Demand Response News
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Will Isaac Affect Gas Prices?
Exactly seven years ago, our nation experienced the devastating effects of Hurricane Katrina. Now, we anxiously wait to see how tropical storm Isaac will turn out as it is expected to reach a Category One or Two level status.
As a precaution, refining companies along the US Gulf Coast have begun to shut down their facilities, including Marathon Petroleum, Valero Energy, BP, Chevron, and Royal Dutch Shell. According to Andrew Lipow, President of Lipow Oil Associates, over 1 million barrels of refining capacity was taken offline this week, which amounts to approximately six percent of our nation’s gasoline production. He also predicts gasoline prices could increase between five and ten cents per gallon over the next few days.
Companies began evacuating personnel from more than half of the 600 production platforms along the Gulf. The Bureau of Safety and Environmental Enforcement claims that roughly 24 percent of US oil production, along with 8 percent of natural gas production, has already been affected by this storm.
Our nation may soon see a jump in prices at the pump unless we take similar measures as we did in 2008. With the Category Two hurricanes Gustav and Ike, our nation avoided price surges by tapping into the Strategic Petroleum Reserve and borrowing 5.4 million barrels of crude oil.
Although Isaac is following a very similar path as Hurricane Katrina, it is predicted to be much less severe. When Katrina hit in 2005, gas prices spiked to a record high and took several months to come back down. For the sake of gas prices and the safety of our nation’s citizens, we can only hope the predictions of Isaac are true.
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Energy Curtailment Specialists, Inc.