Thursday, September 01, 2005

Concentration of oil resources can be costly in disasters

One lesson of Hurricane Katrina is that the concentration of the nation's oil production has put supplies at risk.

Hurricane Katrina struck the United States at a delicate pressure point: its fuel hub.

Rampaging through the Gulf Coast this week, the hurricane caused devastating damage to a region that's responsible for almost half the nation's domestic crude oil supply and refinery output. The Gulf Coast also serves as the receiving point for about 60 percent of the oil and gas that come from overseas.

The U.S. government said 91 percent of the gulf's oil production was out of commission Wednesday, and analysts said several refineries could be out of service for days, if not weeks.

With California and other parts of the country shying away from oil and gasoline production, the major oil companies are spending billions to develop new production in the gulf - making the nation's energy infrastructure increasingly concentrated.

Perhaps it's time to start considering requiring regional responsibility...