op-ed

The Energy Industry Is Stepping Up In The Wake Of Hurricane Harvey

Hurricane Harvey struck the heart of America’s energy sector. Greater Houston is home to dozens of refineries, pipelines, and petrochemical plants.

Despite this direct hit, energy prices rose far less they did in the aftermath of past storms, thanks to energy companies’ preparedness. Gasoline prices are already falling in Texas.

Energy companies are playing an integral role in the hurricane recovery process. They’re committed to doing all they can to serve communities in need. Luckily, their efforts are aided by two factors.

First, energy companies have made their infrastructure far more resilient in recent years, thereby minimizing recovery times in the wake of natural disasters. Second, the energy industry has banded together to facilitate delivery of its refined products to areas affected by Harvey.

To be sure, Harvey was a tragic and enormously costly storm. It killed dozens of people and damaged thousands of homes. It also knocked more than 20 percent of U.S. refining capacity offline. As of October 5, one Gulf Coast refinery was shuttered, and four were only partly functional.

Several of these refineries closed out of an abundance of caution.

Days before the arrival of Harvey, energy companies interrupted production and took steps to protect employees and facilities. They’ve learned from experience that it’s better to safely and temporarily pause operations than stay open during severe storms. They’ve also beefed up their disaster response protocols, increased coordination with federal and state officials, and created emergency training programs for government response teams.

Most of the refineries that shut down did so for preventive reasons. Companies will soon finish their exacting safety inspections and resume production at full capacity.

Naturally, the temporary loss of refining capacity has reduced gasoline stockpiles, which pushed up the price of the fuel.

It’s important for consumers to note that price increases won’t last long. Hurricane Katrina hit the Gulf Coast in 2005, gas prices rose sharply, but began decreasing in a matter of days.

That’s because when Katrina curtailed supply, the market reacted. Refineries imported extra crude oil, gas and diesel. Drillers ramped up domestic production. Stockpiles were replenished, and prices dropped.

Today, the energy sector is better equipped to handle hurricane-related disruptions. In the past decade, thanks to an American energy renaissance, domestic energy production has doubled. Companies now pump 9.2 million barrels of oil a day. Our nation is the world’s number one producer of oil and natural gas.

Thanks to this production, U.S. gasoline supplies remain abundant. In Harvey’s wake, America had 230 million barrels of stored gasoline — more than it had before Hurricanes Rita and Ike hit.

Companies are working as hard as possible to boost these reserves even further. Across the country, refineries are delaying regularly scheduled maintenance to increase production and ensure drivers receive the fuel they need.

Federal and state governments are lending a hand. They have waived fuel-blending requirements to help refineries produce more gasoline. Likewise, governments have eased transportation restrictions to facilitate crude oil’s journey from refineries and oil tankers to consumers’ gas tanks. For example, the Department of Homeland Security issued a Jones Act waiver that allows companies to ship diesel and gasoline to hurricane-afflicted states on foreign-owned tankers.

Texas’ railroad commissioner has commended energy companies for “working around the clock to get gasoline from terminals to local service stations.” And former George W. Bush energy advisor Robert McNally has noted that both the oil sector and the government are in the process of moving “heaven and earth to make sure that the energy disruptions are as short as possible.”

The resilience is already apparent to drivers. In the week after Harvey’s arrival, the national average gasoline price rose 27 cents — half of the increase motorists faced after Katrina.

Energy companies’ resilient infrastructure and elastic refining capabilities helped mitigate Harvey’s disastrous effects. Firms are also adopting a very hands-on approach to hurricane relief.

When Harvey impeded the city of Beaumont’s water service, Exxon dispatched helicopters carrying water and toiletries to the area. After 400 employees at Occidental Petroleum were forced to evacuate their homes, the company put everyone up — along with their families — at
nearby hotels. Indeed, with the help of an app, Occidental’s CEO was able to make sure all 3,000 of her employees were safe after the storm.

The devastation and suffering caused by Harvey won’t vanish with the receding waters. But hurricane victims can take some comfort from the knowledge that no matter how long recovery takes, the energy sector is here for them.

Michelle Ray is Publishing Editor at the Independent Journal-Review. The Austin resident also hosts “In Deep with Michelle Ray” on FTR Radio.


Views expressed in op-eds are not the views of The Daily Caller.