World Economic

Gasoline prices in the St. Louis area continued to march higher Friday, and further increases may loom as Hurricane Ike headed ashore along the Texas coast, shutting down oil and natural gas platforms, refineries and pipelines.

Among the infrastructure idled is the Explorer Pipeline, a key fuel artery that supplies much of the central United States, including St. Louis.

Part of the 1,400-mile pipeline system from Port Arthur, Texas, to Tulsa, Okla., was shut Thursday, said Tom Jensen, director of operations. The rest of the line, reaching to Hammond, Ind., will suspend operations as soon as existing fuel supplies at an Oklahoma storage tank are exhausted.

The pipeline, which transports up to 630,000 barrels a day of gasoline, diesel and jet fuel, was idled ahead of the storm to give employees time to evacuate and because refineries along the Texas coast that supply it with fuel have halted production.

How long the pipeline takes to restart depends on the availability of fuel and whether it sustains damage. The pipeline also requires electricity to power motors and pumps, Jensen said.

"We’re mobilizing teams now, and we’ll be in Dallas tonight and head to Houston as soon as its safe," he said. "We plan to be operating by Sunday night or Monday morning, assuming there’s product to move and electricity."

Ike is the second gulf storm in two weeks to roil energy markets, and the impact has been far-reaching.

Hurricane Gustav led to a 20-cent increase in gasoline prices in St. Louis area on Labor Day weekend, and Ike already has prompted a 30-cent increase at the pump, said Mike Right, a spokesman for AAA Missouri.

The average price of regular gasoline in St. Louis and surrounding Missouri counties rose more than a dime on Friday to $3.70 a gallon. In the Metro East area, where fuel taxes are higher, the average price was near $4 guaranteed cash advance.

Whether prices exceed records set in mid-July depends largely on the extent of damage to refineries and energy infrastructure in southeast Texas, Right said. The average price in St. Louis reached $3.98 on July 14. Across the river, the average price peaked at $4.20.

By Friday afternoon, more than a dozen oil refineries on the Texas coast had shut down. Collectively, the plants account for almost 3.6 million barrels of oil-processing capacity, or 19 percent of the nation’s total. Most crude oil and natural gas production in the Gulf of Mexico also was idled and hundreds of oil and gas platforms and rigs had been evacuated.

Ike also stopped shipments to the Louisiana Offshore Oil Port, the nation’s largest. The port stopped off-loading oil tankers a couple of days ago because of the storm surge, and crude oil shipments were briefly suspended on Thursday, spokeswoman Barb Hestermann said.

"We’re able to get a little bit of our deliveries going from our onshore storage now, but it remains limited," she said. "

The port, just south of Grand Isle, La., receives about 1.2 million barrels of oil a day, and its storage facilities can hold as much as 53 million barrels of crude oil. Crude is sent to refineries throughout the Gulf Coast and Midwest via pipelines.

Operations at the port were suspended for five days because of Gustav, which hit the coast of Louisiana. No damage was sustained, but the port still was running on backup power when Ike came calling. "We’re operating on generators, and that was part of our problem," Hestermann said. "We had to move the generators to higher ground."

jtomich@post-dispatch.com | 314-340-8320

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