The U.S. Coast Guard worked Monday to open part of the Houston Ship Channel, home to 11 percent of the nation’s refining capacity, as crews contain and clean up a 4,000-barrel fuel oil spill.
Exxon Mobil Corp. said it reduced rates at its 560,500-barrel-a-day refinery in Baytown, Texas, because of the closing caused by Saturday’s accident. Valero Energy Corp., Marathon Petroleum Corp. and Royal Dutch Shell Plc also own all or part of refineries on the 52-mile shipping lane. The combined capacity is 2.1 million barrels a day, said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
“The impacts are delays in crude deliveries and shipping out of gasoline and diesel,” Lipow said. “A closure of four to five days becomes serious. Refiners don’t have enough crude on hand or storage of finished products for that long a delay.”
There were 93 vessels waiting Monday to move through the Houston Ship Channel, 56 outbound and 37 inbound, Coast Guard Lt. Sam Danus said. The channel is closed from just north of Texas City down to its entrance at Bolivar.
The delay was also causing headaches for cruise ship operators and passengers.
Tammy Phillips, 42, of North Little Rock said her seven-day Carnival cruise to Jamaica, Grand Cayman and Cozumel was scheduled to depart Sunday, but the oil spill delayed the trip and shortened it to six days, no longer making a stop in Jamaica. Phillips said she is traveling with a group of 15 people - including her husband and son - from central Arkansas.
She said Carnival will credit the group for the day it lost and for Jamaican port charges.
As of 4:45 p.m. Monday, the Carnival Magic had not left Galveston, Phillips said. The group boarded the ship at 8:30 a.m.
“We moved 150 yards, and that’s it,” Phillips said. Passengers were told that Carnival had to “clean more oil off of the boat before we go out into the Gulf. So we have no idea what time we are supposed to leave,” Phillips said.
Gretchen Jackson, 37, of North Little Rock was set to sail on a five-day cruise starting Monday at Galveston.
She received a text message from Carnival informing her that her ship, the Carnival Triumph, was delayed “due to ship traffic caused by an oil spill over the weekend.”
Jackson, traveling with her son and group of about 50 high school seniors from North Little Rock, said the group was set to board the ship between 5:30 and 8 p.m. Monday.
In past years, fog has closed the channel for days at a time, and closing for an oil spill will have the same effect, said Greg Bram, senior vice president of supply chain for Valero.
Refiners can use more domestic crude from pipelines when shipments are delayed, Bram said. Valero has two refineries on the channel, in Texas City and Houston, with combined capacity of more than 300,000 barrels a day.
The spill occurred when a barge being towed by the vessel Miss Susan was struck by the 585-foot bulk carrier Summer Wind, causing one of the barge’s six tanks to leak fuel oil, the Coast Guard said. The collision occurred at 12:35 p.m. The fuel from the remaining five tanks has been transferred, and the vessel will be moved to a local shipyard, the Coast Guard said.
Workers have refloated the barge, whose tanks were carrying 22,000 barrels of ship fuel when the collision occurred near Texas City, Lt. j.g. Kristopher Kidd, a spokesman for the Coast Guard, said Monday.
There were six collisions in the channel last year, Coast Guard data show. Incidents closed the waterway for 26 hours in 2013, compared with 5.5 hours in 2012 and 157.2hours in 2011. An average day on the channel in 2013 saw 38 tankers, 22 freighters, one cruise ship, 345 tows, six public vessels, 297 ferries, 25 other transits and 75 ships in port.
The Coast Guard is also working to allow the Bolivar ferry to run between the eastern portion of Galveston Island and the Bolivar Peninsula, Danus said.
The spill may pose a risk to migratory birds who have their habitat on both shores of the channel, The Associated Press reported, citing Richard Gibbons, the conservation director of the Houston Audubon Society. Seven oiled birds have been found. Three were dead and four were transferred to a wildlife rehabilitation facility in Baytown, according to Coast Guard spokesman Danus.
The vessel was identified as Kirby Barge 27706, according to the Port of Houston Authority. Kirby Inland Marine LP, the company that owns the Miss Susan and the barge, declined to comment Monday when reached by phone.
There were more than 30 recovery craft on site Monday, up from 24 at the start of Sunday, Kidd said. Some worked through the night, aided by containment booms stretching for more than 69,000 feet, the Coast Guard said.
The estimated economic effect of closing the channel is an $330 million a day, according to the port authority.
“This is like a hurricane or a tropical storm,” said Peter Fasullo, a principal at Houston-based energy consultant EnVantage Inc. “The ship channel could be shut for several days or even a week.”
In 2013, an average of 2.15 million barrels a day of products such as gasoline and diesel fuel were exported from the Gulf Coast, and 3.76 million barrels of day of crude were imported, according to the Energy Information Administration.
Information for this article was contributed by Bradley Olson, Dan Murtaugh, Isaac Arnsdorf and Anthony DiPaola of Bloomberg News and Jessica Seaman of the Arkansas Democrat-Gazette.
Business, Pages 23 on 03/25/2014