Hurricane Ike continued to march toward the Texas coast Thursday and areas east and southeast of Houston were evacuating after forecasters said landfall was likely Friday night or early Saturday around Freeport, TX. The storm kept most prices rising in the Gulf Coast and Northeast, but markets in the Midcontinent/Midwest and West were mostly softer (see related story).

In its 5 p.m. EDT update, the National Hurricane Center (NHC) stated that it finally had some “hard data” to support the advisory of the storm’s expected intensity, which indicates Ike, a Category Two storm Thursday, would likely gain strength before making landfall late Friday or early Saturday morning. “Because of the very large expanse of hurricane force winds, Ike will create a storm surge well in excess of what would normally be associated with a storm of its intensity.”

A hurricane warning remained in effect from Morgan City, LA, to Baffin Bay, TX, and some areas of southwestern Louisiana already were reporting minor flooding Thursday afternoon. Ike, less than 470 miles east-southeast of Galveston Thursday, had maximum sustained winds holding at 100 mph. Movement was toward the west-northwest at around 10 mph.

Based on a survey of 84 offshore operators, the Minerals Management Service (MMS) Thursday estimated that 93.3% of the natural gas production from the Gulf of Mexico (GOM) had been shut in; current gas output before Hurricane Gustav stormed into GOM waters was 7.4 Bcf/d. Estimated oil production shut in is 96.9%; MMS estimated pre-Gustav, oil output approached 1.3 million b/d. Personnel from a total of 562 production platforms, equivalent to 78.4 % of the 717 manned platforms in GOM, had been evacuated. And personnel from 93 rigs, equivalent to 76.9% of the 121 rigs currently in operation, also had been evacuated.

Mandatory evacuations were ordered for all low-lying areas southeast of Houston, and with that, energy facilities and offices across the Greater Houston Metropolitan Area were hunkering down ahead of the storm, sending nonessential personnel home Thursday afternoon as schools and banks shuttered their doors.

In a particularly ominous warning, the National Weather Service for the Houston/Galveston area said, “Life threatening inundation likely! All neighborhoods and possibly entire coastal communities will be inundated during high tide. Persons not heeding evacuation orders in single family one or two story homes will face certain death.” It went on to say that water levels “may exceed nine feet or more than a mile inland.”

With tropical storm winds expected by midday Friday, major airlines were canceling flights, and events — including Texas’ renowned Friday night football games — were canceled at schools located along the Gulf Coast. The Houston Astros postponed its games against the Chicago Cubs on Friday and Saturday, and Houston Mayor Bill White urged the area’s employers to give their employees the day off.

AccuWeather.com’s forecasting manager Ken Reeves noted that the potential for catastrophic damage is extremely high. “In contrast to the major hits in the Gulf over the past several years, including [hurricane] Katrina, Ike will not weaken significantly before landfall. As a result, the damage potential is exponentially higher.”

The worst conditions were forecast for Friday night into early Saturday, and the most severe conditions were likely to impact areas just to the north of where the center makes landfall, The Weather Channel stated. After Ike makes landfall, life threatening flooding rains and potentially damaging winds were forecast to spread inland across Texas into Sunday.

AccuWeather.com’s Joe Bastardi, in a blog Thursday, likened Ike to Hurricane Hugo, which made landfall in September 1989 in South Carolina. At the time Hugo was the costliest hurricane in U.S. history, which caused $7 billion in damages (Hugo’s costs were surpassed in 1992 by Hurricane Andrew).

“In 1989, Cat 2 [Category Two] Hugo had a 954 pressure and winds about 110 mph when 24 hours away from landfall, then hit 20 mb lower with winds over 135 [mph],” said Bastardi. “This occurred because the huge storm was very large, but while approaching the coast the system tightened up. We are facing a similar situation with Ike, though in a warmer area and 10 days earlier than Hugo.

“Ike is already a monster,” Bastardi noted, “and the storm is increasing its overall amount of energy as witnessed by the spreading out of strong winds. Katrina hit at 923, an unusually low pressure for a Cat 3, but representative of the total energy of the storm, which was far-reaching. But Katrina was off the sub 900 mb pressure and was expanding. Ike will be more like Hugo because, coming into the coast the way he is, the convergence caused by the coast helps tighten the storm for one, and two, the movement in from the southeast to the south-southeast is one that is a favorable development path, for it indicates the storm is at the southwest side of a ridge, and that is where prime synoptic scale outflow is likely to be found.”

Ike was “negotiating a cool eddy now, and so it’s status quo,” Bastardi said Thursday. “The drop into the mid-940s over the first warm pool is rather modest given what we have seen from other storms, but the increase in the size of the storm and the overall area of hurricane-force winds, now extending close to 200 miles across, is impressive…But it’s not by any means near its limit, or what other storms have done. The fabled Great Atlantic Hurricane of 1944 was the storm that sunk the USS Warrington, stripped screws off a recon plane and had hurricane-force winds reportedly over 600 miles in diameter, and its pressure? 944 mb!”

Meteorologist Jeff Masters of wunderground.com said, “Ike’s surge will probably rival the massive storm surge of Hurricane Carla of 1961.”

Carla struck the Texas coast near Port Lavaca on Sept. 11, 1961, as a Category Four hurricane with 145 mph winds at landfall, driving a 10-foot storm surge to a 180-mile stretch of the Texas coast, Masters noted. The amount of water Ike has put in motion is about 10% greater than what Katrina did, and thus we can expect Ike’s storm surge damage will be similar to or greater than Katrina’s.”

Based on Masters’ observations, “Ike will probably inundate a 250-mile stretch of Texas coast from Port O’Connor [TX] to the Louisiana border with a 10-15 foot storm surge. This will occur even if Ike is a Category One storm at landfall. If Ike is a Category Three-plus hurricane at landfall, surges of 20-plus feet are possible…The official NHC forecast is calling for maximum storm surge heights of 20 feet.”

In related news, MMS Thursday issued preliminary damage reports for GOM infrastructure from Hurricane Gustav. It noted that from Aug. 31 through Sept. 1, 677 production platforms in the GOM were exposed to hurricane conditions, or winds more than 75 mph. There are a total of 3,800 production structures in the Gulf; this includes both manned and unmanned facilities. As of Wednesday (Sept. 10), MMS had received only one report of a small platform being destroyed offshore Louisiana. There also was an oil sheen reported in the area of the platform estimated to have a volume of less than one gallon. The platform, an unmanned structure, accounted for 0.01% of the GOM’s oil production and 0.04% of the gas output, MMS stated.

“It’s very encouraging that reports of damage to date have been minor,” said MMS director Randall Luthi, “At the same time, we have just started to see reports and it will take several weeks before we have a more comprehensive picture.”

MMS received a report of one platform having extensive damage, which may take from three to six months to repair. Five platforms reportedly received moderate damage, which will take one to three months before production can be restored, and 35 platforms received minor damage, which is expected to take up to one month to repair and restore production.

In its helicopter fly-overs, MMS reported one oil sheen estimated to be around 9 bbl; subsequent investigations showed that the sheen had dissipated. All other sheens reported by industry or observed by MMS or U.S. Coast Guard overflights were estimated at less than 1 bbl.

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