Released August 30, 2023 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Hurricane Idalia is bearing down on Florida, and while the industry has yet to react to the storm, it's a reminder of the climate-related risks to the southern U.S. energy sector.
The National Hurricane Center in Miami posted storm surge warnings for parts of Florida, including Tampa Bay, and hurricane warnings for Cuba. "Rapid" intensification is expected in what's likely to become "an extremely dangerous" hurricane.
Idalia early this week was moving north-northwest at around 14 miles per hour. Florida Gov. Ron DeSantis (R) has already declared a state of emergency for dozens of western counties, evacuations are under way, and the National Guard is on standby. The U.S. Coast Guard is already positioned to respond.
Landfall is expected in the so-called Big Bend of Florida, north of Tampa. Areas devastated by last year's Hurricane Ian will likely experience the eastern edge of Idalia when it makes landfall.
This had been a quiet hurricane season up until recently, when as many as five named storms emerged in the Atlantic. So far, none have posed a threat to U.S. energy installation, though climate-related issues have already created challenges.
The Electric Reliability Council of Texas (ERCOT), the grid operator for most of Texas, is pleading for conservation measures as the heat index lingers relentlessly in the triple digits. Offshore, the Bureau of Safety and Environmental Performance has yet to issue any notices on rig evacuations or shut-ins, though that does not mean offshore has been spared.
The regulator last week issued an advisory on worker safety during times of excessive heat. Heat, combined with high humidity, means workers are at risk of everything from a bad sunburn to heat stroke, which can lead to a loss of consciousness.
The west coast of Florida is still picking up the pieces from Hurricane Ian. No major energy disruptions were experienced during last year's Category 5 storm, though with no refineries or pipelines of its own, Florida experienced severe gasoline shortages.
Mansfield Energy (Gainesville, Georgia), which provides delivery services for refined petroleum products, said Tuesday it was on "Code Red" in Florida and southern Georgia, calling for three-day's notice for deliveries "due to unsafe delivery conditions."
Ian last year prompted the evacuation of more than a dozen production platforms and non-dynamically positioned rigs. Three dynamically positioned rigs were moved away from the storm.
In terms of production, Ian knocked about 10% of total oil and 6% of gas production offline in the Gulf of Mexico. Hurricanes, however, typically do not result in any long-term impact on the price of oil, though flooding from Hurricane Harvey in 2017 knocked about a third of the nation's refineries offline, leading to a spike in retail gasoline prices.
The latest commodity at risk is liquefied natural gas (LNG), which is helping European and other major economies adjust to the loss of Russian supplies due to sanctions imposed in response to the early 2022 invasion of Ukraine.
Over the course of five years, the United States has surpassed at least eight other countries to become the world leader in LNG exports. Over the first half of the year, some 67%, or around 7.7 billion cubic feet of gas in liquid form, went to Europe.
Should a major hurricane disrupt shipping lanes or onshore infrastructure, it would be almost certain to put a premium under the price of natural gas just as economies of scale are looking to shore up supplies ahead of the winter heating season in the Northern Hemisphere.
July was already the warmest on record. Hurricane Ian was the third-most expensive weather disaster on record, the strongest to hit Florida since 2018 and the deadliest in nearly a decade. With U.S. stockpiles already depleted, and with the world economy still heavily dependent on fossil fuels, weather-related disasters have become just the latest threat to global energy security.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The National Hurricane Center in Miami posted storm surge warnings for parts of Florida, including Tampa Bay, and hurricane warnings for Cuba. "Rapid" intensification is expected in what's likely to become "an extremely dangerous" hurricane.
Idalia early this week was moving north-northwest at around 14 miles per hour. Florida Gov. Ron DeSantis (R) has already declared a state of emergency for dozens of western counties, evacuations are under way, and the National Guard is on standby. The U.S. Coast Guard is already positioned to respond.
Landfall is expected in the so-called Big Bend of Florida, north of Tampa. Areas devastated by last year's Hurricane Ian will likely experience the eastern edge of Idalia when it makes landfall.
This had been a quiet hurricane season up until recently, when as many as five named storms emerged in the Atlantic. So far, none have posed a threat to U.S. energy installation, though climate-related issues have already created challenges.
The Electric Reliability Council of Texas (ERCOT), the grid operator for most of Texas, is pleading for conservation measures as the heat index lingers relentlessly in the triple digits. Offshore, the Bureau of Safety and Environmental Performance has yet to issue any notices on rig evacuations or shut-ins, though that does not mean offshore has been spared.
The regulator last week issued an advisory on worker safety during times of excessive heat. Heat, combined with high humidity, means workers are at risk of everything from a bad sunburn to heat stroke, which can lead to a loss of consciousness.
The west coast of Florida is still picking up the pieces from Hurricane Ian. No major energy disruptions were experienced during last year's Category 5 storm, though with no refineries or pipelines of its own, Florida experienced severe gasoline shortages.
Mansfield Energy (Gainesville, Georgia), which provides delivery services for refined petroleum products, said Tuesday it was on "Code Red" in Florida and southern Georgia, calling for three-day's notice for deliveries "due to unsafe delivery conditions."
Ian last year prompted the evacuation of more than a dozen production platforms and non-dynamically positioned rigs. Three dynamically positioned rigs were moved away from the storm.
In terms of production, Ian knocked about 10% of total oil and 6% of gas production offline in the Gulf of Mexico. Hurricanes, however, typically do not result in any long-term impact on the price of oil, though flooding from Hurricane Harvey in 2017 knocked about a third of the nation's refineries offline, leading to a spike in retail gasoline prices.
The latest commodity at risk is liquefied natural gas (LNG), which is helping European and other major economies adjust to the loss of Russian supplies due to sanctions imposed in response to the early 2022 invasion of Ukraine.
Over the course of five years, the United States has surpassed at least eight other countries to become the world leader in LNG exports. Over the first half of the year, some 67%, or around 7.7 billion cubic feet of gas in liquid form, went to Europe.
Should a major hurricane disrupt shipping lanes or onshore infrastructure, it would be almost certain to put a premium under the price of natural gas just as economies of scale are looking to shore up supplies ahead of the winter heating season in the Northern Hemisphere.
July was already the warmest on record. Hurricane Ian was the third-most expensive weather disaster on record, the strongest to hit Florida since 2018 and the deadliest in nearly a decade. With U.S. stockpiles already depleted, and with the world economy still heavily dependent on fossil fuels, weather-related disasters have become just the latest threat to global energy security.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
