| Global Insight Perspective | | | | Significance | The authorities have finally managed to bring troops and other rescue workers in in force, after agonising delays that cost the lives of many left without water and food for up to a week. | | Implications | The chaotic initial response by the authorities has placed the rattled administration on the defensive, and a blame game has started between officials. Emergency measures to release oil supplies have staved off a crisis on this front, although the toll on the US economy is still too early to assess accurately. | | Outlook | It will take years for the aftermath of the hurricane to be dealt with. Even a week after the storm, the authorities are still focused on search and rescue. Rebuilding New Orleans - if indeed this is feasible - and ensuring those displaced can recover their livelihoods is a mammoth and hugely expensive task. | Reinforcements Arrive After long days when the world's only superpower proved unable to transport sufficient personnel to the centre of one of its own cities, the situation has now improved considerably. The main refuges at New Orleans' Convention Center and Superdome are now largely empty. These had become hellish places as supplies ran out, sanitary conditions became dangerous and violence escalated. Now the focus is upon rescuing survivors from other buildings, many of whom have been waiting on rooftops in baking heat for days. In addition, only now are the authorities starting to collect bodies of the dead. It seems several thousand have died, but there are no official estimates as yet. A string of towns along the Gulf Coast is similarly devastated, and some areas have yet to be reached by any rescuers. The death toll in Mississippi so far stands at 161. Coping with some one million evacuees is a huge problem for other states and refuges are overflowing. Authorities in Texas say they have almost reached the limit of how many they can accommodate. People are being sent further and further afield, and many people are helping out by putting up survivors in their homes. The security situation is also now much improved in New Orleans and other towns. In previous days security problems hampered rescue efforts and there were many harrowing stories of gangs running amok. At least five people were shot and killed in New Orleans yesterday by police after they opened fire on contractors crossing a bridge. A growing problem is the state of police officers and firemen themselves, exhausted and traumatised after working day and night. Many are being moved out of the city and replaced by reinforcements. Two officers have committed suicide and a significant number handed in their badges. Engineers are meanwhile starting to address the huge challenge of shoring up New Orleans' levees and draining the city. Causeways are being built from the land to transport heavy machinery and certain gaps in the levees are being blocked with steel sheets. Other breaches are being left open to allow water to flow out. A number of the pumping stations should be possible to restart soon, while others will need to be re-equipped. It will take weeks to complete this process, however, and there is always the fear that further hurricanes could undo progress. Electricity should meanwhile be restored to parts of the city that are not submerged within days. Oil Fears Recede, for Now One of the biggest worries in the wake of the hurricane was the impact that huge disruption to hydrocarbon production and refining could have on supplies and prices. The latter jumped to new highs initially, but thanks to international efforts, they have fallen back once more. Crucially, the International Energy Agency (IEA) decided to release 60 million barrels of crude oil and products from strategic stockpiles held by member nations, and this was immediately reflected in the international oil market, as prices fell by more than US$1/barrel. This is only the second time that the IEA has taken the decision to release stock from its strategic reserves since the 1991 Gulf War. Supplies from strategic stocks held by member countries are expected to begin to make their way to the US from around mid-September. With no spare refining capacity in the world to make up for the shortages in the US, the decision to release refined products has been the most expedient way to tackle the effects of Hurricane Katrina, which had already started to spill over the US's borders. For the moment, the decision has stabilised the market to some extent, and crude prices are not expected to rise as sharply, except if there is some other disruption to international oil supplies. However, the US hurricane season is yet to complete its course, and further hurricanes could delay the restarting of production in the Gulf Coast and keep prices at higher levels for longer than expected. Meanwhile, significant progress has been made towards easing some of the logistical constraints that had restricted the flow of imported crude to the US. The Louisiana Offshore Oil Port, responsible for about 10% of US crude imports, has started operating at upwards of 75% of its capacity. Deliveries to the Capline Pipeline, which supplies refineries in the US Midwest, were expected to have commenced yesterday. The Colonial Pipeline, which takes crude from the US Gulf Coast to the East Coast and New York, has started operating at up to 60% of its capacity and is expected to be operating at up to 86% this week. The Plantation and Dixie Pipeline systems, which take crude to Washington and North Carolina, are currently operating at about 25% and 40% of their capacity. However, the refining sector continues to battle the problems caused by the hurricane. Although four of the closed refineries, including Motiva Enterprises' refinery in Convent, with a capacity of 235,000 barrels per day (b/d), and Marathon's 245,000-b/d Garyville refinery, have begun to restart production, at least four are reportedly likely to remain shut for weeks. Valero's 185,000-b/d refinery in Norco is expected to be operational within the next two to three weeks. Although Chevron has stated that its 325,000-b/d Pascagoula refinery in Mississippi has been protected from serious damage, the US Energy Department reports that that refinery and ConocoPhillips's 255,000-b/d Alliance Refinery in Louisiana have suffered 'major damage'. To make up for the continued shortages, some of the operational US refineries are also planning to delay planned maintenance, which could keep US refining capacity up to 200,000 b/d higher than is typical for September. Administration Scrambles to Stem Political Damage The horrific scenes from New Orleans have provoked heavy criticism of the federal authorities and President George W. Bush himself. This is on a number of levels, ranging from the initial speed of response, to the consequences of environmental policies and the diversion of resources to Iraq. Bush and his cabinet members have now pulled out all the stops to show they are doing all they can. Bush is travelling to Baton Rouge today, the headquarters of Louisiana's relief efforts, and will also visit Poplarville, Mississippi. Last week he toured Biloxi, Mississippi and New Orleans. Others in the region include Secretary of State Condoleezza Rice and Defense Secretary Donald Rumsfeld. Former presidents George Bush Senior and Bill Clinton are also flying in today, and are charged with leading a huge fund-raising effort for the evacuees. Offers of aid have meanwhile poured in from around the world. A number of European and Asian countries are donating emergency equipment and supplies, as well as wider financial assistance. Much of the anger over the federal response has arisen because of the administration's initial attempts to paint a rosier picture of the situation, and the broken promises to survivors about when aid would arrive. Officials' assurances that the response was going well contrasted starkly with news footage of the chaos in New Orleans. Now officials admit that the response left a great deal to be desired and that planning had been insufficient. One key problem has been confusion over who is in charge, whether at federal, state or local level, and who had to authorise different parts of the operation. Communication was also much more difficult than it should have been, with emergency systems succumbing quickly to the floodwaters. Homeland Security Secretary Michael Chertoff has now conceded that in future the federal authorities need to take 'more of an upfront role earlier on, when we have these truly ultracatastrophes'. He faces great criticism over the poor response of the Federal Emergency Management Agency (FEMA), which is accused of being over-bureaucratic and blocking some aid reaching the scene. It is argued that FEMA has become too concerned with terrorist attacks at the expense of natural disasters. Louisiana Governor Kathleen Babineaux Blanco has come in for a lot of criticism herself, notably for refusing to share authority over National Guard forces with the federal authorities. A number of senators are now calling for an independent national commission to examine lessons from the relief effort. Democrats are proposing that FEMA is removed from the Department of Homeland Security and restored to its previous status as an independent agency with cabinet-level status. Chertoff argues that now is not the time to get involved in these discussions. However, he will find it hard to resist the strident calls for someone to take responsibility for chaos that has potentially claimed thousands more lives than should have been. Outlook and Implications The way the disaster has unfolded has stunned people in the US and around the world. The delays in reaching survivors and the poor co-ordination contrasted with everyone's image of a highly effective and well-resourced superpower. In the authorities' defence, the scale was unprecedented and it is difficult to appreciate the huge efforts that were going on behind the scenes. Nonetheless, everyone now concedes that things could have been handled better. After the initial relief operation is complete there will be a huge inquiry into quite what went wrong and what must be done in future to prevent a repeat. | |
