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Released August 16, 2023 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Climate issues may be the latest test to both the upstream and downstream segments of the U.S. energy sector, with an updated forecast pointing to a worse-than-expected hurricane season in the Atlantic Ocean.
The melt-off from the Mendenhall glacier in Alaska caused major flooding in the capital, Juneau.
"Decades worth of erosion happened in one weekend," said Rick Thoman, an Alaska climate specialist at the Alaska Center for Climate Assessment and Policy.
While not a threat to the state's oil and gas fields, the glacial melt could serve as a warning for operators planning to drill in the tundra at the controversial Willow oil project from ConocoPhillips (NYSE:COP) (Houston, Texas).
Conoco sees the potential for 100,000 barrels per day (BBL/d) of oil at a project that includes drill sites, infield roads, new pipelines, a processing facility and infrastructure necessary to transport the oil from the Willow acreage. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for related reports.
The company would also, when necessary, use chillers to keep the ground frozen enough to support that infrastructure. Last month was the warmest on record, suggesting temperature control may be an issue at Willow.
Further south, the National Oceanic and Atmospheric Administration (NOAA) revised its forecast to warn of an "above-normal" hurricane season in the Atlantic, citing an ongoing El Nino and above-normal sea temperatures.
"Considering those factors, the updated outlook calls for more activity, so we urge everyone to prepare now for the continuing season," said Matthew Rosencrans, the lead hurricane forecaster at NOAA.
So far, it's been a decidedly below-average hurricane season, with no major storms posing a threat to onshore or offshore installations yet this year. Two storms, however, are brewing off the coast of West Africa, an ominous sign given the latest forecast from NOAA.
Last year's Hurricane Ian was the first Category 5 hurricane since 2019, striking a major blow to coastal infrastructure in Florida. Florida has no refineries to produce its own gasoline, nor does it have pipelines for delivery.
Instead, the state relies heavily on maritime deliveries for refined products, leaving it highly vulnerable to storm-related disruptions.
But it was the 2017 hurricane season that was the costliest on record, with two Category 5 storms--Irma and Maria--contributing to the estimated $300 billion in damage.
Even smaller storms can have an impact. Ian only managed to strengthen to a Category 1 storm, though some 90% of the total offshore oil and 75% of the total gas operations were shut-in by the storm.
Any outages this year to U.S. oil and gas operations, whether it be in Alaska or in the Gulf of Mexico, would come at a time of supply-side and geopolitical concerns globally. Crude oil prices for weeks have been supported by production restraint from the likes of Saudi Arabia, while tensions in the Persian Gulf could pose a threat to maritime shipments through the region.
Meanwhile, any outages in the Gulf of Mexico would undermine energy security in Europe, given the recent surge in U.S. exports of liquefied natural gas that's replacing some of the Russian products lost to Western sanctions.
Even with higher prices, the push for clean energy and inflationary pressures, global oil demand is expected to hit a record this year, according to the International Energy Agency (IEA). On weather- and climate-related issues, meanwhile, the IEA is already seeing an impact upstream.
"Refiners are struggling to keep up with demand growth, as the shift to new feedstocks, outages and high temperatures have forced many operators to run at reduced rates," it said.
Should the NOAA's forecast prove accurate, it would pose yet another threat to a global market reeling from supply-side pressures.
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 melt-off from the Mendenhall glacier in Alaska caused major flooding in the capital, Juneau.
"Decades worth of erosion happened in one weekend," said Rick Thoman, an Alaska climate specialist at the Alaska Center for Climate Assessment and Policy.
While not a threat to the state's oil and gas fields, the glacial melt could serve as a warning for operators planning to drill in the tundra at the controversial Willow oil project from ConocoPhillips (NYSE:COP) (Houston, Texas).
Conoco sees the potential for 100,000 barrels per day (BBL/d) of oil at a project that includes drill sites, infield roads, new pipelines, a processing facility and infrastructure necessary to transport the oil from the Willow acreage. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for related reports.
The company would also, when necessary, use chillers to keep the ground frozen enough to support that infrastructure. Last month was the warmest on record, suggesting temperature control may be an issue at Willow.
Further south, the National Oceanic and Atmospheric Administration (NOAA) revised its forecast to warn of an "above-normal" hurricane season in the Atlantic, citing an ongoing El Nino and above-normal sea temperatures.
"Considering those factors, the updated outlook calls for more activity, so we urge everyone to prepare now for the continuing season," said Matthew Rosencrans, the lead hurricane forecaster at NOAA.
So far, it's been a decidedly below-average hurricane season, with no major storms posing a threat to onshore or offshore installations yet this year. Two storms, however, are brewing off the coast of West Africa, an ominous sign given the latest forecast from NOAA.
Last year's Hurricane Ian was the first Category 5 hurricane since 2019, striking a major blow to coastal infrastructure in Florida. Florida has no refineries to produce its own gasoline, nor does it have pipelines for delivery.
Instead, the state relies heavily on maritime deliveries for refined products, leaving it highly vulnerable to storm-related disruptions.
But it was the 2017 hurricane season that was the costliest on record, with two Category 5 storms--Irma and Maria--contributing to the estimated $300 billion in damage.
Even smaller storms can have an impact. Ian only managed to strengthen to a Category 1 storm, though some 90% of the total offshore oil and 75% of the total gas operations were shut-in by the storm.
Any outages this year to U.S. oil and gas operations, whether it be in Alaska or in the Gulf of Mexico, would come at a time of supply-side and geopolitical concerns globally. Crude oil prices for weeks have been supported by production restraint from the likes of Saudi Arabia, while tensions in the Persian Gulf could pose a threat to maritime shipments through the region.
Meanwhile, any outages in the Gulf of Mexico would undermine energy security in Europe, given the recent surge in U.S. exports of liquefied natural gas that's replacing some of the Russian products lost to Western sanctions.
Even with higher prices, the push for clean energy and inflationary pressures, global oil demand is expected to hit a record this year, according to the International Energy Agency (IEA). On weather- and climate-related issues, meanwhile, the IEA is already seeing an impact upstream.
"Refiners are struggling to keep up with demand growth, as the shift to new feedstocks, outages and high temperatures have forced many operators to run at reduced rates," it said.
Should the NOAA's forecast prove accurate, it would pose yet another threat to a global market reeling from supply-side pressures.
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).
