If you thought energy was a big issue this summer.....

Wait about 72 hours.

Gasoline prices jumped to unprecedented levels in the wholesale markets today as Hurricane Ike tore across the Gulf of Mexico, threatening to strike Texas and its refineries...

The wholesale price of gasoline ranged from $4 to nearly $5 a gallon in the U.S. Gulf Coast throughout the day today, said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, N.J. That was up significantly from about $3 to $3.30 a gallon on Wednesday, Kloza said.

"We're looking at the highest wholesale prices ever for a huge swath of the country," he said. "People understand that regardless of what happens with Ike, it's going to shut down the biggest refining cluster for a period of five, six, seven days."

http://www.chron.com/disp/story.mpl/business/5995474.html

The effect is already in motion. This morning the Citgo station in CT I drive by was at $3,69/gallon; by 6pm EDT it was up to $3.79/gallon

I'm a fan of expat CT resident Brendan Loy, the cassandra of Katrina, who is still a weatherblogger @ Pajamasmedia http://pajamasmedia.com/weathernerd/. A close read of Loy's blog suggests that the impact of Hurricane Ike may be devastating to the domestic oil industry.

Meanwhile, Alan Sullivan (who has a new post up, BTW) wrote in comments on his blog: “It’s the industry of Houston that I’m worried about. Not only could we be looking at the most expensive hurricane in history, but the destruction of energy infrastructure could put the nation in real difficulty. We have refused to build infrastructure for many years; now we may lose some of what we have.” This from a guy who’s been saying that Ike is “overhyped.” If Sullivan is right, today’s gas panics may be just the beginning.

http://pajamasmedia.com/weathernerd/2008/09/12/ike-nears-coast-storm-surge-catastrophe-likely/

A quick look at the location of American oil refineries demonstrates that a huge percentage of U.S. refining capacity are in communities like Baytown, Port Arthur and Texas City which are likely to suffer serious damage from storm surge from Hurricane Ike  http://en.wikipedia.org/wiki/List_of_oil_refineries#United_States especially as the estimated storm surge may reach 22 feet in some places  http://forecast.weather.gov/showsigwx.php?warnzone=TXZ238&warncounty=TXC167&firewxzone=TXZ238&local_place1=Galveston+TX&product1=Hurricane+Warning

So we are potentially looking at a huge disruption in refining, for some indefinitive period. (Perhaps someone familiar with the business can tell me how well this equipment will handle saltwater immersion)  I know "Beldar" is a Houston lawyer, http://beldar.blogs.com/, whether he has any expertise in oil and gas I'm not sure about.

The usual Democratic response to a price spike--releasing the Strategic Petroleum Reserve--won't work, since the SPR is crude oil, and the problem is we will not have sufficient operating refineries to process the usual deliveries.

Maybe this will be a short hiccup, but if it isn;t maybe fervent opponents of "Big Oil" like Barack Obama or Nancy Pelosi can explain how we are supposed to function without it? Will Speaker Pelosi suggest that we "refine our brains"?

Senator McCain's V.P. choice of a true energy expert, Governor Sarah Palin, may prove all the more prescient in the next few days.