The New Orleans TV stations (combined live stream here) and the cable news networks are airing dramatic footage of significant overtopping at the Industrial Canal. Here’s a screenshot I just grabbed:

However, the Army Corps says the canal wall will hold:

Despite water sloshing over the west side of the Industrial Canal wall, the Corps of Engineers is confident the wall will hold and that no significant flooding will occur as a result, a spokeswoman said this morning at the state’s Emergency Operation Center.

“We’re confident in the stability of that wall,” which was fortified after Hurricane Katrina, said Karen Durham-Aguilera, director of Task force Hope for the U.S. Army Corps of Engineers.

Also, the reports so far are positive on the outflow canals to Lake Ponchartrain, which was a serious source of flooding after Hurricane Katrina. Water from the drainage canals is flowing into the lake and there is no reason at this time to close the canal gates, said

Based on current surge elevations, “We’re not expecting a major inundation” of New Orleans, she said. “But again, where hurricanes are concerned we have to watch it.”

With regard to the Industrial Canal, it’s worth remembering that overtopping itself can cause flooding — you don’t need a levee breach to do that. But the Corps apparently believes that the water will not rise higher, and that the surge will recede before the current degree of overtopping can cause “major inundation.” That seems right to me. If Gustav were stalling out, it might be a bigger problem, but the center is continuing to move northwest, so the onshore winds and surge in New Orleans should begin to subside fairly soon.

It’s surprising that the Industrial Canal is the epicenter of the flooding concern, since it’s on the east side of the city, and Gustav’s most significant impact should, in theory, be on the west side, closer to the center. I’ve heard nothing about flooding on the West Bank, though.

UPDATE: The overtopping has caused six inches of flooding in the Upper Ninth Ward. If that’s as bad as it gets, then obviously, things aren’t too terrible. The good news is, Gustav is continuing to move steadily away, so presumably the surge should be subsiding soon.

Here’s video of the overtopping:

Meanwhile, “eight tug boats have broken loose in the Mississippi River in St. Charles Parish and are heading toward New Orleans, posing a hazard to navigation.”