In addition to the devastating loss of life and personal property Hurricane Harvey has brought in its wake, the major storm also crippled onshore oil and natural gas production in the Gulf of Mexico, which is responsible for 20% of nationwide US output.
Yesterday, energy analysts from Goldman Sachs estimated the daily toll of the storm at 3 million barrels a day, which adds up to 16.5% of the total US capacity. One million barrels a day of crude-oil production are also shut down – 11% of the current 9.3m barrels a day the US put out before the storm. There’s been a 3% decrease in natural gas production as well.
Most of the closed refineries are in or around Corpus Christi, and were shut down as precautionary measures. Houston refineries started closing on Sunday, and the number of closed refineries may rise further as rain continues.
The Eagle Ford shale, which has three billion barrels of oil reserves was in the direct path of Harvey, and produces around 1.34m barrels a day, according to Bentek Energy. Offshore US Gulf operators closed 378,633 barrels a day of production, or 21% of total crude-oil output and 26% of natural gas production in preparation for the storm as well.
As recovery continues in Texas, oil and gas refineries may need to slow production to repair damage. Rising oil prices should serve to offset some of the costs of rebuilding.