Just upriver from New Orleans, there are a number of oil refineries and chemical plants, stretching almost all the way to Baton Rouge. The refineries and plants are situated very close to the Mississippi River, which is used for transporting products to and from these facilities. Very convenient. They’ve been there for as long as I can remember and have survived river floods before, though some did sustain damage from Hurricane Katrina, which is a different scenario altogether.
I was a little surprised to learn that there has been some minor flooding at some other refineries in southeast Louisiana, which aren’t situated along the river. According to an article in Bizmology today: “West of New Orleans, Marathon Oil reported some minor flooding at its 436,000-barrels-per-day Clarksville, Louisiana refinery, causing minor supply problems. Other refineries east of New Orleans and in Baton Rouge, belonging to Exxon Mobil and Murphy Oil, are reporting that they are monitoring for possible flooding but that all is normal.”
Even though there may be minor flooding of some of the refineries, my major concern is for the barge and tanker traffic on the river, which has been shut down altogether in some places. This is a major disruption. We don’t need anything else driving commodity prices upward right now.
I’ll let the expert speak, however. Here is a link to a video of Andy Lipow, an oil industry expert, speaking from Houston, Texas, on May 9 on Bloomberg. His take on the threat to the refineries is that it is low, but toward the end of the piece, he has a lot to say about barge traffic along the river. He also mentions that there is a small refinery that would be threatened with flooding if the Morganza Spillway has to be opened. Let’s hope it doesn’t.
I wanted to embed the video, but their source code isn’t working for me, so I’ll have to provide the link for you instead.
Here it is: Andy Lipow Interview.