Hurricane Ike could be a menace to Arizona gas prices

Gas prices in Arizona have been headed downward for weeks, but that could all change with Hurricane Ike in the Gulf of Mexico.

Ike is the second major storm, behind Gustav, in two weeks to threaten vital Gulf Coast energy infrastructure.

Linda Gorman of Arizona AAA said there's concern it could take aim at the oil platforms and refineries in the Gulf.

``Louisiana and all the off-shore rigs are just coming back into production this week," Gorman said. ``It was anticipated they would be back to normal this week or next, but now it looks like some of those off-shore rigs are pulling people back on shore."

About 80 percent of oil production and 70 percent of natural gas production in the Gulf remains shut down, following Gustav. The lion's share of that will not come on line again until Ike is no longer a threat.

``Right now, the effect (on gas prices) has been very regional," Gorman said. ``Louisiana, Texas, all along the Gulf Coast, they've seen some regional price spikes. We've actually continued to see declines of about 3 cents over the weekend... If we don't have any ill effects from the storm, we could continue to see a drop, of another 10 cents or so."

The average gas price in Arizona this morning was $3.56 a gallon, down from a high of $4.10 earlier this summer. Arizona will switch to its winter-blend fuel soon, which should drop prices even more.

Ike was moving westward across Cuba this morning, with the center about 40 miles south of Havana. The storm surge was causing minor flooding in Key West, Fla., 90 miles north of Havana. Ike is forecast to move into the Gulf of Mexico later today, with its 80 mph winds expected to grow stronger. Texas or northern Mexico could be hit by the weekend.

Gorman said hurricanes can have varying effects on the oil industry.

``Anything can happen from a loss f electricity to complete destruction to flooding. Flooding can be a major problem. Even if there's not a lot of extensive damage, you can have these (oil) facilities flooded and it can take weeks, sometimes months, for them to recover."