Engineering News

Katrina hit natgas plants need military help-group
Fri Sep 16, 2005 01:48 PM ET

WASHINGTON, Sept 16 (Reuters) - The U.S. government should dispatch military amphibious units to help hurricane-hit natural gas processing plants keep gas supplies flowing to U.S. homes and industries, the American Chemistry Council said on Friday.

"As part of the hurricane recovery process, we are looking to Congress and the administration to lead a national effort to curb natural gas consumption, free up new supplies and invest in new energy sources," the trade group said. Chemical plants depend on natural gas supplies.

Energy market analysts have expressed concern that about 5 billion cubic feet per day of natural gas processing plant capacity was knocked out of service by Katrina. The hurricane slammed into Louisiana and Mississippi on Aug. 29 after churning through the Gulf of Mexico.

Processing plants are used to purify natural gas production from the Gulf of Mexico to prepare it for shipment to industrial and residential users.

"Damaged processing plants are an enormous bottleneck in the system," the trade group said in a statement.

Amphibious units operated by the U.S. Navy, Coast Guard or Army Corps of Engineers are needed to help the damaged processing plants on the Louisiana coast, the group said. It did not elaborate.

Dow Chemical Co. on Thursday, said it would seek price increases across its entire portfolio of chemical and plastic products to offset the impact of rising energy prices.

The American Chemistry Council also asked Congress to temporarily suspend the federal anti-pollution programs for acid rain and nitrogen oxides so that electricity utilities can switch from costly natural gas to cheaper coal as fuel for their plants.

"The suspension might cause individual companies to exceed their annual or seasonal emission allocation/budget, and they need federal assurance that this would be acceptable before they would make the fuel switch," the group said.

The Senate Environment Committee said on Thursday it was preparing legislation to suspend environmental regulations as a way to help companies and communities recover from the hurricane.

On Wall Street, share prices of several coal companies rose on Friday. Fording was up 5 percent, Peabody rose by 4.7 percent and Arch Coal was up 4.4 percent in early afternoon trading.

The chemistry trade group also called for Congress to do the following:

* Lift a ban on drilling in some U.S. offshore areas

* Launch a $90 million "public awareness campaign" to encourage Americans to adopt more energy efficient appliances and building materials

* Give cogeneration and combined cycle generators priority access to the U.S. power grid

* Expand investment tax credits for gasification technology

Source: Reuters

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