The Port of Southern Louisiana is the fifth-largest port in the
world in terms of tonnage, and the largest port in the United
States. The only global ports larger are Singapore, Rotterdam,
Shanghai and Hong Kong. It is bigger than Houston, Chiba and Nagoya,
Antwerp and New York/New Jersey. It is a key link in U.S. imports
and exports and critical to the global economy.
The Port of Southern Louisiana stretches up and down the Mississippi
River for about 50 miles, running north and south of New Orleans
from St. James to St. Charles Parish. It is the key port for the
export of grains to the rest of the world -- corn, soybeans, wheat
and animal feed. Midwestern farmers and global consumers depend on
those exports. The United States imports crude oil, petrochemicals,
steel, fertilizers and ores through the port. Fifteen percent of all
U.S. exports by value go through the port. Nearly half of the
exports go to Europe.
The Port of Southern Louisiana is a river port. It depends on the
navigability of the Mississippi River. The Mississippi is notorious
for changing its course, and in southern Louisiana -- indeed along
much of its length -- levees both protect the land from its water
and maintain its course and navigability. Dredging and other
maintenance are constant and necessary to maintain its navigability.
It is fragile.
If New Orleans is hit, the Port of Southern Louisiana, by
definition, also will be hit. No one can predict the precise course
of the storm or its consequences. However, if we speculate on worse-
case scenarios the following consequences jump out:
The port might become in whole or part unusable if levees burst. If
the damage to the river and port facilities could not be repaired
within 30 days when the U.S. harvests are at their peak, the effect
on global agricultural prices could be substantial.
There is a large refinery at Belle Chasse. It is the only refinery
that is seriously threatened by the storm, but if it were to be
inundated, 250,000 barrels per day would go off line. Moreover, the
threat of environmental danger would be substantial.
About 2 percent of world crude production and roughly 25 percent of
U.S.-produced crude comes from the Gulf of Mexico and already is
affected by Katrina. Platforms in the path of Katrina have been
evacuated but others continue pumping. If this follows normal
patterns, most production will be back on line within hours or days.
However, if a Category 5 hurricane (of which there have only been
three others in history) has a different effect, the damage could be
longer lasting. Depending on the effect on the Port of Southern
Louisiana, the ability to ship could be affected.
A narrow, two-lane highway that handles approximately 10,000
vehicles a day, is used for transport of cargo and petroleum
products and provides port access for thousands of employees is
threatened with closure. A closure of as long as two weeks could
rapidly push gasoline prices higher.
At a time when oil prices are in the mid-60-dollar range and
starting to hurt, the hurricane has an obvious effect. However, it
must be borne in mind that the Mississippi remains a key American
shipping route, particularly for the export and import of a variety
of primary commodities from grain to oil, as well as steel and
rubber. Andrew Jackson fought hard to keep the British from taking
New Orleans because he knew it was the main artery for U.S. trade
with the world. He was right and its role has not changed since then.
[
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