Gulf oil spill could reach Louisiana Offshore Oil Port next week

By The Associated Press
May 07, 2010, 2:16PM

The LOOP marine terminal, shown here in 2007, is 18 miles offshore in 110 feet of Gulf of Mexico water south of Port Fourchon

Oil gushing from a blown-out well at the bottom of the Gulf of Mexico could force closure of the Louisiana Offshore Oil Port next week, authorities said Friday.

The port, known as LOOP, is a platform off the Louisiana coast about 80 miles southwest of New Orleans. It is one of the leading facilities for imported oil, handling up to 1.2 million barrels a day and feeding half the nation's refinery capacity.

Tankers that are too large to enter the Mississippi River pull up to the facility and hook into a pipeline system that sends their oil to onshore refineries, including those lining the Mississippi north of New Orleans.

Current projections show the oil spill from the Deepwater Horizon disaster could reach the port next week, said Sale Sittig, director of the Louisiana Oil Terminal Authority, an oversight body for LOOP.

"It definitely could be shut down if the heavy oil gets in the vicinity of the platform," Sittig said.

The Coast Guard would determine whether LOOP would be shut down. The port has never closed for an extended period since its inception in the 1970s, though it has closed briefly for hurricanes.

A long closure almost certainly would send gasoline prices higher, Sittig said.

"We're open, we're operational," said LOOP spokeswoman Barb Hesterman. She said the Coast Guard currently has no plans to shut the port.

Phil Flynn, energy analyst with PFG Best in Chicago, said temporary LOOP shutdowns in the past haven't moved prices much.

"A short-term closure, might support prices for the short term but would not have a lasting impact," he said.

If the port were to close for a longer period, the federal government could order oil drawn from the Strategic Petroleum Reserve, he said.

Flynn said the biggest worry is shipping through the Mississippi's Southwest Pass, where finished gasoline and other fuels move out in small tankers for U.S. ports.

Interruption or delay in those supplies also could push gasoline prices up, he said. So far, the pass has remained open though officials are making preparations to scrub oily ships that might come into the river, a process that could back up ship traffic. As of midday Friday, port officials said traffic was flowing normally on the Mississippi.

Flynn said gasoline supplies are more than ample now, giving some breathing room in case of supply interruptions.

On Friday, oil traded around $76 a barrel, down from an 18-month high of $87.15 on Monday.

An Associated Press team saw a heavy band of putrid, orange and rust-colored oil snake its way into the LOOP security zone Thursday about 30 miles off Grand Isle. LOOP has a heavily guarded security zone. The AP team was not allowed to enter the security zone, which is patrolled by security ships.

Satellite imagery confirmed Friday that oil is moving west of the Mississippi River delta.

Late Thursday, the Louisiana Department of Wildlife and Fisheries ordered immediate closure of shrimp harvesting in state waters from South Pass of the Mississippi to the eastern shore of Four Bayous Pass just east of Grand Isle.

Earlier, state officials closed territorial waters east of the Mississippi and a federal fishing ban outside of state territorial waters is in effect from the mouth of the Mississippi east to an area south of Pensacola, Fla.