Bush Calls for New U.S. Oil Refineries

President Bush called for the U.S. to build its first new refineries since the 1970s after hurricanes Katrina and Rita battered US oil production.

"It ought to be clear to everybody that this country needs to build more refining capacity to be able to deal with the issues of tight supply," he said, calling it "amazing" that no new US refinery had been built in three decades. The storms that hit the Gulf coast also touched every American with higher prices at the pump."

The hurricanes of the past month have laid bare the burdens on the strained U.S. refinery system. Due in part to tougher environmental regulations and local opposition, the country has not built a refinery since 1976.

Bush said private business would have to pick up much of the tab for rebuilding New Orleans and other Gulf coast areas destroyed by Katrina, citing budget limits on what the federal government could pay.

With estimates of post-Katrina reconstruction topping $200 billion (R12.9 trillion), Bush urged congress to find areas to trim in the federal budget.

According to the first publicly released survey of the U.S. insurers, Hurricane Katrina is likely to result in at least $34.4 billion in personal and commercial property loss claims.

The property claim services unit of insurance risk and data firm ISO said that the preliminary estimate of damages to homes and businesses in six states would make Katrina the most costly US natural disaster, surpassing the inflation-adjusted $20.8 billion in losses from Hurricane Andrew in 1992. Several risk assessment companies earlier released projections of insured losses from Katrina, with totals ranging from $14 billion to $60 billion.

ISO's tally included expected insurance industry losses for personal and commercial property, including boats and vehicles, business interruption coverage and additional living expenses. Reported damaged to insured onshore oil facilities was included, ISO officials said.

The estimates excluded losses to utilities, agriculture, aircraft, offshore drilling platforms and property insured under the federal flood insurance program.

Also, the Securities and Exchange Commission (SEC) said it was easing rules for insurance companies to raise capital, responding to concern that the losses from Katrina and Rita could make it harder for insurers to pay victims' claims.

ISO expected policyholders to file more than 1.6 million claims for damage to personal and commercial property, cars, boats and yachts.

The report said insurers were still assessing losses, noting that access to some badly damaged areas in Louisiana was complicated by flooding. Tracking down property owners who evacuated was proving difficult.

The SEC said it would, among other things, allow publicly traded insurance companies to submit reduced paperwork for registering new issues of stock with the agency. The changes will be in effect until December 1.