Hurricane Harvey Could Impact Gas Prices Nationwide; Oil Rig Workers Evacuated

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August 25, 2017
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Hurricane Harvey Could Impact Gas Prices Nationwide; Oil Rig Workers Evacuated

Story Highlights

Some of the first people to be impacted by Hurricane Harvey will be the workers manning the numerous oil rigs stationed in the Gulf of Mexico.

As the storm forces refineries to reduce or shut down capacity, consumers nationwide might feel the impact at the pumps.

As Hurricane Harvey heads for the Texas coast, some of the first people to be impacted are the workers manning the numerous oil rigs stationed in the Gulf of Mexico, but the effects of the storm on oil production could impact all Americans at the pump.

Royal Dutch Shell said it was evacuating all personnel from its roughly 100,000-barrel-per-day Perdido oil and gas production platform as a precaution, the Associated Press reported.

(MORE: Impacts from Hurricane Harvey)

Anadarko Petroleum Corp. told Bloomberg earlier this week the company was removing non-essential staff from some production platforms in the Gulf of Mexico in response to weather conditions. Cheniere Energy Inc. “activated” the severe weather team at its Sabine Pass LNG export terminal in Louisiana, spokesman Eben Burnham-Snyder told Bloomberg by email, adding: “At this time no production impacts expected.”

Exxon Mobil Corp. said it will cut output at its Hoover production platform in the Gulf of Mexico ahead of the storm. The company is also working on plans to evacuate staff in stages from offshore facilities in the path of the storm, spokeswoman Suann Guthrie told the AP.

Widespread Gasoline Price Hikes Likely

The storm could affect gasoline supplies not only locally, but nationwide. As the storm forces refineries to reduce or shut down capacity, consumers nationwide might feel the impact at the pumps. Experts are expecting gas price hikes anywhere between five to 15 cents per gallon over the next week, USA Today reports.

“Obviously if a refinery is underwater, it can’t do a whole lot to produce gasoline,” GasBuddy petroleum analyst Patrick DeHaan told USA Today. “It’s just a matter of time before they start curtailing production at those refineries.”

(MORE: Latest Harvey Forecast)

Corpus Christi, which is directly in the path of the storm, is a major oil and gas refining and export hub. According to a report from Reuters, Valero Corp, Flint Hills Resources and Citgo Petroleum have almost 750,000 combined barrels per day of refining capacity in the region.

About 17 percent of the nation’s crude oil output and 5 percent of dry natural gas output comes from the Gulf of Mexico, according to the U.S. Energy Information Administration. More than 45 percent of the nation’s refining capacity is along the Gulf Coast.

“Over 45 percent of total U.S. petroleum refining capacity is located along the Gulf coast, as well as 51 percent of total U.S. natural gas processing plant capacity,” USIA noted.

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