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Ida Inflicts ‘Catastrophic’ Damage To New Orleans Power Grid — Residents Told To Prep For 6 Weeks In The Dark

By News Creatives Authors , in Business , at August 30, 2021

The day after Hurricane Ida barreled through the region with 150-mph, winds, the people of New Orleans and Louisiana’s coastal parishes are facing the prospect of weeks without electricity and air conditioning. 

Cat 4 Ida inflicted what power company Entergy

refers to as “catastrophic transmission damage” as thousands of trees and power poles have been felled across 10 parishes. More than 750,000 customers are without power, and have been warned of “extended power outages” that in outlying parishes could last six weeks

The most dramatic power grid destruction involved the crumpling of towers that used to suspend high-voltage lines over the Mississippi River. According to parish emergency managers, all traffic on the river has been halted until crews can fish the lines out of the river. 

Analysts at Goldman Sachs

this morning recalled that the last time Entergy got walloped by a hurricane the cost to ratepayers was in excess of $2 billion. 

There were scattered reports of breached levees in southern parishes, but none so far in New Orleans proper, or the Lower Ninth Ward district that was so decimated by flooding following Hurricane Katrina, exactly 16 years ago today. Since then, the 350 mile system of locks, gates, pumps and levees protecting New Orleans has seen nearly $15 billion of modernization. This was a good test; Ida’s storm surge was so strong that it swept over Grand Isle with 15 feet of water and temporarily reversed the direction of the mighty Mississippi. 

Back up power for the city’s pump houses appeared to be functional. Even under normal conditions pumps work around the clock to remove water that seeps into the low-lying bowl of New Orleans. The city urged residents to limit usage of sinks and toilets at home in order to prevent sewage backup. Orleans’ levees got a $14.5 billion upgrade. Will they hold?

Many of the region’s oil refineries closed, knocking more than 2 million barrels per day of refining offline. Marathon Petroleum

, Phillips 66

, Valero and Shell all shut down plants, while others are at reduced rates. Out in the Gulf of Mexico, 90 oil and gas production platforms shut in their operations and evacuated ahead of the storm. More than 95% of Gulf output is offline, amounting to 1.74 million barrels per day (16% of U.S. today). But so far it’s not oil prices rising on the supply disruption, but rather gasoline, up 6%. Robert Yawger, director of energy futures at Mizuho explains that, “if the refinery is closed, you can’t make gasoline, and if you can’t make gasoline, you don’t need the crude oil to make gasoline.” Further complicating matters for energy traders, the Colonial Pipeline company had shut two lines carrying gasoline and diesel across the impacted area. 

Post-hurricane refining outages can last weeks or months, as Houston saw after Hurricane Harvey four years ago. This will open up the opportunity for refining companies unexposed to the region to benefit from wider profit margins. Both Jason Gabelman, analyst at Cowen & Co.

, and Manav Gupta of Credit Suisse, recommended HollyFrontier

as a potential beneficiary. Gupta also likes Chevron

, which saw its Gulf Coast refining and petrochem assets nearly untouched by Ida.

One bright spot after the storm — Royal Dutch Shell was quickly able to dispel rumors from early Sunday afternoon that its Mars platform had become unmoored by Ida. Hurricane Katrina’s waves 16 years ago had knocked Mars sideways, but this time around it emerged upright.


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