Houston, median household income fell to $43,044 from $44,517, while New Orleans area’s actually rose, to $43,447 from $39,793.

Interestingly, the reports debunk widespread speculation that the New Orleans evacuees who went to nearby Baton Rouge, where the population grew by nearly 15,000, were disproportionately poor. The evacuees who landed in Baton Rouge ended up being more middle-class, while the poorer evacuees ended up going to more distant cities, such as Houston.

With hurricane season officially starting tomorrow, this NY Times article about the research that has been done over the past year into Hurricane Katrina provides some interesting information, including the stages of the storm on the New Orleans metro area:

The first stage of Hurricane Katrina touched Louisiana as it passed south of the city in the Plaquemines Parish town of Buras with winds of more than 125 miles per hour pushing a storm surge. The wind and water overwhelmed the local hurricane defenses: levees built to withstand 13 feet of water were overwhelmed by more than 17 feet of surge, damaging levees and scattering homes and boats across the thinly populated parish like toys.
As the hurricane moved across Lake Borgne to the east, the effect was quite different: the second storm sent strong waves and a surge estimated at 18 feet or more back across the lake to the levees bordering St. Bernard Parish. The long levees there had been designed to handle 13 feet of water. The assault washed over Chalmette and other communities with floodwaters exceeding 14 feet in some areas. A similar pounding took out the southeastern levee of the development known as New Orleans East.
In its third incarnation, the storm sent the water up a funnel formed at the northwest corner of Lake Borgne and into the city’s Inner Harbor Navigation Canal, where the water rose and churned with exceptional force, said Hassan Mashriqui, a researcher with the Louisiana State University Hurricane Center. Those waters shattered flood walls in several places and destroyed the city’s Lower Ninth Ward.
As the storm pushed into Mississippi, it sent a final surge toward New Orleans across Lake Pontchartrain, north of the city. As the water stacked up against the south shore of the lake, it rose against the walls of the three main drainage canals that run from the center of the city. Though the surge was weaker than the others and the water did not reach the tops of the flood walls, the 17th Street Canal and the London Avenue Canal suffered breaches that caused the lake’s waters to spill into the center of the city.

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The Fifth Circuit Court of Appeals, which relocated temporarily to Houston in the aftermath of Hurricane Katrina (earlier posts here and here), issued this press release yesterday in which it made public its plans for returning to New Orleans next month. The court will begin moving back Dec. 16 and will be closed until Jan. 8, during which time only emergency matters will be handled. The court originally had planned to move to Baton Rouge as an intermediate step before returning to its longtime home in New Orleans’ John Minor Wisdom Court of Appeals Building. However, conditions in New Orleans are stable enough to allow the 135 employees of the Court to return home. The Court has been using makeshift work spaces in the Bob Casey U.S. Courthouse in downtown Houston over the past couple of months.

Two and a half months after Hurricane Katrina and the resulting flood hammered New Orleans, this NY Times article notes that the rebuilding of the city is being hampered by a scarcity of labor, a condition that was noted in this earlier post.
Given the massive exodus of people from New Orleans and the relunctance of many former residents to return, my sense is that we are experiencing uncharted waters with regard to the rebuilding of New Orleans. The tremendous loss of jobs almost overnight — particularly from small businesses that were destroyed by the damage from the flood — is unprecedented in the modern United States for an area this large. Inasmuch as most of the jobs that are arising as a result of the reconstruction effort are of a different nature from the ones that were lost, many of the people who left New Orleans are not attracted to return by those new jobs. Consequently, my sense is that the key to real rebirth in the area is the re-creation of small businesses, which is a tricky and slow task.

Given what I endured last night, I’m in the mood for some disaster news.
As noted in this earlier post, BP Global had been going through a difficult stretch earlier this year when Hurricane Dennis (remember that one?) apparently caused the near total collapse of its huge $1 billion Thunder Horse Drilling Platform in the Gulf of Mexico.
Well, never mind about that hurricane excuse.
BP has announced that the collapse was the result of “human error” rather than damage from the hurricane:

“After a thorough investigation, we have concluded that it was not storm-related, but was caused by a design weakness in the ballast system,” Lord Browne of Madingley, BP’s chief executive, said.

Translation: “Attention insurers! Grab your wallets!”

If you were thinking about a holiday vacation in the popular Mexican resorts of Cancun or Cozumel, then you better start considering other alternatives.
As predicted earlier here, reports are now confirming that Hurricane Wilma devastated the Cancun and Cozumel hotels and shopping areas that are at the heart of Mexico’s tourism industry. Hotels in the area will not open for the Christmas season because of the extensive damage, and early indications are that the area will not be in a position to take on large numbers of tourists until at least Easter weekend in 2006. Marriott International Inc. closed its three resorts in Cancun until at least the end of December and the Ritz-Carlton Cancun said it was closing and not taking reservations until the New Year. The two Hyatt Regency hotels will also be closed for at least a month. Hotel damage in Quintana Roo state — where both Cancun and Cozumel are located — is currently estimated at $1.5 billion.

The damage from Hurricane Katrina to the Gulf of Mexico’s oil and gas production facilities has had a huge impact on national and international oil and gas markets over the past two months. However, from a regional standpoint, the biggest economic impact from Katrina has been the loss of thousands of jobs, particularly in small businesses. A couple of recent articles reporting on the latest governmental statistics and reports from lending institutions provide a clearer picture of the extent of the economic carnage.
Two NY Times articles (here and here) from last week report on the extraordinary job losses in the Gulf Coast region resulting from the hurricane and the effect that such job loss is having on cities and financial institutions in the region. Louisiana and Mississippi lost a combined total of 310,000 jobs in September, which raised their unemployment rates to a United States high of 11.5% and 9.6% respectively. These are staggering job losses for the region, and since most the losses are attributable to small businesses that were either uninsured or underinsured in regard to damage from the hurricane, the restoration of those jobs will be a painfully slow process.

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