Hurricane's high winds could bring high gas prices

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The hurricane ravaging the Gulf Coast could mean higher gas prices for the rest of the nation.

About 25 percent of the country's domestically produced oil comes from refineries and oil rigs directly in the path of Hurricane Katrina.

The storm, which crashed into the coast of Louisiana and Mississippi with 140-mph winds Monday morning, shut down refineries and off-shore oil rigs throughout the region. Gulf Coast oil production could be at a standstill for days, depending on the extent of the damage.

"It's a little early to see how it's all going to shake out," said Greg Schnacke, executive vice president of the Colorado Oil and Gas Association.

Schnacke said the decrease in production in the gulf will mean higher prices at the pump, but until the storm passes and crews can assess the damage, it's hard to predict how high prices will go.

"Prices will rise to meet the demands, the question is, what will prices rise to?" Schnacke said.

Weather is always a factor in oil production, Schnacke said, but hurricanes can be particularly hazardous. Even less-severe hurricanes can push offshore rigs as far as 100 miles from their original location.

Katrina started as a Category 5 storm, the highest category possible on the Saffir-Simpson scale used by the National Weather Service. By the time the storm made landfall, it was downgraded to a Category 4, but it still packed enough punch to tear off part of the roof at the Louisiana Superdome in New Orleans.

Schnacke said even fires and maintenance at refineries cause a jump in gasoline prices, so extensive hurricane damage could mean a significant in----crease.

"I think you can count on some increases at the pump," Schnacke said.

Nationwide, gas prices have been at an all-time high this summer. According to AAA, the national average for a gallon of regular unleaded fuel was $2.603 Monday. The Colorado average Monday was $2.631.

But in Craig, prices are well above the national average and have been all season. A gallon of unleaded in Craig cost $2.899 on Monday.

For businesses that rely heavily on gasoline and diesel fuel, another jump in gas prices will have a definite effect.

At Arrowhead Automotive and Collision Repair on Yampa Avenue, manager Richard Oberwitte said rising gas prices eventually will be passed to the consumer.

"Our rates will just have to keep going up," Oberwitte said.

Tow trucks from Arrowhead go as far as Denver to pick up cars, Oberwitte said, so rising gas prices have a direct effect on his business.

But, Oberwitte said, gas prices eventually will have an indirect effect as well because car owners won't spend money on minor repairs, such as bodywork not covered by insurance.

"We're going to see only the things repaired that are absolutely necessary to be repaired," Oberwitte said. "People can't take it out of their pocket when they have to put it into their tank."

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