Gustav another setback for opponents of offshore drilling

NY Times:

Waves of relief rather than water washed over the oil patch after Hurricane Gustav’s punch appeared to be much less powerful than those of Hurricanes Rita and Katrina three years ago.

“I don’t know if there was a cheer, but there were plenty of smiles,” Don Pirolo, a ConocoPhillips refinery manager, said of the employees gathered at the company’s emergency operations center here. The crackers, fruit and soft drinks served at the center “taste a lot better today.”

From initial reports, the storm appeared to leave production platforms and refineries essentially unharmed, meaning that oil and gas supplies would not be disrupted and prices at the pump may continue to ease in the days ahead.

At the least, oil experts said the risk of a sharp price spike appeared to have faded, unless flooding or power failures have a lasting impact on refineries and port facilities over the coming days.

“We dodged the bullet,” said Darron Granger, a senior vice president at Cheniere Energy, a Houston-based company that imports liquefied natural gas and explores for oil and gas in the Gulf of Mexico. “This is probably not going to have any impact on any oil or gas supply.”

News of the weakening storm calmed oil and gas markets, sending prices sharply lower. Crude futures on the New York Mercantile Exchange dropped $4.06 on Monday to $111.40 for a barrel of oil, its lowest level since spring and almost $36 below the July 11 record of $147.27.

Natural gas prices fell nearly 6 percent, to $7.48 per million British thermal units. AAA reported that the average national price for unleaded gasoline of $3.69 held steady on Monday despite the storm threat, holiday weekend driving and the giant evacuation in the Gulf Coast.

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While the story talks about the weakening storm, it was not weak when it passed over the offshore rigs. Early indications are that they weathered the storm and no environmental disaster occurred. Nancy Pelosi is committed to ignorance on this subject and will probably still attempt to block drilling in any meaningful way, but note how the price reacted to the fact that things would get back to normal. The price would drop even further if she and the wackos would get out of the way of drilling.