Weakened Hurricane Gustav hits U.S. Gulf coast

Hurricane Gustav roared ashore on the U.S. Gulf coast today, lashing New Orleans with strong winds and heavy rain but sparing the city devastated by 2005's Hurricane Katrina its full force.

Floodwaters splashed over a concrete wall at the New Orleans Industrial Canal but there were no immediate reports of breaches of the barriers that gave way three years ago, flooding 80 percent of the city and stranding thousands of people.

Oil and natural gas prices plunged as Gustav weakened to a Category 2 hurricane with 110 mph (177 kph) winds shortly before making landfall, easing fears of serious supply disruptions that had put energy markets on edge.

Oil companies had shut down nearly all production in the region, which normally pumps a quarter of U.S. oil output and 15 percent of its natural gas.

Nearly 2 million people fled the Gulf Coast as Gustav approached in one of the biggest evacuations in U.S. history and only 10,000 were believed to have remained in New Orleans. More than 11 million residents in five U.S. states were threatened by the storm.

Gustav, a dangerous Category 4 hurricane a few days ago, hit shore near Cocodrie, Louisiana, about 70 miles (115 km) southwest of New Orleans, as a Category 2 storm on the five-step Saffir-Simpson scale of hurricane intensity, one step below Katrina's strength when it made landfall.

But Mayor Ray Nagin cautioned against too much optimism.

"We are nowhere near out of danger yet," Nagin said. "Those canals are full right now. I don't know if we are going to get any more water pushed in that direction but that's a big concern for me right now."

New Orleans residents on talk radio reported some power outages, but also relief that the storm seemed to be less destructive than originally feared. About 287,000 power customers had lost electricity in Louisiana, including 150,000 in New Orleans, utility Entergy said.

Wind ripped through the city, knocking down trees, ripping off shop awnings and bowling trash cans through the all but deserted streets.

"Gustav doesn't have no punch," pool builder Randall Dreher said, balling his hands into fists, head bowed into the gale. "I went through Katrina and this is totally different. It's weak."

Natural gas futures dropped over 6 percent and oil fell about 4 percent on Monday on expectations that the storm would largely spare production facilities in the Gulf of Mexico.

Hurricane Gustav also took center stage in U.S. politics as Republicans prepared to open their convention on Monday to nominate presidential candidate John McCain with a bare-bones program stripped of the usual pomp and circumstance.

The U.S. National Hurricane Center said Gustav was still likely to toss up "an extremely dangerous storm surge" of up to 14 feet (4.3 meters) that could test the holding power of the levees rebuilt after they failed during Hurricane Katrina.

Hurricane Katrina brought a 28-foot (8.5 meter) storm surge that burst New Orleans levees on Aug. 29, 2005. The city degenerated into chaos as stranded storm victims waited days for government rescue and law and order collapsed.

Police and several thousand national guard troops patrolled the empty city, sometimes in convoys of Humvees, as a curfew went into effect in a bid to prevent looting.

It was expected to swamp parts of Louisiana, Mississippi, Arkansas and Texas with up to 12 inches (30 cm) of rain and 20 inches (50 cm) in some small areas.

FEARS OF ANOTHER KATRINA

Gustav's approach had stirred uneasy comparisons to Katrina, the most costly hurricane in U.S. history, which killed some 1,500 people and caused over $80 billion in damage almost exactly three years ago.

President George W. Bush, who was criticized for the slow relief efforts after Katrina, canceled his appearance at the Republican convention and scheduled instead a visit to Texas on Monday to oversee emergency response effort.

McCain went to Gulf on Sunday to survey preparations and ordered political speeches canceled on Monday for his nominating convention, apparently concerned that television images of a choreographed Republican celebration while the storm was hitting Louisiana would be seen as out of touch.

After accusations of botching Katrina relief efforts, the government lined up trains and hundreds of buses to evacuate 30,000 people who could not leave on their own and Nagin said 15,000 had been removed from the city, including hundreds in wheelchairs.

Flights from New Orleans and other Gulf Coast cities were canceled on Monday as the storm bore down on the region.

Residents boarded up the windows of their shops and homes before leaving town, while others hunkered down as "hold-outs" with stockpiled food, water and shotguns to ward off looters.

"I saw quite a bit of looting last time with Katrina, even 30 minutes after the winds had stopped," said construction contractor Norwood Thornton, who opted to stay behind to protect his home in New Orleans' historic Garden District.

In its run through the Caribbean, Gustav earlier killed at least 86 people in the Dominican Republic, Haiti and Jamaica.

The U.S. Coast Guard reported the first storm-related death in Florida on Sunday, where a man fell overboard as his craft ran into heavy waves.

Katrina and Hurricane Rita, which followed it three weeks later, wrecked more than 100 Gulf oil platforms.