THIS IS AN EDITORIAL I didn't expect to write. Those of us in PennWell's Houston office are working from home this week in the aftermath of Hurricane Harvey, which is one of the worst natural disasters to strike a major metropolitan area in the United States. That's because our office is shut down temporarily due to flooding. As I write this on Tuesday, Aug. 29, I am one of the lucky ones who has both power and internet service. Some of my fellow employees do not.
Although Harvey made landfall about 180 miles down the Texas coast from Houston, our city was on the so-called "dirty" side of the tropical cyclone, which means we got more wind and rain from the circulating storm bands than places to the west of the storm. Harvey stalled for several days, which meant a lot more rain fell on Houston and the surrounding area. The city and metropolitan area has about seven million people and lies on a flat coastal plain. Water does not run off quickly and flooded streets are a way of life here.
The rainfall amounts we received are staggering, upwards of 40 inches in most parts of Harris County and the surrounding counties. More than 50 inches in some of the worst-hit areas. And it is still raining as I look out my window. This should subside in the next day or so, as the storm is projected to move to the east and then in an arc to the northeast.
The last projection I saw has it moving eventually over Washington, DC, and Chesapeake Bay, and then into the Atlantic Ocean. It may be exhausted by then and dissipate because it will likely only be a tropical depression. Conceivably though, it could reform as a tropical storm if it crosses into the warm waters of the Gulf Stream. Wouldn't that be incredible? Harvey started as a mere tropical wave off the coast of Africa and gradually developed into a tropical depression and then a tropical storm as it moved toward the Lesser Antilles and westward over the Caribbean Sea. Then it crossed Mexico's Yucatan Peninsula and began to gather strength in the Bay of Campeche. It exploded into a Category 4 hurricane just before making landfall just north of Corpus Christi, Texas, on Friday night, Aug. 25, and the early hours of Saturday, Aug. 26, causing widespread devastation to the coastal communities of Rockport and Port Aransas.
From a meteorological perspective, that was quite a journey. I'll be interested to see if the system makes it across the eastern US all the way to the Atlantic. However, we shouldn't lose focus on the tragedy caused by Harvey. Although the death toll is relatively low for such a powerful weather event as this, tens of thousands of people have been displaced from their homes and many may not be able to return for months. Businesses are closed, some for an indefinite period, and refineries, LNG facilities, and petrochemical complexes from Corpus Christi north to Houston and the Beaumont-Port Arthur area in Texas, into southeastern Louisiana were shut down in anticipation of the storm. Offshore facilities were evacuated in advance of the hurricane as well.
Companies are only now beginning to assess damages. So far, I haven't heard any estimates of the overall cost of Harvey since it has not yet left the area and is an ongoing threat until it does. However, I suspect the costs will rival or even exceed the damages caused by Hurricane Katrina in 2005 and Hurricane Sandy in 2012. Katrina stuck New Orleans and flooded that city when the levees broke, and Sandy caused significant flooding in lower Manhattan and from southern New England to New Jersey and Delaware.
In preparation for Harvey's arrival, offshore platforms in the Gulf of Mexico were shut down and crews evacuated. More than 20% of oil production from the GoM was taken offline with additional onshore volumes shut in, mainly in the Eagle Ford shale play in South Texas.
Four terminals in Corpus Christi were closed to tanker traffic, and some vessels were sent out to sea where they would be safer than being moored in port. All shipping of crude oil and refined products was halted. Farther up the coast, traffic was restricted on the Houston Ship Channel, one of the world's busiest ports and a major importer of crude oil and exporter of refined products. Nearly 50% of the nation's refining capacity is located along the Gulf Coast, and at least 10 refineries were shut down prior to the storm's arrival.
The overall impact of Harvey on energy markets is expected to be widespread. NYMEX gasoline contracts have already risen to their highest level since August 2015. Energy traders are concerned about shortages and higher prices for refined products, especially reformulated gasoline and low-emission diesel fuel.
Consumers will bear the brunt of higher fuel prices as markets deal with much lower volumes from traditional Gulf Coast suppliers. Industry analysts say this will likely continue for several months until a balance is restored. Recovery by the untold number of people impacted by Harvey will take a lot longer.
