Gustav no Katrina; gas and electric outages may linger

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Hurricane Gustav idled fertilizer plants in the NOLA area this past week, but only minor damage was reported. The most damage appeared to be the lost production itself, and the only question was whether it would be for one week or maybe two, as the return of electricity and/or natural gas service appeared to be taking some time.

Initially, Gustav’s net impact appeared to be about a week’s worth of production taken out of the market at area plants due to the pre-Gustav shutdowns. At midweek, sources said that plants that went down Aug. 30-31 were generally on their way back up Sept. 5-7. However, by Thursday night there were some concerns expressed that gas and/or electricity may not be up in time to meet the early next week scenario.

PotashCorp said the Geismar, La., facility continued to be without electrical power as of Sept. 4. The power company indicated that some power would be restored over the weekend, which would help with maintenance activities. The company was hopeful that the plant could resume partial operations early next week and possibly be back to normal operations by week’s end.

Terra Industries Inc.’s best guess on its Donaldsonville, La., ammonia plant’s restart was still early next week. As of Sept. 4, the company was still waiting for electricity to be restored by Entergy. In the meantime, the company was making minor repairs to the plant.

CF Industries Holdings Inc. said Sept. 4 that its giant Donaldsonville complex was still down. Like Terra, the company was still awaiting electricity.

“The local utility is working diligently to repair lines and restore power, but at this point we can’t speculate about the timing of our return to production, the financial impact of the production outage, or the impact on shipments,” Stephen Wilson, CF chairman and CEO, said Sept. 3.

The Mosaic Co.’s Faustina and Uncle Sam plants were also down. Mississippi Phosphates, at Pascagoula, Miss., which incurred the most damage during Hurricane Katrina, also reportedly went down and was in the process of coming back up last week.

Given the extreme volatility of the fertilizer market this year, you could have argued that such a rash of outages would give a boost to prices. While urea barges appeared to be up slightly, DAP continued to soften.

By Sept. 4, river conditions had improved and vessels were able to enter the Port of New Orleans regardless of draft from mile marker 303 to mile marker 20. According to the U.S. Coast Guard, there were still some restrictions at Pascagoula. Conditions at Houston, Galveston, and Texas City were normal.

Weather analysts said Gustav would have a positive impact on the corn crop as it headed toward the heartland. “August was very dry, so the area could use some rain,” explained AccuWeather.com Agriculture Expert Senior Meteorologist Dale Mohler. “A couple of inches from Gustav will help to round out the crops before harvest.”

Hurricane season became more of a parade during the past couple of weeks, and it shows no signs of easing in the peak of the season. On the eastern side of Florida, Hurricane Hanna grew to Category 1 status after sustained winds reached 75 mph, and was expected to turn to a more northerly direction before striking Florida’s East Coast, Georgia, or South Carolina. Right behind Hanna was Ike, which was by far the most dangerous of the season thus far.

Late last week, Hurricane Ike had already reached Category 4 status with sustained winds of 135 mph, and was still in the Atlantic Ocean. Conditions were ripe for continued strengthening. Early forecasts plotted landfall near the Miami area, but if it moves into the Gulf of Mexico, Ike would likely continue to grow. Josephine, which was following on the heels of Ike, was still categorized as a tropical storm late last week, but that was expected to change.