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Hurricane Harvey closes key oil and gas facilities in Texas


Key oil and gas facilities along the Texas Gulf Coast have temporarily shut down as Hurricane Harvey pounds the region with torrential rain and high winds, virtually assuring gasoline prices will rise in the storm’s aftermath.

Even before the Harvey made landfall late Friday, dozens of oil and gas platforms had been evacuated, at least three refineries had closed and at least two petrochemical plants had suspended operations.

How soon they reopen depends on the severity of flooding and the resumption of power to the areas. Experts say it’s still too early to say, with the storm still moving through the region. But they believe gas prices will increase 5 cents, to 25 cents per gallon.

Hurricane Harvey also continued to take a toll on U.S. air travel Saturday, with more than 960 flight cancellations as of mid-day, according to FlightAware. Nearly 800 of the cancelled flights were scheduled to either depart from or land at Houston’s two airports.

The shipping industry also is expected to be disrupted by the worst hurricane to hit the refinery-rich Texas coast in more than 50 years.

Here’s how Harvey is likely to affect business and pocketbooks:

— REFINERIES: Nearly one-third of the nation’s refining capacity sits in low-lying areas along the coast from Corpus Christi, Texas, to Lake Charles, Louisiana.

Several refineries at greatest risk of suffering a direct strike from high winds have already shut down, but it is the potential for flooding in the Houston and Beaumont, Texas, areas that could really pinch gasoline supplies.

Flooding and power outages caused by a storm surge are considered the biggest risk.

“The biggest driver of how much this will increase gas prices is how much rain falls in Houston during the next three days,” Andy Lipow, president of consultant Lipow Oil Associates, said Saturday. “We are in a wait-and-watch mode.”

For now, Lipow is predicting gasoline prices will rise 10 cents per gallon east of the Rockies.

Tom Kloza, an analyst for the Oil Price Information Service, predicts that prices could rise by up to 25 cents a gallon, but that an increase of 5 cents to 15 cents is more likely, assuming that the hurricane doesn’t cause lasting damage to refineries.

Flint Hills Resources announced that it would shutter a refinery before Harvey hit and Valero Energy Corp. said it was closing two facilities in Corpus Christi.

The prospect of supply interruptions sent gasoline futures to $1.74 a gallon, their highest level since April, before they retreated to around $1.67 by Friday afternoon.

In addition to the refinery closures, Formosa Plastics shut its petrochemical plant in Point Comfort, Texas, and OxyChem suspended operations at its petrochemical plant in Ingleside, Texas, according to Platts, an S&P Global division that tracks the commodities and energy industry.

— OIL AND GAS: Companies have been evacuating workers from oil platforms in the Gulf of Mexico, and that is crimping the flow of oil and gas.

As of Friday, the U.S. Bureau of Safety and Environmental Enforcement said workers had been removed from 86 of the 737 manned platforms used to pump oil and gas from beneath the Gulf.

The agency estimated that platforms accounting for about 22 percent of oil production and 23 percent of natural gas output in the Gulf had been shut down.

“We could see more production be taken offline in the Gulf of Mexico” if the path of the storm wanders farther east, said Jenna Delaney, an oil analyst for PIRA Energy. But, she noted, oil companies announced fewer platform shutdowns on Friday than they had on Thursday, which is an encouraging sign.

Exxon Mobil closed two of its platforms and was evacuating all personnel in the expected path of the storm, said spokeswoman Suann Guthrie. Shell halted operations on a big floating oil-production platform, and Anadarko evacuated workers and shut down four facilities in the western Gulf while continuing to operate those east of the storm’s predicted path.

On shore, ConcoPhillips stopped all operations in the Eagle Ford shale formation, which lies across a swath of South Texas inland from the Gulf. A company spokeswoman cited safety and potential disruptions in getting oil and gas from the wells to market during the storm.

— SHIPPING: Shipping terminals along the Texas coast shut down as the storm approached. Port operations in Corpus Christi and Galveston closed, and the port of Houston said container terminals and general cargo facilities were closing around midday Friday.

Rates for carrying freight between the Gulf of Mexico and the U.S. East Coast rose.

— TRAVEL: After nearly 1,200 flight cancellations Friday and Saturday, airlines already had canceled another 485 flights scheduled for Sunday, according to FlightAware.

Airlines were offering customers the chance to reschedule trips that would take them to Houston, San Antonio or Austin from Friday through the weekend.

— UTILITIES: Researchers at Texas A&M University estimated that the storm would knock out power for at least 1.25 million people in Texas. They said the hardest-hit areas will include Corpus Christi, which is on the coast, and San Antonio, which is about 140 miles inland.

— INSURANCE: A firm that does forecasts for insurance companies said wind-damage claims could top $6 billion, although it said losses in the low billions are more likely.

Risk Management Solutions Inc. said losses from storm surges and inland flooding could be a bigger source of losses. If the firm is correct, that would put homeowners and the government-backed National Flood Insurance Program at risk.

The flood program is run by the Federal Emergency Management Agency, which owes the Treasury about $23 billion in funds borrowed to cover the cost of past disasters, according to a recent report by the U.S. Government Accountability Office.

Homeowner policies with insurance companies don’t typically cover flood damage, yet a relatively small percentage of homeowners have flood insurance through the federal program.


114 Comments on "Hurricane Harvey closes key oil and gas facilities in Texas"

  1. Apneaman on Tue, 29th Aug 2017 2:51 pm 

    Texas Republicans hit by Hurricane Harvey voted against Sandy aid for N.J.

    “With Texas now having to deal with the aftermath of Hurricane Harvey, lawmakers there will be looking for federal disaster aid – after they voted against a crucial aid package for New Jersey and New York following Hurricane Sandy in 2012.

    The Dallas News says eight Texas representatives in 2013 voted against replenishing the National Flood Insurance Program, which was already running out of money ahead of Sandy.

    All but one member of the Republican delegation from Texas also voted no on a second bill providing $50.5 billion in aid for Sandy victims.”

  2. rockman on Tue, 29th Aug 2017 3:28 pm 

    Davy – Just saw some interesting radar images. Probably not the case but there was a hint that Harvey might be paralleling the coast more the heading inland. And the last image seemed to show the organized center of Harvey increasing significantly. Probably not the case but we should have more clarity by midnight. The other interesting image: the rain hitting New Orleans this afternoon was the outer band of Harvey’s circulation. Again similar to what happened to Houston: the flood rains were the outer ban 200 to 250 miles from Harvey’s center. I looked unsuccessfully for a data base showing such a radius for past hurricanes. My memory may have faded but I don’t recall any hurricane with such heavy rains that distal from the eye. Usually they come from the eye wall immediately surrounding the center of circulation. This might actually be a new dynamic generated by AGW. As I explained above I doubt the stalling is related to AGW. Just bad luck to be trapped between 2 high pressure domes.

    Time will tell but Harvey will probably follow the current predicted track up the Texas/Louisiana border.

  3. Davy on Tue, 29th Aug 2017 3:38 pm 

    Yea, Rock this hurricane will be talked about a lot more. Well, we do know AGW and warm waters has been a major factor. There is no denying that variable as a basic enhancer of this storm. I feel the jet stream has been altered by AGW. Patterns are setting up and remaining for longer stretches. This may explain the blocking from the north.

  4. Boat on Tue, 29th Aug 2017 3:49 pm 

    My niece found a site that gave elevations of addressees. Combine that with the highest crest of the river near you to estimate the flood danger. Currently my house could handle 45′ more flood waters before becoming engulfed. This was great news. Still no electricity though neighbors across the street was restored a few hrs ago. The worst had passed even though we may get a few inches over the next few days. I feel badly for those just a few blocks away whose homes are flooded. Quite the mess.

  5. Apneaman on Tue, 29th Aug 2017 5:08 pm 

    ExxonMobil refineries are damaged in Hurricane Harvey, releasing hazardous pollutants

    Study Confirms ExxonMobil Knew About Climate Change Decades Ago, And Deliberately Misled Public

    Hey deniers keep sucking your master’s cock. Gulp gulp gulp….

  6. Apneaman on Tue, 29th Aug 2017 5:10 pm 

    Houston Residents Begin Surveying Damage Of 200 Years Of Unchecked Worldwide Industrialization

    “HOUSTON—Appearing shellshocked as they took in the scenes of devastation around them, Houston residents reportedly emerged from their homes Monday to survey the damage caused by 200 years of rampant, worldwide industrialization. “Oh my God. Everything’s destroyed, everywhere you look,” said visibly stunned citizen Chris Marciano, one of the 2.3 million locals who stared silently, buried their faces in their hands, or broke down in tears at the sight of entire neighborhoods and business centers that had been wiped out by generations of aggressive, unregulated expansion of mass production methods and transportation technologies and the resultant exponential growth in harmful gas emissions. “We’ve lost everything, absolutely everything. I’ve never seen destruction like this before. If only there had been some way this could have been prevented.” At press time, officials were urging citizens all along the Eastern Seaboard and Gulf Coast to prepare for similar emergencies, warning that the centuries of unrestrained global manufacturing growth that hit Houston could strike anywhere, any time.”

  7. Apneaman on Tue, 29th Aug 2017 6:35 pm 

    Here’s the POTUS with an estimate of the damages.

  8. Dredd on Wed, 30th Aug 2017 6:49 am 

    Admilar Tilley to Cloggie:

  9. Dredd on Wed, 30th Aug 2017 6:51 am 

    Rear Admiral Tilley to rear view (hindsight anal cavaties … deniers):

  10. Dredd on Wed, 30th Aug 2017 6:56 am 

    Admiral Tilley: “National security is threatened by climate change”

  11. peakyeast on Wed, 30th Aug 2017 9:01 am 

    @boat: Thanks for your update. Glad to hear you are well through it.

  12. Dredd on Wed, 30th Aug 2017 10:14 am 

    rockman (“Dr. Hindsight”) wrote about not being able to foresee events we now see before our eyes.

    He could not be more WRONG.

    This video ( features Professor / Dr. Peter Hoeppe of Munich RE, one of the world’s leading reinsurers (insurer of insurance companies).

    He points out that they made climate change induced floods, etc., a part of their core business plan in 1973.

  13. Apneaman on Wed, 30th Aug 2017 11:31 am 

    Dredd, when you talk to rockman you are talking to someone who has as much sunken costs – emotionally, professionally, worldview – as anyone out there.

    Backfire effect

    “The backfire effect occurs when, in the face of contradictory evidence, established beliefs do not change but actually get stronger. The effect has been demonstrated experimentally in psychological tests, where subjects are given data that either reinforces or goes against their existing biases – and in most cases people can be shown to increase their confidence in their prior position regardless of the evidence they were faced with.”

    I keep reading comments from hopeful humans after every ever more destructive AGW Jacked event that ‘maybe this will be the one that wakes them up’ No no no. It will never happen and as you can see they only double down on their denial. Hell the stupidity is just getting started. There is no ceiling on denial.

    Mainstream Media Misrepresents Hurricane Harvey’s Climate Change Connection

    It’s “extremely annoying when all of these extreme events occur, whether it’s a wildfire or an extreme hurricane like this, and there’s no mention of the fact that climate change has actually exacerbated the situation,” says Dr. Kevin Trenberth of the National Center for Atmospheric Research

  14. Apneaman on Wed, 30th Aug 2017 12:01 pm 

    Published 2011

    Changes in precipitation with climate change

    “ABSTRACT: There is a direct influence of global warming on precipitation. Increased heating leads to greater evaporation and thus surface drying, thereby increasing the intensity and duration of drought. However, the water holding capacity of air increases by about 7% per 1°C warming, which leads to increased water vapor in the atmosphere. Hence, storms, whether individual thunderstorms, extratropical rain or snow storms, or tropical cyclones, supplied with increased moisture, produce more intense precipitation events. Such events are observed to be widely occurring, even where total precipitation is decreasing: ‘it never rains but it pours!’ This increases the risk of flooding. The atmospheric and surface energy budget plays a critical role in the hydrological cycle,..”

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