Economic Calendar

Monday, September 15, 2008

Hurricane Ike Robs Houston of Drinking Water, Prompts Curfew

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By Demian McLean and Tom Korosec

Sept. 15 (Bloomberg) -- Hurricane Ike weakened to a tropical depression as it swept toward Canada after shutting oil refineries along the Gulf Coast, flooding homes in Houston and leaving millions in America's fourth-largest city without drinking water and power.

City police declared a nighttime curfew through next weekend, warning of downed power lines, broken traffic signals and water-filled roads. More than 14,000 workers from 33 states will arrive today to help restore nearly all of Entergy Corp.'s 395,000 customers. Restoring power to the region could take a month, said utility CenterPoint Energy Inc.

``All along the area people are without electricity,'' said Peter Teahen, spokesman for the American Red Cross. ``Even if your home wasn't damaged, people still need the basic living supplies.''

Ike, the first hurricane to hit a major U.S. metropolitan area since Katrina in 2005, scattered 2.3 million people in two states before making landfall Sept. 13. The storm weakened to a tropical depression as it moved inland yesterday over Missouri and Illinois, prompting flood warnings.

Thirteen deaths were attributed to Ike, including five in Texas, two in Louisiana, two in Kansas, two in Indiana and one in Arkansas, the Associated Press reported. Additionally, a 4- year-old boy died in Houston of carbon monoxide poisoning from the generator his family used for power, AP said.

Oil and Power

About 2.2 million Texas homes, mostly in the Galveston- Houston area, were without power, said the U.S. Federal Emergency Management Agency. Many pumping stations were also down, leaving residents with no running water. Houston Mayor Bill White asked residents who had access to tap water to boil it, as flooding may have tainted it with bacteria.

``We need to be patient; it can't be done in a day,'' Houston Mayor Bill White said in a televised press conference yesterday. White ordered all city employees to return to work today to help bring the city back online.

President George W. Bush declared the state a major disaster area, offering federal assistance to those living in the 29 counties ravaged by Ike. He will travel to Texas tomorrow.

Many oil refiners along the Gulf of Mexico prepared to reopen their plants after shutting ahead of Ike's approach, reducing the nation's refining capacity by almost a fifth.

Valero Energy Corp., the largest U.S. refiner, said it found ``no significant structural damage'' at three Houston-area refineries it had closed. Kirby Corp., the largest U.S. inland tank-barge operator, said its 303 barges and 83 tow boats in Houston received no ``material damage'' from the storm.

The Department of Energy said it would release 939,000 barrels of crude oil from its strategic reserves to help offset the closures.

No Hiding

Some residents from the Texas coast, under mandatory evacuation orders, rented rooms at Houston's Omni Westside. The hotel lost electricity and running water yesterday.

``You can't hide from the effects of this storm,'' said Walter Hallam, a pastor from La Marque, Texas, as he dipped a wastebasket into the hotel swimming pool to replenish the empty toilet tank in his room.

Closer in to the heart of Houston, about 45 cars waited for gasoline at one of the city's few open service stations.

``I've got everything I need but water pressure,'' David Raye, 59, a machinist, said as he filled up. He said his home was stocked with food, water and a gas-powered generator.

At a Whole Foods market in west Houston, almost 200 people waited in line to enter the store, where bottled water was in demand and ice was being rationed.

Two-Bag Limit

``Two bags per person -- that's the limit,'' said Seth Stutzman, a regional vice president for Whole Foods Markets Inc. who manned the door. Trucks were making a continuous loop from warehouses in Austin, the company's headquarters.

About 42,000 storm victims were in state- or charity-run shelters, Joe Becker, an American Red Cross senior vice president, said in Washington. Some 5 million ready-to-eat meals and 3 million liters of water had been delivered, FEMA said.

The storm surge in coastal Galveston, predicted to be as high as 25 feet (7.6 meters) may have peaked at half that level, according to a National Weather Service tidal gauge.

``With the eye and the eye wall passing directly over Galveston, that was kind of their saving grace,'' said Joe Bartosik, a meteorologist with WeatherBug.com. ``Even though they took the storm core, they escaped the really damaging side.''

Extensive Damage

Bartosik said areas along the Texas coast stretching into southwestern Louisiana received more water than Galveston. In Port Arthur, Texas, as much as 20 feet was recorded and the downtown of Beaumont, Texas, 78 miles (125 kilometers) northeast of Houston, has about 9 feet of water.

The storm may cost insurers between $6 billion and $18 billion, according to estimates from Oakland, California-based Eqecat Inc. and Boston-based AIR Worldwide, which predict the effects of disasters.

Bartosik said radar showed winds were blowing as high as 130 mph above the 10th floor of buildings in downtown Houston.

Houston's 75-story JPMorgan Chase Tower had windows on its west side smashed out, according to the local CBS affiliate, KHOU-TV. The Enron Building and Crown Plaza Hotel were also damaged, the station reported. The city's George Bush Intercontinental and William P. Hobby airports remained closed.

``Extensive damage'' at Reliant Stadium forced the Houston Texans professional football team to reschedule this weekend's home game against the Baltimore Ravens for early November, according to the Ravens Web site.

Ike left more than 70 people dead in Haiti and killed four in Cuba as it swept through the Caribbean last week.

To contact the reporters on this story: Demian McLean in Washington at dmclean8@bloomberg.net; Tom Korosec in Houston, via the New York newsroom at mschoifet@bloomberg.net


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