After forecasters predicted a variety of tracks for Ike these past several days, it finally ended up taking one of the worst possible paths in terms of potential damage to oil and gas infrastructure. Not only is it hitting a large swath of offshore oil and gas rigs, but it also threatens to flood and cut off electricity for the refining center of our country. Luckily for everyone, Ike wasn’t organized enough to pull together its Category 4 potential. But the storm surge and the huge swath affected by this enormous storm make it potentially devastating nonetheless. The latest National Hurricane Center track has Ike slamming the Houston row of refineries with the brunt of its wind and flooding.
We could be feeling Ike’s impact for months as these refineries produce more than 20% of the gasoline and diesel that runs our vehicles. Already, crude oil, gasoline, and propane inventories are significantly below post-Katrina-and-Rita levels — so the further decline in most storage levels that will show up in the next two weeks’ reports could seriously affect our fuel markets. The potential mitigating factor is reduced demand now that our country has begun a more fuel-efficient lifestyle this year, especially with summer having passed. But Ike certainly has the potential to stop the bear run of prices in its tracks, even though its winds of 110 miles per hour aren’t the fastest that have hit east Texas.
Hurricane Rita hit north/east of Galveston/Houston, sparing many of its myriad refineries. But if Ike decides to hit this refinery hub with its powerful northeast shoulder, it could take the crucial refineries several weeks to get back online. One of the best sites to monitor oil and gas damages is The Oil Drum, and I will update you daily on what I’ve learned and how it affects our path toward a sustainable energy transition.
Tags: diesel, Galveston, gasoline, Houston, Hurricane Ike, Katrina, Oil, propane, refineries, Rita, Texas