Akaka views damages to Gulf Coast’s oil region
New isle gas price caps are scheduled to be posted today
Federal officials, including U.S. Sen. Daniel Akaka, toured the Gulf Coast yesterday to assess the damage caused by hurricanes Katrina and Rita while in Hawaii motorists waited to see how the oil-producing region's slow recovery would affect gas prices.
New price caps on wholesale gasoline are scheduled to be posted today by the Public Utilities Commission. The caps -- a maximum at which wholesale gas can be sold in Hawaii -- are based on the average of spot prices in three mainland markets.
Hawaii's statewide average for regular unleaded, which has been the highest in the country in recent weeks, was at $3.25 a gallon yesterday, 31 cents above the national average, according to AAA's Fuel Gauge Report.
While prices at the pump have steadily increased nationwide in the past two weeks, analysts say they are likely to start falling again as higher costs and the end of the summer travel season prompt less driving.
Demand for gasoline in the four weeks ended Sept. 23 was 2.8 percent below a year earlier, according to the U.S. Energy Department. The data show that hurricanes Katrina and Rita are interrupting growth in U.S. fuel consumption for the first time since the Sept. 11, 2001, terrorist attacks.
"We're going to see prices move lower," said Peter Beutel, an energy consultant and president of Cameron Hanover Inc. in New Canaan, Conn.
"We've already hit this economy with a huge, huge shock," he added, predicting the economic blow will translate into lower gasoline consumption.
Markets also are expected to stabilize after assurances that the nation's oil supply should remain steady, analysts said.
This week, U.S. Energy Secretary Samuel Bodman said the government was "prepared to do what is necessary with strategic reserves" -- a response to a question about the U.S. Northeast emergency heating oil inventory.
Also, the Paris-based International Energy Agency has said it would consider releasing additional petroleum supplies to help the U.S. avert an energy crisis in the aftermath of back-to-back hurricanes that crimped oil and natural gas production in the Gulf of Mexico.
Still, the U.S. Minerals Management Service said yesterday that 90 percent of the region's daily oil production remains shut, while 72 percent of its daily natural gas output is down.
One big issue, analysts say, is the loss of Gulf Coast refining capacity needed to manufacture gasoline, heating oil and jet fuel. Twelve refineries accounting for about 3 million barrels a day, or 18 percent, of U.S. refining capacity remain shut in the aftermath of Katrina and Rita.
Analysts are waiting for a U.S. petroleum inventories report due later in the week for fuller details of the impact of the hurricanes.
Federal lawmakers who traveled to the region this week are scheduled to discuss their findings tomorrow at a Senate Energy Committee hearing.
"This visit gives us a first-hand look at how bad our energy situation is especially as gas prices continue to rise across the country," Akaka (D, Hawaii) said in a statement. Akaka is a senior member of the Energy and Natural Resources Committee, and the Homeland Security and Governmental Affairs Committee.
Akaka, along with Democratic Sen. Jeff Bingaman and Republican Sen. Pete Domenici, both of New Mexico, and Louisiana Democratic Sen. Mary Landrieu, toured an ExxonMobil refinery near Baton Rouge and Colonial Pipeline facilities yesterday.
Earlier in the week, the senators were in Texas for briefings on industry recovery efforts.
The Associated Press and Bloomberg News contributed to this report.