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Reporter's Notebook: Tracking the 2011 Flood

The opening of Louisiana's Morganza Spillway is getting the press, but the story of the Mississippi River’s rise isn’t fully written yet. The river's mighty expanse is pushing records and testing limits.

As of Sunday morning, river heights were nearing the records set back during the terrible 1927 flood. Even the opening of the Morganza hasn’t lowered levels considerably yet and river passage is getting more risky.

Floodwater covers Beale Street at the edge of the Mississippi River May 7, 2011 in Memphis, Tennessee. Heavy rains have left the ground saturated, rivers swollen, and have caused widespread flooding in Missouri, Illinois, Kentucky, Tennessee, and Arkansas.
Scott Olson | Getty Images
Floodwater covers Beale Street at the edge of the Mississippi River May 7, 2011 in Memphis, Tennessee. Heavy rains have left the ground saturated, rivers swollen, and have caused widespread flooding in Missouri, Illinois, Kentucky, Tennessee, and Arkansas.

Having spent the last few days reporting from locations all over the lower part of Louisiana, it's clear that the "all clear" has yet to be given. River heights around Baton Rouge stand at more than 43 feet and the river’s crest is still a few days away. Though state officials say they are confident the levees will keep most of the rising water back, nerves are still on high and will be for a few more weeks.

That stretch of the Mississippi is massively important to the nation’s economy. The Port of South Louisiana, which includes New Orleans, is the largest port by tonnage in the Western Hemisphere. The 10 refineries between Baton Rouge and New Orleans refine about 13 percent of America’s total petroleum every day.

Stocks to watch here include many of the oil giants as well as some midcaps. Murphy Oil’s Meruax refinery accounts for much of the company’s total output. Marathon Oil’s massive Garyville refinery recently went through a multi-billion dollar expansion and now accounts for about 40 percent of that company’s capacity. Other companies with major refining interests along the river include ExxonMobil , Valero , ConocoPhillips and Shell-Saudi joint venture Motiva.

Exxon’s Baton Rouge refinery is the 2nd largest in the nation with a total capacity of more than 500,000 barrels per day. Though most of the refineries’ output is done through pipeline, ships are key for loading and unloading of other vital materials to keep the plants running.

As of Sunday night, the river remains fully open for business. Port authorities tell CNBC that unless a river gauge near New Orleans reaches 18 feet, shipping traffic should remain as normal. Currently the river is under 17 feet, and it is hoped that the opening of the Morganza Spillway will keep levels below that trigger point.

Keeping the lower Mississippi operating keeps the region's economy flowing. When the river was closed down for six days in 2008 due to a barge accident, authorities estimated the total cost at more than $275 million per day.

Inland, the company Alon faces a greater threat from the water as its Krotz Springs refinery sits adjacent to a levee guarding against coming spillway waters.

CNBC visited the refinery over the weekend, and the company was working to shore up the vital levees even further as the water began to flow from the Morganza. Though relatively small, the refinery does produce about one-fifth of Alon’s total output each day.

Also under close watch is the Colonial Pipeline. That vital artery carries around 100 million gallons of gas, oil and other refined products from updates from the Gulf Coast to the Northeast. Parts of the pipe run near the newly flooded area, but Colonial officials tell CNBC that as of Sunday night everything is running as normal and they are closely watching the situation.

The flooding of the Atchafalaya Basin is a terrible story and thousands of people will lose their homes, farms and land. But ultimately the state and Army Corps of Engineers faced what most agree was a Hobson’s choice: sacrifice the rural basin to protect the cities, oil and ships.

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