Refinery closures likely to spur rise in gas prices
DALLAS — Key oil and gas facilities along the Texas Gulf Coast have temporarily shut down because of Tropical Storm Harvey, virtually assuring gasoline prices will rise in the storm’s aftermath.
Even before Harvey made landfall as a hurricane, dozens of oil and gas platforms had been evacuated, at least three refineries had closed and at least two petrochemical plants had suspended operations.
How soon they reopen depends on the severity of flooding and the resumption of power to the areas. Experts say it’s still too early to say, with the storm still moving through the region. But they believe gas prices will increase 5 cents to 25 cents per gallon.
Harvey also continued to take a toll on U.S. air travel Saturday, with more than 960 flight cancellations as of midday, according to FlightAware. Nearly 800 of those canceled flights were scheduled to either depart from or land at Houston’s two airports.
The shipping industry also is expected to be disrupted by the worst hurricane to hit the refinery-rich Texas coast in more than 50 years.
For most of the nation, the oil industry impact might be the biggest issue.
Nearly one-third of the nation’s refining capacity sits in low-lying areas along the coast from Corpus Christi to Lake Charles, La.
Several refineries at greatest risk of suffering a direct strike from high winds had already shut down, but it is the potential for flooding in the Houston and Beaumont areas that could really pinch gasoline supplies.
Flooding and power outages caused by a storm surge are considered the biggest risk.
“The biggest driver of how much this will increase gas prices is how much rain falls in Houston during the next three days,” Andy Lipow, president of consultant Lipow Oil Associates, said Saturday. “We are in a waitand-watch mode.”
For now, Lipow is predicting gasoline prices will rise 10 cents per gallon east of the Rockies.
Tom Kloza, an analyst for the Oil Price Information Service, predicts that prices could rise by up to 25 cents a gallon but that an increase of 5 cents to 15 cents is more likely, assuming that Harvey doesn’t cause lasting damage to refineries.
Flint Hills Resources announced that it would shutter a refinery before Harvey hit, and Valero Energy Corp. said it was closing two facilities in Corpus Christi.
The prospect of supply interruptions sent gasoline futures to $1.74 a gallon, their highest level since April, before they retreated to about $1.67 by Friday afternoon.
In addition to the refinery closures, Formosa Plastics shut its petrochemical plant in Point Comfort and OxyChem suspended operations at its petrochemical plant in Ingleside, according to Platts, an S&P Global division that tracks the commodities and energy industry.
Companies evacuated workers from oil platforms in the Gulf of Mexico, and that is crimping the flow of oil and gas.
We Are Blood, the sole provider of blood to Central Texas hospitals, is experiencing a shortage of blood types O-negative and O-positive.
Donation locations are in Austin at 4300 N. Lamar Blvd. and 3100 W. Slaughter Lane, and in Round Rock at 2132 N. Mays St., Suite 900.
With school starting, Labor Day weekend approaching and the potential for severe weather in the area, the need for the two blood types is anticipated to continue through the next two weeks.
The two blood types are most the important because of their universal tendencies. Type O-negative blood is the universal blood type and can be transfused into any patient. Type O-positive blood is the more common blood type, which means many Central Texas patients can receive it.
People who donate, or attempt to donate, at any center or mobile drive will receive a free P. Terry’s milkshake voucher through Monday. Donors must be in good health, at least 17 years old and weigh at least 115 pounds.
The Texas Diaper Bank is also in need of donations to provide emergency diaper kits to evacuee families. Donate online at texasdiaperbank.org and designate funds to disaster relief.
A Valero oil refinery’s flare continues to burn as Hurricane Harvey makes landfall in Corpus Christi on Friday. But some refineries shut down.