HOUSTON – Hurricane Ida may lead to a hike in gas prices after the storm slammed into the Louisiana Gulf Coast Sunday.
“We are really presented with some challenges here. It’s a wait and see,” said University of Houston professor Margaret Kidd.
Kidd, the program director for supply chain and logistics technology, said about 90 percent of all production in the Gulf shut down in anticipation of Hurricane Ida. There is no indication yet of when it may all come back online.
“We’ve got to see what flood damage occurred to pipelines to infrastructure such as levees, to refineries and rails,” she said.
While she is not expecting gas prices to rise more than 40 cents a gallon -- as they did in the aftermath of Hurricane Katrina -- but Kidd said to expect some increase.
“It was approximately a couple of months of an uptick in pricing and the estimates I am seeing are somewhere between 15 and 25 cents,” she said. “Until we know how quick we can get the power grid up and running and then fix infrastructure that may have had damage from wind or flooding, everything is a guess.”
Kidd also mentioned that rail lines may have considerable damage that could affect an already stressed supply chain. For example, the Port of New Orleans handles goods such as steel, rubber, food products and paper.
“We are already dealing with a very stressed supply chain in any kind of commodity or manufactured product,” she said. “I think one thing that will be relevant is how quickly the rail line can be up and operational back in Louisiana so Kansas City Southern and Union Pacific. Those are critical components in getting goods from the port in Louisiana, in Alabama in Mississippi up to the Midwest through the southern states.”