Economic Calendar

Monday, September 1, 2008

Hurricane Hammers Louisiana; New Orleans Empties

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By Brian K. Sullivan and Alex Morales

Sept. 1 (Bloomberg) -- Gustav buffeted the Gulf Coast with hurricane-force winds, threatening devastation to rival Katrina, after the largest evacuation in Louisiana history turned New Orleans into what its mayor called a ``ghost town.''

``Let's prepare for the worst, pray for the best,'' state Governor Bobby Jindal said in a televised news conference yesterday. He said 1.9 million people fled coastal areas on jammed roads and mass transit, leaving behind only 10,000 of New Orleans' 300,000 residents. The city's population decreased 40 percent since Katrina hit in 2005.

Gustav's eye was 80 miles (129 kilometers) south-southwest of New Orleans and about 20 miles southwest of Port Fouchon along the coast at 8 a.m. local time, the National Hurricane Center said on its Web site. The system, which was moving northwest at 16 mph, weakened to a Category 2 on the Saffir- Simpson scale, with maximum sustained winds of about 110 mph, the center said. Katrina was a Category 3 storm at landfall, with 120 mph winds.

Mayor Ray Nagin ordered a sundown curfew to prevent looting in the city and said a storm surge may flood the West Bank area, which was largely spared by Katrina. The surge was forecast by AccuWeather Inc. meteorologist Dan Pydynowski to reach up to 15 feet along parts of the coast.

``It's a totally empty city'' other than police in patrol vehicles, said Wesley Shrum, a sociology professor at Louisiana State University who planned to ride Gustav out in a French Quarter condominium. ``We picked a 200-year-old building, so we thought we'd be all right,'' he said, ignoring Nagin's earlier admonition ``to get your butts moving out of New Orleans.''

Hurricane-Force Winds

The storm's eyewall was moving onto the southeastern Louisiana coast, and hurricane-force winds extended as much as 70 miles from the center, the NHC said.

``The worst of the storm is going to go to the west'' of New Orleans, Pydynowski said. ``They're still getting hit by a hurricane'' that will cause flood damage.

Gustav has prompted energy companies to shut down 82 percent of the natural gas production and 96 percent of the oil output in U.S. areas of the Gulf of Mexico. The storm killed dozens of people in the Caribbean.

President George W. Bush declared a state of emergency for Louisiana, Mississippi and Alabama and canceled plans to travel to the Republican National Convention in St. Paul, Minnesota. Presumptive party presidential nominee John McCain scrapped most of today's opening events so the nation could focus on the storm, while Democratic presidential nominee Senator Barack Obama called on the public to ``take the evacuation seriously.''

First Test

Gustav marks Louisiana's first test of evacuation plans that were put in place after Katrina struck in 2005 and overwhelmed flood defenses, inundating 80 percent of the city. Katrina killed 1,800 people in Louisiana and Mississippi and caused more than $80 billion in damage.

Thousands of people were forced to take shelter from Katrina at the New Orleans Superdome and Convention Center. This time, those buildings are closed and authorities pressed buses and Amtrak trains into service to help evacuate people who lacked their own transportation.

``We did well this time on the evacuation front,'' Nagin said.

Highways were clogged with traffic as people fled the approaching storm. Mario and Laura Hernandez of Metairie, just west of New Orleans, bundled their two children into a trailer and headed to the state capital, Baton Rouge, for the second time in three years.

``I knew the time would come,'' said Mario, 25. ``I didn't know it would come so soon.''

Baton Rouge

In Baton Rouge, about 80 miles from New Orleans, residents lined up outside a fire station for sandbags to protect their homes from possible flooding.

``I am considering getting out of the state altogether,'' said Joe Martin, 36, who moved to the city after his home was destroyed by Katrina. ``I am tired of starting over.''

Help was pouring in to Louisiana from as far away as Los Angeles, which is sending water-rescue teams, said Jindal. Authorities mobilized 7,000 National Guard personnel and are preparing 1,800 more.

As the outer bands of Gustav began to fill the sky with rain late yesterday, 60 ambulances from across Pennsylvania arrived in Baton Rouge to help the state cope.

U.S. Secretary of Health and Human Services Michael Leavitt declared a public health emergency so that people in Gulf coast states don't encounter obstacles to receiving care if they leave their home communities.

New Orleans Levees

The Army Corps of Engineers has stockpiled sandbags to repair any breaches in the New Orleans levees, said spokesman Bill Irwin. The Corps has worked since Katrina to strengthen the levees, which form a ring of barriers surrounding the below-sea- level city. Work isn't scheduled to be complete until 2011.

Jindal said most refineries would conduct ``warm shutdowns'' so they can reopen quickly after Gustav passes. Oil companies evacuated workers from more than 600 rigs and production platforms in the Gulf, where fields account for about a quarter of U.S. oil production.

Oil companies including Royal Dutch Shell Plc and BP Plc evacuated workers from 86 rigs and 518 production platforms along the coast.

Fields in the Gulf produce 1.3 million barrels a day of oil, about a quarter of U.S. production, and 7.4 billion cubic feet a day of natural gas, 14 percent of the total, according to government data. Katrina closed 95 percent of regional offshore output and, along with Hurricane Rita, idled about 19 percent of U.S. refining capacity.

Tornadoes Spotted

The hurricane center forecast isolated tornadoes for parts of the central Gulf coast today. A tornado was spotted in Gulfport, Mississippi, at 5:08 a.m. local time today, the National Weather Service said on its Web site. Thunderstorms capable of producing tornadoes were also detected near Myrtle Grove, Louisiana, and Weeks Bay, Alabama.

Gustav swept over Cuba's Isle of Youth at the weekend as a Category 4 hurricane, with 145 mph winds, before crossing the western mainland. No deaths have been reported, and 18 were injured, the official Communist daily Granma said today on its Web site. More than 86,000 homes were damaged, and hundreds of telephone and electrical poles were downed, Granma reported.

The storm killed at least 12 people in Jamaica, the country's Office of Disaster Preparedness and Emergency Management said late yesterday in an e-mailed statement. The storm caused agricultural losses estimated at 1.7 billion Jamaican dollars ($24 million) it said.

Food Aid

In Haiti, where the storm killed at least 51 people, the United Nations World Food Program said it began distributing rice, beans and oil to 2,000 families. In the neighboring Dominican Republic, eight people were killed, the country's Center of Emergency Operations said on its Web site.

In the Caribbean, Tropical Storm Hanna was almost stationary north of the Caicos Islands, the hurricane center said in an advisory at 8 a.m. Miami time. The system was on a westward track and the eye will move near or over the southeastern Bahamas during the next day or two. Hanna had sustained winds of almost 50 mph, the center said.

To contact the reporter on this story: Brian K. Sullivan in New Orleans at bsullivan10@bloomberg.net; Alex Morales in London at amorales2@bloomberg.net.




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