Hurricane Gustav & Ike Impacts to U.S. Petroleum Supply and Infrastructure Jeremy J. Cusimano Office of Petroleum Reserves Washington, DC

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1 Click to edit Master title style Hurricane Gustav & Ike Impacts to U.S. Petroleum Supply and Infrastructure Jeremy J. Cusimano Office of Petroleum Reserves Washington, DC

2 Hurricane Gustav and Ike Impacts Click to to U.S. edit Petroleum Master Supply title style CAPACITY 1,9 MB/D CAPACITY 2,166 MB/D CAPACITY 2,341 MB/D Beaumont Lake Charles Baton Rouge Houston Texas City Port Arthur New Orleans Hurricane Ike Hurricane Gustav GULF OF MEXICO 2

3 Click to edit Master title style Hurricane Gustav September 1, 28 3

4 U.S. Gulf Refinery Status Click to Gustav edit Master Impacts title style There are 33 U.S. Gulf Coast Refineries with a refining capacity of 7.5 million barrels per day. This represents 42% of total U.S. refining capacity. Mississippi River, LA Lake Charles, LA Port Arthur, TX Houston/Texas City, TX Total Gulf Coast Refining Centers Pascagoula, MS Corpus Christi, TX No. of Refineries Gulf Coast Refineries Capacity (B/D) 416, 2,166,16 749, 1,154,5 2,341,5 679, 7,55,71 Gustav Impact (Sep 1, 28) Refineries Shutdown Capacity (B/D) 1,663,16 317,4 232, 2,212,56 4

5 Click to edit Master title style 5 SPR3163.ppt

6 Click to edit Master title style 6 SPR3163.ppt

7 Click to edit Master title style Hurricane Ike September 13, 28 7

8 U.S. Gulf Refinery Status Click to edit Ike Master Impacts title style There are 33 U.S. Gulf Coast Refineries with a refining capacity of 7.5 million barrels per day. This represents 42% of total U.S. refining capacity. Mississippi River, LA Lake Charles, LA Port Arthur, TX Houston/Texas City, TX Total Gulf Coast Refining Centers Pascagoula, MS Corpus Christi, TX No. of Refineries Gulf Coast Refineries Capacity (B/D) 416, 2,166,16 749, 1,154,5 2,341,5 679, 7,55,71 IKE Impact (Sep 13, 28) Refineries Shutdown 2* Capacity (B/D) 482, 78, 1,145, 2,341,5 4,55,5 * Refiners still shut down from Gustav 8

9 Click to edit Master title style 9 SPR3163.ppt

10 Click to edit Master title style 1 SPR3163.ppt

11 HURRICANE IMPACT ON U.S. REFINING CAPACITY 4,5, 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, Shutdown Refinery Capacity (B/D) 9/1 9/3 9/5 9/7 9/9 9/11 9/13 9/15 9/17 9/19 9/21 9/23 9/25 9/27 9/29 1/1 1/3 1/5 1/7 1/9 1/11 Hurricane Gustav Hurricane Ike

12 HURRICANE IMPACT ON U.S. REFINING CAPACITY 4,5, 4,, 3,5, 3,, 2,5, 2,, 1,5, 1,, 5, Shutdown Refinery Capacity (B/D) 9/1 9/3 9/5 9/7 9/9 9/11 9/13 9/15 9/17 9/19 9/21 9/23 9/25 9/27 9/29 1/1 1/3 1/5 1/7 1/9 1/11 1/13 1/15 Miss River Baton Rouge Lake Charles Port Arthur Houston Texas City Freeport Corpus Christi

13 8, 7, 6, 5, 4, 3, 2, 1, Click to edit Master title style 13 Refinery Crude Runs (thousand barrels/day) 8/29 9/28 8/3 8/31 9/1 9/2 9/3 9/4 9/5 9/6 9/7 9/8 9/9 9/1 9/11 9/12 9/13 9/14 9/15 9/16 9/17 9/18 9/19 9/2 9/21 9/22 9/23 9/24 9/25 9/26 9/27 9/29 9/3 1/1 Hurricane Impact on Gulf Coast Refining Runs Mississippi Louisiana Texas Total Refinery Operating Capacity (7,54 ) Pre-Hurricane Refinery Crude Run Level (6,285 MBD) Hurricane Gustav Refining Losses Hurricane IKE Refining Losses

14 Click to edit Master title style ,682 5,63 8,796 11,867 14,682 16,96 18,877 2,794 22,524 24,158 25,779 29,344 33,76 37,967 41,889 45,798 49,652 53,563 57,473 6,766 63,813 66,633 69,185 71,572 73,44 75,233 76,771 78,178 79,586 8,711 81,39 81,91 9, 8, 7, 6, 5, 4, 3, 2, 1, Cumulative Losses in Refinery Runs (Thosand Barrels) 8/3 8/31 9/1 9/2 9/3 9/4 9/5 9/6 9/7 9/8 9/9 9/1 9/11 9/12 9/13 9/14 9/15 9/16 9/17 9/18 9/19 9/2 9/21 9/22 9/23 9/24 9/25 9/26 9/27 9/28 9/29 9/3 1/1 Hurricane Impacts on Gulf Coast Refining Runs

15 Hurricane Impact on Click Gulf to of edit Mexico Master Oil Production title style MMS Daily Reports Recovery Expectation Expectation 75% in 4 weeks Hurricane Gustav Hurricane Ike 8/28 8/29 8/3 8/31 9/1 9/2 9/3 9/4 9/5 9/6 9/7 9/8 9/9 9/1 9/11 9/12 9/13 9/14 9/15 9/16 9/17 9/18 9/19 9/2 9/21 9/22 9/23 9/24 9/25 9/26 9/27 9/28 9/29 9/3 1/1 1/2 1/3 1/4 1/5 1/6 1/7 1/8 1/9 1/1 15 Percentage of Normal Oil Production Available

16 Hurricane Impacts on Click Gulf to of edit Mexico Master Oil Production title style 45, 4, 35, 3, 25, 2, 15, 1, 5, 8/28 8/29 8/3 8/31 9/1 9/2 9/3 9/4 9/5 9/6 9/7 9/8 9/9 9/1 9/11 9/12 9/13 9/14 9/15 9/16 9/17 9/18 9/19 9/2 9/21 9/22 9/23 9/24 9/25 9/26 9/27 9/28 9/29 9/3 1/1 1/2 1/3 1/4 1/5 1/6 1/7 1/8 1/9 1/1 16 Cumulative Losses in Oil Production (Thousand Barrels)

17 Strategic Petroleum Reserve Storage Facilities Click to edit Master title style SEAWAY 3 WTG WTG SUN SUN 1, 1, LION 1 LION 1 EXXONMOBIL EXXONMOBIL 2 2 CAPLINE 4 TEXOMA CAPLINE SEAWAY HOUSTON TEXAS CITY PORT ARTHUR SH 2 BIG HILL 17 MMB LAKE CHARLES WEST HACKBERRY 227 MMB SH 22 BATON ROUGE BAYOU CHOCTAW 76 MMB ST. JAMES NEW ORLEANS LOOP PASCAGOULA SEAWAY LOOP BRYAN MOUND 254 MMB Gulf of Mexico SPR STORAGE SITES SPR SALES POINTS REFINING CENTERS DISTRIBUTION SYSTEMS 17 SPR373.PPT SPR373.PPT

18 Strategic Petroleum Reserve Click to Hurricane edit Master Impacts title style The SPR has 4 Sites in Texas and Louisiana. SPR Site Bryan Mound, TX Big Hill, TX West Hackberry, LA Bayou Choctaw, LA Hurricane Gustav No Impact No Impact No Impact Recovery Time - 5 days Hurricane Ike Recovery Time 6 Days Recovery Time 17 Days Recovery Time 5 Days No Impact Hurricane Gustav - Bayou Choctaw site impacted by regional electrical power electrical power losses. Hurricane Ike - Bryan Mound, Big Hill and West Hackberry sites impacted by regional electrical power losses & storm surge. 18

19 Strategic Petroleum Reserve Click to Crude edit Oil Master Deliveries title style Alon USA Citgo ConocoPhillips Marathon Placid Oil 8, 7, 6, 5, 4, 3, 2, 1, 9/3 9/4 9/5 9/6 9/7 9/8 9/9 9/1 9/11 9/12 9/13 9/14 9/15 9/16 9/17 9/18 9/19 9/2 9/21 9/22 9/23 9/24 9/25 9/26 9/27 9/28 9/29 9/3 1/1 1/2 1/3 1/4 1/5 1/6 1/7 1/8 1/9 1/1 1/11 1/12 1/13 19 SPR Exchange Quantity (Barrels)

20 Strategic Petroleum Reserve Click Response to edit to Supply Master Shortages title style On 9-3-8, the Secretary of Energy authorized the SPR to grant emergency exchanges to address refiner shortages. SPR Site Bryan Mound, TX Big Hill, TX West Hackberry, LA Bayou Choctaw, LA Inventory 24.4 million barrels million barrels million barrels 73.1 million barrels Releases 1. million barrels 4.7 million barrels DOE has approved 1 refinery requests for emergency exchanges (SPR loans) of approximately 5.7 million barrels. The SPR has completed deliveries of approximately 5.4 million barrels (October 13). 2

21 Click H to 2 S edit Scavenger Master Test title style H 2 S scavenger was injected into one delivery of West Hackberry Sour crude oil. H 2 S concentration of West Hackberry Sour is estimated at 85ppm. 85ppm Nalco SULFA-CHECK TM EC985A injected. Successfully reduced H 2 S concentration below 1ppm. 21

22 Click Elevated to edit Master ConCarbon title style Multiple recipients of SPR crude oil from Bayou Choctaw reported ConCarbon numbers that were 2% higher than reported on the published Bayou Choctaw Sweet assay. This was caused by two factors The oil released from Bayou Choctaw was not representative of the entire Bayou Choctaw Sweet stream. The release was predominantly from one cavern. Since the last assay of the Bayou Choctaw Sweet stream, over 4 million barrels of Girassol have been delivered to Bayou Choctaw. Girassol will no longer be acceptable for delivery to the SPR. 22