September 16, 2005—Hurricane Katrina’s devastation in the Gulf states is currently driving fuel prices to record levels, but according to DOE’s Energy Information Administration (EIA), the impact on winter heating bills may be worse.
The EIA’s “Short Term Energy Outlook” for September, highlights three scenarios for recovering from the hurricane: a slow, medium, and fast recovery. Focusing on the “medium recovery” scenario, gasoline prices will average near $3 per gallon for September, but should drop to an average of $2.58 per gallon for the fourth quarter of 2005, the report says.
Hurricane Katrina caused significant direct damage to offshore rigs, refineries, pipelines, and ports in the Gulf of Mexico , with wide-scale electricity outages and flooding exacerbating the already devastated infrastructure, compounded by the evacuation of thousands of employees, notes the report.
The EIA’s first look at winter heating costs contains a great deal of uncertainty, but tight supplies combined with the growing energy demand in winter are expected to keep fuel prices high. To see the report, visit the EIA Web site.
