'C' for 'Can't catch a break!'

As reported by Smartmoney with a hat tip to Michelle:

Oil companies began pulling workers back out of the Gulf of Mexico on Monday, as Tropical Storm Rita threatened the Gulf Coast production and refining assets spared by Hurricane Katrina just three weeks ago.

Chevron Corp. (CVX) decided to evacuate the staff needed to keep oil and natural gas production platforms running, while Royal Dutch Shell PLC (RDSB.LN) and BP PLC (BP) began pulling nonessential staff. The Chevron evacuations also affect production facilities previously owned by Unocal Corp., which Chevron bought in August.

The U.S. National Hurricane Center expects Rita to grow into a major hurricane covering a wide area in the Gulf of Mexico before making landfall this weekend. The center has shifted its forecast path for Rita northward and now shows the storm targeting Houston and running near producing areas in the western Gulf, heightening concerns in the U.S. and global energy markets.

"You add any supply problems on top of anything we have now, we'll likely see prices spike, at least until the infrastructure gets back to where it is, which is still not back to normal," Doug MacIntyre, an analyst at the federal Energy Information Administration, said in an interview.

Talk about getting kicked when you're down, the energy industry looks to take it in the teeth this week when Rita moves into the Gulf and makes landfall. If projections hold, the storm will impact energy-producing areas from Houston-Galveston to Louisiana.

Just what the doctor ordered; more questions about supply. In response to the approaching storm, oil prices jumped $4-a-barrel on Monday but have dropped some today.

Small consolation however when you consider that oil prices are 45% higher than they were a year ago with no long-term answers in sight. High oil prices of course contribute to higher prices at the pump, however it is not the only concern.

Frankly, this is where I begin to lose my patience; it's the refining capacity folks! Oil supply is tight but adequate enough for our needs. There is not enough refining capacity to produce enough of the numerous fuels required in every part of the country in sufficient quantities to keep gas prices down.

I understand that many want to see this produce the long-awaited jump to 'alternate' fuels. Frankly, that's fine with me; it's the future of energy and eventually the markets will get us there. In the meantime however, I'm driven to the brink of madness by refusals to even entertain an increase in refining capacity to deal with the shorter- and medium-run difficulties in managing the gasoline supply.