Energy and Hurricane Katrina

If you are wondering why gas prices spiked up from their already high levels, it's because New Orleans plays a huge role in the energy supply chain. Daniel Yergin in the Wall Street Journal says it's an "integrated energy disaster." His article has just been reprinted on the free OpinionJournal site. You'll want to read the entire thing, but here's a teaser:

"What makes it an integrated crisis is that the entire energy supply system in the region has been disabled, and that the parts all depend upon each other for recovery. If the next weeks reveal that the losses are as large as some fear, this would constitute one of the biggest energy shocks since the 1970s, perhaps even the biggest. Unlike the crises of the '70s or the Persian Gulf crisis of 1990-91, this does not involve just crude oil: It includes natural gas, refineries and electricity."

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