Lube Industry Weathers Hurricane Ike


Lube manufacturers and distributors in the Houston area are focused on employee safety and keeping their business operations on track as they assess the damage and cope with disruptions following Hurricane Ike, which hammered the southeastern coast of Texas on Sept. 13.

The hurricane hit the regions infrastructure hard, disabling power lines and flooding roadways. Sources say it has complicated, not crippled, business activity in the industry.

Most of Houston is still dark, Barry Bronson, spokesman for Valvoline parent company Ashland, told Lube Report last Thursday. Valvolines blending and packaging plant for automotive lubricants in Deer Park, Texas – 15 miles south of Houston – was without power too.

In an update yesterday, Bronson said the facility was still closed and lackedelectricity, due to a disabled power line. We are told it could be Thursday earliest when we will get full power restored.

The plant, which suffered limited damage, closed well before the hurricane made landfall, when Ike was 500 miles out at sea. We closed it down to let employees tend to their property and their plans, he said. For those employees that have been accounted for, no injuries were reported. The company is contacting other employees who may have become displaced from their homes as a result of the storm.

The welfare of its employees is also a main focus at Shell Lubricants, based in Houston. Following Hurricane Ike, Shell Lubricants immediate priority continues to be the safety and well-being of our employees as they work to recover from the impact of the storm, said Shell spokeswoman Robin Lebovitz. Shells lubricants include Pennzoil, Quaker State as well as its own Shell label.

While we are still assessing damage to our lubricants facilities, our focus is on getting back to normal operations and servicing our customers as quickly as possible, she said. We have activated our business continuity plans to maintain product supply to our customers, and are shifting some orders to other plants in our network to meet customer needs.

But as Lebovitz points out, given the severity of the hurricane some temporary delays may be expected.

As of Thursday, South Coast Terminals three plants in Houston, Crosby and Port Arthur, Texas, were operating on a limited basis after shutting down in advance of the storm, said James Griffin, director of business development there. Headquartered in Houston, the company provides blending, packaging and terminalling services.

Griffin said that all employees were accounted for first, and then its office structures were assessed for wind and rain damage. There was no equipment or tank farm damage reported.

But all three of its manufacturing facilities are experiencing power problems. Much of our delay in the restoration of service is the result of lack of infrastructure services like electricity, phones and raw materials, Griffin said. Some have electricity from the grid and some are running on back-up power.

Getting raw materials into the facility has also been challenging. Although the roadways are starting to clear, and fuel accessibility has improved significantly, the supply chain is sluggish, mostly due to slow restart of commercial trucking – which could be fuel related – and rail activities, he said.

Griffin said that all land routes should be near 100 percent by this week, so normal operations could resume.

According to Henry Johnson, vice president of marketing and business development at lube blender and packager Delta Petroleum Co., the hurricane caused electrical disruptions at all of its Texas Gulf Coast sites, in Deer Park, Houston and Baytown.

By Friday, packaging and shipping operations at all three facilities resumed with the restoration of electrical service in the area. As of now, all operations are fully restored to normal conditions, he said. The company suffered no structural or water damage.

Johnson said that ensuring employee safety was the companys greatest concern. We are thankful that all employees are safe and back at work. We communicated our operations status with employees and customers on a daily basis.

Houston-based J.A.M. Distributing, which runs a bulk storage warehouse in Beaumont, Texas, and a marine facility for barges and tugs in Galveston, is still operating in the aftermath of the storm. While it is assessing all parts of its operation, the Houston facility suffered only minimal damage – rain blowing into the side of the building – and loss of electricity.

As a distributor of finished lubricants, synthetic base stocks, polyalphaolefins and esters, J.A.M.s most critical delivery in the days leading up to the storm was diesel fuel that runs power generators at hospitals, petrochemical companies, refineries and NASA.

According to General Manager John Filak, such generators are what kept its own business up and running. Twelve employees volunteered to man the companys generators when the hurricane hit. We set up motor homes in our warehouse and had the employees stationed there, he said. We had cots for them to sleep and ready-to-eat meals prepared. After the storm passed, the generators prevented any interruption of business operations.

Employees have all been accounted for, and have been told that it is not essential for them to come if they would rather take care of their families, said Filak.

Third Coast Terminals in Pearland, Texas, also utilized generators to keep business going. We had purchased a generator that runs our whole plant and it was up and running Monday afternoon after the storm, said Vice President Grif Carnes. Currently our area still does not have power and we are running the office on a separate generator which only covers our phones and internet.

In terms of damage, Carnes said that two big roll-up doors on the warehouse were lost and there was some fence damage.

The petrochemical and lube marketer is still able to operate, although at a slower pace. Trucks are starting to come in, but many are having a hard time unloading at other places, he said. On the bulk side, a lot of the truck washout centers are still closed, so no clean trailers are available.

As of Monday, Sea-Land Chemical Co. in Houston was running partial distribution operations, with no problems reported. There has been no significant change in operations, said Jonathan Morein, public relations director for the chemical and additive distributor.

At ZXP Technologies, located in Highlands, Texas, and on the Houston Ship Channel, structural damage was minor. Until a week ago, the lube blender, packager and distributor was without power, and experiencing transportation problems by truck and rail. Operations have slowed down, said President and CEO Ed Davis. Were not going as fast as normal.

At Houston-based Martin Midstream Mega Lubricants, which operates a blending plant and warehouse in Channel View, Texas, the electricity returned last Wednesday. The plant is up and running, said Vice President George Dodgen. Were assessing everything right now, but there was very little damage.

Even to those who did not sustain major damage, it appears that Hurricane Ike surpassed the wrath of Hurricane Rita in September 2005.

This particular hurricane had greater impact on Houston than Rita, said Deltas Johnson, pointing to Ikes 100-plus m.p.h. winds that knocked out power and torrential rain that flooded area roads, homes and businesses.

With Rita we did not even get any rain, so this was much tougher on us because of all the wind and rain, said Third Coasts Carnes.

South Coast Terminals Griffin concurred, No comparison. A much harder hit for the employees and the industrial sector.

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