This Financial Times article reports that preliminary assessments of the damage that Hurricane Rita caused to offshore oil and gas drilling and production facilities reflect that the damage is greater any other storm in history.
Rita’s path — which was west of the path of Hurricane Katrina last month — tore through an area of the Gulf of Mexico that contained a large amount of exploratory rig activity. Given the apparent damage to the rigs, the biggest impact from the storm may be that it will exacerbate an already tight market for rigs in the region. As a sign of just how precious rigs are becoming to the market, The Woodlands=-based Anadarko Petroleum Corp., one of the biggest U.S. independent exploration and production companies, raised eyebrows in the energy industry earlier this week by committing to a rig six years in advance.
Oh, how times have changed in the exploration and production business.
Monthly Archives: September 2005
Comparing planning for impending Gulf Coast threats
Joel Kotkin is an Irvine Senior Fellow at the New America Foundation and is the author of The City: A Global History (Modern Library, 2005). In this Opinion Journal op-ed, he compares the disparate preparations of New Orleans and Houston to the two recent hurricanes, and makes several useful recommendations regarding planning for natural disasters and development of urban areas on the Gulf Coast, including the following:
[The Gulf Coast region], with the notable exception of New Orleans, is one of the fastest growing in the U.S. Its relatively low costs and balmy climate have turned it into the “opportunity coast.” Yet clearly the Gulf’s history has shown that ignoring nature has its perils. Few now remember Indianola, south of Houston. Until it was wiped out by hurricanes, first in 1875 and then again in 1886, it was Texas’s second-largest port. Today, most of that city lies under water.
More trouble for DeLay friend?
This NY Times article reports that the Justice Department’s inspector general and the F.B.I. are looking into the November, 2002 demotion of Frederick A. Black, a veteran federal prosecutor whose reassignment shut down a criminal investigation that he had been pursuing of Washington lobbyist Jack Abramoff. Mr. Abramoff is a well-known Washington lobbyist and a major Republican Party fund-raiser who is a close confidant of Houston congressman and House Majority Leader, Tom DeLay. Here are the previous posts relating to a broad corruption investigation of Mr. Abramoff focusing on accusations that he defrauded Indian tribes and their gambling operations out of millions of dollars in lobbying fees.
Rita damage taxes power grid
On the heels of Entergy Corp.’s decision to place its New Orleans subsidiary in bankruptcy last week on the day that Hurricane Rita barreled into the Gulf Coast at the Texas-Louisiana border, the utility is now dealing with serious damage to its power infrastructure that is threatening to stall the recovery effort in East Texas from the storm.
On Monday, Entergy’s Texas subsidiary commenced rolling blackouts in the area of far north Houston that it services, including The Woodlands. The move was made to reduce stress on the utility’s damaged electrical system after Hurricane Rita and related tornadoes downed power lines and disabled most of the utility’s power plants. A total of almost 1.25 million accounts were without power as of Monday in East Texas and Western Louisiana.
What’s really going on over at Texansville?
Kevin Whited over at blogHouston.net has this interesting post chronicling the trial balloons that are being floated out of the Houston Texans’ camp these days as various coaches and management figures attempt to deflect criticism for the team’s absolutely horrendous start to the 2005 season.
Although the Texans have a myriad of problems, it appears reasonably clear that the biggest one is that they do not have enough good players. That problem falls squarely in the lap of General Manager Charlie Casserly, whose golden touch with the media has been much better than his coordination of choosing the team’s players. The good news is that the Texans are almost $10 million under the NFL salary cap. Moreover, even with the almost certain decision at this point to exercise an $8 million option on under-performing QB David Carr’s contract for next season, the Texans should still have plenty of room under next season’s salary cap to attract some good offensive and defensive linemen during this upcoming off-season. The key question that Texans owner Bob McNair has to address is this:
Given the below-average nature of the player selections made to date, should Casserly be in charge of making the next round of player selections for the team?
Throwing money at All the King’s Men
John Fund explores in this OpinionJournal piece the risk that long-standing Louisiana elements of corruption are likely to hijack a good part of the extraordinary amount of federal aid that will be flowing into the state in the wake of Hurricane Katrina. That reality is likely not going to stop or slow the flow of such aid because, as William Easterly points out in this Foreign Policy (pdf) piece, such aid has the following beneficial effect:
The poor have neither the income nor political power to hold anyone accountable for meeting their needs–they are political and economic orphans. The rich-country public knows little about what is happening to the poor on the ground in struggling countries. The wealthy population mainly just wants to know that “something is being done” about such a tragic problem as world poverty. The utopian plans satisfy the “something-is-being-done” needs of the rich-country public, even if they don’t serve the needs of the poor.
Confronted with this confounding state of affairs, Stephen E. Landsburg proposes this innovative choice for spreading the federal aid to the victims of Katrina:
Before we spend $200 billion on New Orleans disaster relief, can we just pause for about three seconds, please? That should be long enough to divide one number by another. The numbers I have in mind are, on the one hand, $200 billion, and, on the other hand, 1 million people—the prestorm population of the New Orleans area, broadly defined.
Two-hundred billion divided by 1 million is 200,000. For the cost of reconstructing New Orleans, the government could simply give $200,000 to every resident of the region—that’s $800,000 for a family of four. Given a choice, which do you think the people down there would prefer?
Based on my anecdotal experience in talking with New Orleans evacuees during Houston’s relief effort, I can say unequivocally that every evacuee would prefer to receive direct aid over throwing federal relief funds into the black hole that is Louisiana state government.
Hat tip to Arnold Kling for the lines to the Easterly and Landsburg pieces.
Mississippi’s AG increases the cost of rebuilding
This previous post explored the role of federally-subsidized flood insurance in attracting capital investment in New Orleans that probably would not have occurred had the owners of the capital been faced with paying the cost of private flood insurance. Until Hurricane Rita developments took us a bit off track, I had been meaning to pass along this NY Times article about a batch of lawsuits by plaintiff’s lawyers and Mississippi Attorney General Jim Hood that seek to eviscerate flood exclusion provisions in homeowner’s liability insurance constracts and make the insurers responsible for damages caused by flooding from Hurricane Katrina For those of us who prefer to pay less rather than more for such insurance, these lawsuits are a real bad idea, as the following and this OpinionJournal piece explain.
Rita’s expected economic waves turn into ripples
It’s been a helluva past month in Houston.
First, the Houston community responded to the worst natural disaster in America in decades by taking in tens of thousands of evacuees (posts here, here and here) from New Orleans and the central Gulf Coast who had almost everything but their lives. Then, as that relief effort was winding down, Houston confronted Hurricane Rita, a category 5 storm bearing down for a direct hit on the city. Implementation of the city’s evacuation plan led to an estimated 2.7 million Houston area residents hitting the road, resulting in unprecedented traffic gridlock and gasoline shortages throughout the region. After Rita veered off to the east to make landfall on the Texas-Louisiana border, Houston is now dealing with the not insubstantial problem of how to have 2.7 million people return to their homes in the region without experiencing the same type of gridlock and shortages that occurred when they left.
Whew!
Does Joe Pendry use the Run ‘N Shoot?
Looks as if Chronicle NFL sportswriter John McClain better avoid political analysis and stick to football.
In the introduction to a column noting that new Texans offensive coordinator Joe Pendry is much more conservative in his offensive philosophy than the just-fired Chris Palmer, McClain makes the following analogy:
“Texans offensive coordinator Joe Pendry has a reputation for being so conservative he makes George W. Bush look like Bill Clinton.”
Thinking about Houston’s evacuation plan
A couple of days ago it was gridlock as an estimated 2.7 million Houstonians evacuated out of fear of Hurricane Rita. Today, it appears that at least a portion of that gridlock is developing coming in the opposite direction as many residents attempt to return to their homes despite a quickly-developed government plan to stagger the return of the evacuees.
During all of this, I have been giving some thought about Houston’s evacuation plan, as reflected by this earlier post. In 1983, Hurricane Alicia — a minimal category 3 storm — made a direct on Houston and Galveston. There was no evacuation to speak of and, thus, no gasoline shortages. The storm killed 22 people and caused damage costing about $4 billion in 2005 dollars. On the other hand, Hurricane Rita — a stronger category 3 storm than Alicia that did not make a direct hit on Houston and Galveston — has already caused more deaths (24 in the Dallas bus crash alone) than Alicia and resulted in a regional gasoline shortage, while the direct costs of the storm will likely be much smaller than Alicia’s.