Hurricane Harvey Spurs Energy Shutdowns

Hurricane Harvey Spurs Energy Shutdowns

As Hurricane Harvey and its aftermath continue on a path of destruction, oil and gas companies located in the epicenter of Texas’ refining industry have been forced to halt operations.

As Hurricane Harvey and its aftermath continue on a path of destruction, oil and gas companies located in the epicenter of Texas’ refining industry have been forced to halt operations.

Energy giants including Exxon Mobil and Valero Energy have shut down South Texas facilities and evacuated workers in the wake of unprecedented flooding, sending ripples across the U.S. oil and gas industry.

According to Business Insider, Goldman Sachs estimates that the storm has taken 3 million barrels a day — or about 17% — of refining capacity offline, which is likely to increase the overall level of crude-oil inventories over the next couple of months.

"The slow moving nature of the storm will likely lead to these shut-downs continuing in coming days and may generate persistent damage as well," Damien Courvalin, the head of energy research at Goldman, said.

Courvalin also said that more shutdowns are to be expected, "with 850 kb/d of capacity in Houston not yet reported offline."

The oil and gas facility shutdowns are causing drops in companies’ shares, but are having more of an immediate impact on gasoline futures, which jumped to two-year highs on Monday – meaning drivers should expect higher prices at the gas pump soon.

The shut downs stand as further evidence that, in the age of climate change, a more flexible approach is needed. The centralized model for fuel production and transportation is out-of-date, exposing the U.S. to economic disruption and threats to national security.

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