Industrial Info Webinar: Gulf Coast Industries Recovering from Hurricanes Sally, Laura, Reliable Power Still an Issue

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Researched by Industrial Info Resources (Sugar Land, Texas)--It's been a very busy hurricane season along the U.S. Gulf Coast. So far, six named storms have made landfall from south Texas to Alabama. The overall hurricane season has been so busy that the National Oceanic and Atmospheric Administration (NOAA) has run out of official names for the storms and has resorted to using the Greek alphabet to name new ones, for the first time since 2005.

In a Tuesday webinar, some of Industrial Info's top industry experts recapped the impacts of hurricanes Sally and Laura, as well as the recovery efforts that have taken place. Click here to view this webinar.



Hurricane Laura, the most powerful of the storms, slammed into Cameron, Louisiana, near the Texas border, on August 27, causing an estimated $10 billion in damage in southwestern Louisiana and southeastern Texas.

Chris Paschall, Industrial Info's Vice President of Research for Petroleum Refining, said Laura had the potential to impact more than 800 industrial plants when it made landfall, but wound up impacting only 183. Out of that number, 19 power and energy infrastructure facilities in Industrial Info's database remained offline as of Tuesday. Most of them are onshore facilities that were still awaiting the return of reliable power.

Britt Burt, Vice President of Research for the Power Industry, said that in the Lake Charles area, two power plants have since returned to service after Laura, while a third is likely to remain down until December.

"That's only one piece of it, the generation piece...you got to have the transmission and distribution systems in place too," Burt noted.

On the distribution side, Entergy Corporation (NYSE:ETR) (New Orleans, Louisiana) has replaced three-fourths of the 4,700 transformers, along with 29,000 spans of wire and distribution poles, that were damaged by Hurricane Laura.

"On the transmission side, (Entergy) had 1,400 structures that were damaged, and they have replaced about 800 of those. Almost all of the substations have been repaired or replaced. There were 316 of those," Burt said.

Progress is being made, but the key to industrial recovery is the restoration of reliable power. "It is something that Entergy has never seen before. It is total devastation of their transmission system," Burt continued. "So this could go on for a number of weeks before we have reliable power, and that's the key word."

Burt said one of the key lessons learned by the Power Industry over the past several years is "how to pull resources to respond to this type of event for the transmission and distribution systems." In the case of Hurricane Laura, about 25,000 workers from across the U.S. and Canada converged on southwestern Louisiana to get the job done. "So a big lesson is how to have linemen and repairmen on call and on standby and at the ready from regions outside the area that has been affected by the storm."

In the Oil & Gas Production arena, 268 offshore facilities were shut in during the past month due to hurricanes Laura and Sally, and now Tropical Storm Beta along the Texas coast, said Shane Mullins, Vice President, Product Development Energy Markets. Cumulative shut-ins resulting from Laura and Sally amounted to 17.3 million barrels of lost production, he said. As of September 20, 179,237 barrels per day (BBL/d) of oil remained shut in, while 388,533 million BBL/d of production has been restored.

Onshore, Sempra Energy's (NYSE:SRE) (San Diego, California) Cameron liquefied natural gas (LNG) export facility in Louisiana was still offline as a result of Hurricane Laura, but much progress has been made in restoring power to the area.

"There's enough power for testing to begin of basic systems at Cameron LNG, and they are still waiting for reliable power to be restored before they resume operations of one of their trains at the facility," Mullins said. The facility is expected to be in full operation by the end of October, and first LNG cargo loadings could resume as early as October 8 as part of the phased restart.

Hurricane Sally made landfall as a Category 2 storm on September 16 near Gulf Shores, Alabama.

Trey Hamblet, Industrial Info's Vice President of Research for Chemical Processing, said that as Sally was approaching the Louisiana coast, "we were very concerned this would be a tremendous storm taking in New Orleans, Baton Rouge, and that entire energy corridor along the Mississippi (River).

But Sally then shifted its course and slammed into Alabama and parts of Mississippi, which have fewer petrochemical, refining and power operations. Even so, more than 110 plants, ranging from plastics producers to pharmaceutical facilities, closed their doors in advance of the storm, causing the temporary displacement of 25,000 workers for one to three days. Sally also caused multiple port closures in Mississippi and Florida.

On the positive side, out of the 285,440 customers who lost power as a result of Sally, power has been restored to 265,090 of them.

Three Gulf Coast refineries remain shut as a result of the hurricanes, Paschall noted. Two of them, in the Lake Charles, Louisiana, area, are awaiting the return of reliable power.

The third refinery, Phillips 66's (NYSE:PSX) (Houston, Texas) Alliance refinery in Belle Chasse, Louisiana, was idled in advance of Hurricane Sally and incurred no damage. However, the company decided to accelerate a planned turnaround on a process unit, and the facility is likely to remain down for the remainder of this year due to compressed profit margins, Paschall said.

And then there's Beta...
Tropical Storm Beta made landfall on the Texas Coast this week. The storm wasn't packing monster winds, but it was carrying a large amount of rain, as well as storm surges that were causing local flood events. Texas ports between Corpus Christi and Houston were closed, impacting oil and fuel tanker traffic, Paschall said.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.