Hurricane Isaac drove water over the top of a levee on the outskirts of New Orleans on Wednesday, but the multibillion-dollar barriers built to protect the city itself after the 2005 Katrina disaster were not breached, officials said.
The slow-moving but powerful Category 1 hurricane was felt along the Gulf Coast, threatening to flood towns in Mississippi, Alabama and Louisiana with storm surges of up to 12 feet and winds up to 80 miles per hour.
"All of the levees are holding and are very strong," New Orleans Mayor Mitchell Landrieu told local radio.
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Emergency management officials in low-lying Plaquemines Parish reported the overtopping of an 8-foot (2.4-meter) high levee between the Braithwaite and White Ditch districts southeast of New Orleans.
Plaquemines Parish President Billy Nungesser said about 2,000 residents of the area had been ordered to evacuate but only about half were confirmed to have gotten out before Isaac made landfall late on Tuesday.
Isaac was wobbling west-northwestward near 6 mph, a pace that increases the threat of rain-induced flooding.
"On the east bank right now, we have reports of people on their roofs and attics and 12 to 14 foot of water (in their homes)," Nungesser told CNN.
"This storm has delivered more of a punch than people thought," he added.
Plaquemines Parish, which stretches southeast from New Orleans, is cut in two lengthwise by the Mississippi River as it flows to the Gulf of Mexico. Much of it lies outside the greater New Orleans levee system, and construction projects to bolster protection are not yet complete.
It was not immediately clear how many people may have been stranded in the area, as driving rain and hurricane-force winds prevented a full-scale search.
"The sheriff's deputies are over there but all the roads are unpassable ... We don't know if some people are left behind and now we can't get there and there is no way we can operate a boat or an air boat in these winds," Nungesser said.
Isaac was the first test for multibillion-dollar flood defenses built after levees failed under Katrina's storm surge, leaving large parts of New Orleans swamped and killing 1,800 people, the costliest natural disaster in U.S. history.
Hundreds in and around New Orleans drowned in 2005 and many survivors waited for days to be plucked from their rooftops by helicopters. New Orleans endured days of deadly disorder and widespread looting.
U.S. Army National Guard troops, many wielding automatic assault rifles, were bivouacked with military vehicles in and around the so-called Crescent City as Isaac approached on Tuesday.
While not nearly as strong as Katrina - a Category 3 hurricane when it slammed into New Orleans on August 29, 2005 - Isaac was a threat that authorities said should not be underestimated.
Rainfall accumulations, potentially totaling as much as 20 inches in some areas, were expected to trigger widespread flooding.
Some 409,000 Louisiana customers of utility Entergy Corp were without power as of Wednesday morning, the company reported. It warned that it would be unable to begin restoring power until winds drop below 30 miles per hour.
At 8 a.m. EDT (1200 GMT), Isaac was about 50 miles south-southwest of New Orleans and packing top sustained winds of 80 miles an hour, the U.S. National Hurricane Center said.
It said hurricane force winds extended outward up to 60 miles from the storm's center.
Isaac killed at least 23 people and caused significant flooding and damage in Haiti and the Dominican Republic before skirting the southern tip of Florida on Sunday and heading across the warm waters of the Gulf of Mexico.
It spared Tampa, Florida, where the Republican National Convention is being held. But it forced party leaders to reshuffle the schedule and tone down what some might have seen as excess celebration about Mitt Romney's presidential nomination as Gulf Coast residents faced danger.
Oil production in the U.S. Gulf of Mexico nearly ground to a halt and ports and coastal refineries curtailed operations.
Energy companies along the Gulf Coast refining center braced for the storm's impact by shuttering some plants and running others at reduced rates ahead of Isaac's landfall.
Intense hurricanes such as Katrina - which took out 4.5 million barrels per day of refining capacity at one point - have flooded refineries, keeping them closed for extended periods and reducing fuel supplies.
This time, though, the U.S. Department of Energy estimated that only 12 percent of the Gulf Coast's refining capacity had gone offline. Louisiana usually processes more than 3 million barrels per day of crude into products like gasoline.
Perceptions that the area's oil facilities would not sustain major damage, and that production would quickly bounce back, pushed international benchmark Brent crude down 74 cents early Wednesday, toward $111.84 a barrel.