While this year’s hurricane season was predicted to be less intense than the previous year, it has still brought about a significant amount of damage and destruction to communities up and down the East coast, and it’s not over just yet. So far, there have been 15 named storms, eight of which were hurricanes. Two major hurricanes, Florence and Michael, have caused financial damages for individuals, businesses and communities totaling well into the billions of dollars.
Another party affected by hurricanes but not as widely discussed is the energy industry. Last year’s hurricane season put a strain on the energy infrastructure of the United States, especially after Hurricane Harvey. Refineries and infrastructure like pipelines, port facilities and terminals were impacted by the excessive amounts of rain during and immediately after the storm, which at its peak, knocked around 4.8 million barrels per day of refining capacity offline. Pipelines and ports had to be shut down temporarily following the hurricane, causing shortages that were felt nationally. As a result, gas prices spiked at gas stations that still had some, while thousands of gas stations had to close until they could be replenished.
The energy industry, like any other industry or individual that lives or operates in a hurricane-prone area, has to take a number of precautions when a major storm is looming. The safety of personnel is the top priority, so days before a tropical storm or hurricane is expected to pass by or directly hit any drilling and production operations, all non-essential personnel is evacuated and the process of shutting down production begins. As a storm gets closer, all remaining personnel gets evacuated from drilling rigs and platforms, and production shuts down entirely. Operations in areas that are not expected to take a direct hit from a storm are often shut down as well, as storms can sometimes change direction unexpectedly.
Energy companies work hard after a storm to return to production as quickly as possible, but sometimes they just aren’t able to. Following Hurricane Katrina in 2005, 95 percent of oil production in the Gulf of Mexico was temporarily wipe out. The member states of the International Energy Agency (IEA) had no other option but to release emergency oil stocks.
Shutting down production, while mainly done for the safety of workers and surrounding environment, can have negative effects on nearby communities as well. While residents and businesses struggle to pick up the pieces after a major storm, astronomical gas prices and gas shortages can increase the burden placed upon them. After Hurricane Harvey, gas stations several states away from the damage were forced to shut down from lack of supply. Shortly after, Hurricane Irma moved in, and some Florida residents had difficulty finding the gas needed to evacuate the area.
With extreme weather events becoming the norm, energy companies are building on what they’ve learned after so many major weather events and are planning and preparing for more of these kinds of emergencies.
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