Oil industry responds to hurricane Laura in the Gulf of Mexico
HOUSTON - When Hurricane Laura comes ashore, the storm will have passed over water dotted with thousands of oil and gas platforms, in the Gulf of Mexico. In anticipation, gasoline prices have risen about 10 cents in the last two days, to an average $1.81 for regular unleaded, in Houston. Whether they go any further, will depend on how severe a punch that Laura delivers.
There does not appear a run on gasoline, at local stations, with a lot of expectation that the hurricane will hit away from the city. That is not keeping the process from creeping up. West Texas Intermediate crude traded almost 2% higher, on the possibility that production could be affected.
MORE BUSINESS NEWS FROM FOX 26
In the Gulf of Mexico, there are more than 2600 oil and gas platforms for drilling and production. The government reports that hundreds of platforms have already been evacuated, shutting-in more than 84% of crude-production. Analysts say it is all according to plan. "Normally, they're just getting essential personnel off the platforms; moving what can be moved, like rigs; and just clearing the area," says Criterion Research energy analyst James Bevan, "They do it 2-3 times every year, if not more, so its pretty standardized."
More concerning, potentially, is the fate of refineries along the gulf coast. The region is home to more than 45% of the nation's capacity, and estimates suggest about a third of that capacity, roughly 3 million barrels of fuel a day, has been taken offline in anticipation of landfall. After that, it will be time to assess any damage. "The real worry is if there's heavy wind and storm surge and excessive rain, like with Harvey," says Bevan, "That obviously flooded a lot of facilities, but they tend to build-out these terminals and refineries, to handle pretty heavy storms, as long as it's a quote-'normal' storm that moves through and moves on."
Houston energy analyst Andy Lipow suggests a category-1 storm could keep a refinery out of commission for a week. A category three could stretch that timeline out to several weeks, to return to normal, and there will be no way to know until Laura moves through.