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  • Mississippi-River Flooding Threatens Louisiana Oil, Natural-Gas Production 0 comments
    May 13, 2011 11:51 AM | about stocks: CHK, DVN, EOG, APC, SWN, SD, HK, KMI, WMB
    By Brian K. Sullivan and Joe Carroll - May 13, 2011

    The rising floodwaters of the Mississippi River, threatening towns and farms between Memphis and the Gulf of Mexico, may affect 10 percent of Louisiana’s onshore crude oil production.

    A total of 2,264 oil wells are responsible for about 19,000 barrels of crude a day, said Matt Ross, communications director for the Louisiana Oil and Gas Association. He said 150 companies are preparing for flooding in a four-parish area in the southern part of the state.

    As much as 252.6 million cubic feet a day of gas may be threatened, said Anna Dearmon, a spokeswoman for the Louisiana Department of Natural Resources, along with operations at 10 Louisiana refineries that account for about 14 percent of U.S. operating capacity.

    For weeks, the Mississippi and Ohio rivers, swollen by heavy rain and melted snow, have been inundating cities and towns, flooding cropland and disrupting shipping. The Ohio rose to 61.72 feet (18.8 meters), a record in Cairo, Illinois, before joining the Mississippi there.

    The threat of that flood reaching Baton Rouge and New Orleans has the Mississippi River Commission considering opening the 125 gates of the Morganza Floodway. Built in 1954, and only used in 1973, the floodway would release 600,000 cubic feet of water per second into central Louisiana and the Atchafalaya River, taking pressure off the Mississippi and the cities downstream, according to the U.S. Army Corps of Engineers.

    Watching River Volume

    The decision will be made if the flow at Louisiana’s Red River Landing north of Baton Rouge reaches 1.5 million cubic feet per second, said Ricky Boyette, a corps spokesman. The flow has now reached at 1.48 million cubic feet per second.

    Another reason the benchmark of 1.5 million cubic feet per second is crucial is because that is the flow levees in Baton Rouge have been designed to withstand, said Bryan Harmon, deputy director of the public works department.

    The Mississippi river system was engineered by the corps to absorb a major flood while maintaining maximum flow rates through Baton Rouge and New Orleans to ensure the integrity of levees, according to the corps. In addition to the 1.5 mmcf in Baton Rouge, a rate of 1.25 mmcf per second is the maximum flow the corps wants to allow through New Orleans, said Ken Holdren, a corps spokesman.

    River Diversion

    When the river flows exceed that, the system is designed to have water diverted elsewhere, such as the Morganza or the Bonnet Carre spillway outside New Orleans, he said.

    The river commission is monitoring the flow through Red River Landing and will make a decision to open Morganza within the next few days, said Pam Vedros, a spokeswoman for the group.

    The Mississippi crested earlier this week in Memphis at 47.87 feet, just under the record 48.7 feet set in 1937, and threatens to set more high-water marks before the flow splits in Louisiana, with 70 percent remaining in its channel and 30 percent running down the Atchafalaya. Cities and towns on both waterways are preparing for flooding.

    City workers in Baton Rouge, Louisiana’s capital, have placed two miles of orange tubing filled with water on top of an earth and concrete levee to raise it above the expected record 47.5-foot crest the National Weather Service says may arrive by May 22.

    “It’s been a grueling two-and-a-half to three weeks for us,” Mayor Melvin “Kip” Holdren said to a crowd of more than 200 at a public meeting yesterday. “If there is a breach in the levee, we’re going to have some problems.”

    Bonnet Carre

    The Corps of Engineers already opened the Bonnet Carre Spillway upstream from New Orleans to siphon Mississippi water into Lake Pontchartrain.

    “This is the biggest train wreck in the history of Louisiana, but it’s the slowest train wreck in the history of Louisiana,” said Ryan Heck, who sells pumps for Hertz Service Pump & Compressor in Baton Rouge. He said his business is booming.

    Before the high water hits Louisiana, it has to travel past Mississippi, where officials are watching tributary flooding in the fertile Delta region in the northwestern corner of the state.

    In Vicksburg, Mississippi, workers at the Rainbow Casino Hotel stacked sandbags to shield it from the river, while 7 feet of water washed into the entrance to Caesars Entertainment Corp.’s Harrah’s Tunica, Mississippi’s largest casino.

    Mississippi Casinos

    The flood has shut 17 of Mississippi’s 19 river-based casinos in the U.S.’s third-largest gaming-employment market, jeopardizing thousands of jobs and $13 million a month in taxes. Flooding will slow the state’s recovery from a recession two years ago, already lagging behind the U.S., said Sohini Chowdhury, an economist with Moody’s Analytics in West Chester, Pennsylvania.

    “There is no doubt that the casino closures will weigh on the state’s recovery,” Chowdhury said. “A month of inactivity would deprive the already cash-strapped local and state governments of critical funds.”

    Louisiana Governor Bobby Jindal said the Mississippi may flood 3 million acres in southern Louisiana, affecting more than 20,000 people.

    As many as 3,900 people may be affected above the spillway, Jindal said. A century-old secondary levee in northeastern Louisiana was overrun by water for the first time, threatening 10,000 acres of farmland, the Monroe News Star reported yesterday.

    ‘Comfort’ for City

    Opening the Morganza probably will mean the river won’t rise as high as forecast in Baton Rouge, although it may only be a foot lower, Harmon said.

    “We think it would give us a great deal of comfort it they open that,” said William Daniel, interim director of the department.

    The river is expected to crest at 19.5 feet in New Orleans, which is protected by levees to 20 feet, unless the spillway is used, according to the Corps of Engineers.

    Themes: natural gas, refining, oil, energy, floodwaters Stocks: CHK, DVN, EOG, APC, SWN, SD, HK, KMI, WMB
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