Economic Calendar

Monday, September 1, 2008

New Orleans a `Ghost Town' as Hurricane Gustav Nears

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By Brian K. Sullivan

Sept. 1 (Bloomberg) -- New Orleans became a ``ghost town'' and Louisiana carried out the largest evacuation in its history as almost 2 million people fled Hurricane Gustav. The system was producing tropical-storm force winds along the coast early today.

``Let's prepare for the worst, pray for the best,'' state Governor Bobby Jindal said in a televised news conference yesterday as the Category 3 storm moved closer to shore. An estimated 1.9 million people were evacuated from the state and only 10,000 remain in New Orleans, he said.

Mayor Ray Nagin ordered a sundown curfew to stop looting in the city of 300,000 people and said a storm surge brought by Gustav may cause flooding in its West Bank. He said New Orleans resembled a ``ghost town.''

The National Hurricane Center said, on its current track, Gustav will make landfall in Louisiana by midday local time today. 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.

President George W. Bush declared a state of emergency for Louisiana, Mississippi and Alabama and canceled plans to travel to the Republican National Convention. Presumptive party presidential nominee John McCain canceled 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.''

Storm's Path

As of 2 a.m. local time, Gustav was about 145 miles (235 kilometers) south-southeast of New Orleans and about 95 miles southeast of Louisiana's Port Fourchon, the National Hurricane Center said in a position update. The system was moving northwest at 16 miles per hour, the center said in a 1 a.m. advisory. The storm had sustained winds of almost 115 miles per hour and a ``little strengthening is possible prior to landfall,'' the center said.

An ``extremely dangerous'' storm surge of 10 to 14 feet above normal tide levels is forecast where it crosses the coast, the center said.

Gustav marks Louisiana's first test of evacuation plans that were put in place after Katrina struck in August 2005 with winds of almost 130 miles per hour. The storm flooded 80 percent of New Orleans as it overwhelmed levees and floodwalls, killing 1,800 people in Louisiana and Mississippi and causing more than $80 billion in damage.

Thousands of people were forced to take shelter at the New Orleans Superdome and Convention Center. This time, those shelters are closed and authorities pressed buses and Amtrak trains into service to help evacuate people without transportation.

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

Highways Clogged

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.''

Wesley Shrum, a sociology professor at Louisiana State University, decided 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.

Shrum said he drove yesterday through some of the areas hardest hit by Katrina. ``It's a totally empty city'' other than police in patrol vehicles, he said.

Lines for Sandbags

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.

Strengthen 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.

The storm's eye may pass directly over the Louisiana Offshore Oil Port, also known as the LOOP, which handles 12 percent of U.S. oil imports, said Jim Rouiller, a private meteorologist with Planalytics Inc. in Wayne, Pennsylvania.

``I still think this storm will be worse than Katrina,'' Rouiller said. ``Refinery row from the Sabine River pass to Gulfport will sustain major flooding along with wind damage.''

U.S. energy producers have idled 82 percent of natural gas production and 96 percent of oil output in the Gulf, the U.S. government said. Oil companies including Royal Dutch Shell Plc and BP Plc evacuated workers from 86 rigs and 518 production platforms along the coast.

Jindal said most refineries would conduct ``warm shutdowns'' so they can reopen quickly after Gustav passes.

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.

Gustav, which left at least 81 dead in Haiti, Jamaica and the Dominican Republic last week, smashed through Cuba two days ago, wrecking coastal towns and knocking out communications and power, Agence France-Presse reported.

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




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