See more Hur­ri­cane Har­vey cov­er­age.

The Oklahoman (Sunday) - - NEWS - BY DAVID KOENIG AP Busi­ness Writer

Key oil and gas fa­cil­i­ties along the Texas Gulf Coast have tem­po­rar­ily shut down as Har­vey pounds the re­gion with tor­ren­tial rain and high winds, vir­tu­ally as­sur­ing gaso­line prices will rise in the storm’s aftermath.

Even be­fore the Har­vey made land­fall late Fri­day, 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 Satur­day evening. 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 1,000 flight can­cel­la­tions as of the early evening, ac­cord­ing to FlightAware. Nearly 850 of the 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 re­fin­eryrich Texas coast in more than 50 years.

Here’s how Har­vey is likely to af­fect busi­ness and pock­et­books:


Nearly one-third of the na­tion’s re­fin­ing ca­pac­ity sits in low-lying ar­eas along the coast from Cor­pus Christi, Texas, to Lake Charles, Louisiana.

Sev­eral re­finer­ies at great­est risk of suf­fer­ing a di­rect strike from high winds have 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 wait-and­watch mode.”

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.

In ad­di­tion to the re­fin­ery clo­sures, For­mosa Plas­tics shut its petro­chem­i­cal plant in Point Com­fort, Texas, and OxyChem sus­pended op­er­a­tions at its petro­chem­i­cal plant in In­gle­side, Texas, ac­cord­ing to Platts, an S&P Global di­vi­sion that tracks the com­modi­ties and en­ergy in­dus­try.

Oil and gas

Com­pa­nies have been evac­u­at­ing work­ers from oil plat­forms in the Gulf of Mex­ico, and that is crimp­ing the flow of oil and gas.

The U.S. Bureau of Safety and En­vi­ron­men­tal En­force­ment said work­ers had been re­moved from 86 of the 737 manned plat­forms used to pump oil and gas from be­neath the Gulf.

The agency es­ti­mated that plat­forms ac­count­ing for about 22 per­cent of oil pro­duc­tion and 23 per­cent of nat­u­ral gas out­put in the Gulf had been shut down.

“We could see more pro­duc­tion be taken off­line in the Gulf of Mex­ico” if the path of the storm wan­ders far­ther east, said Jenna De­laney, an oil an­a­lyst for PIRA En­ergy. But, she noted, oil com­pa­nies an­nounced fewer plat­form shut­downs on Fri­day than they had on Thurs­day, which is an en­cour­ag­ing sign.

Exxon Mo­bil closed two of its plat­forms and was evac­u­at­ing all per­son­nel in the ex­pected path of the storm, said spokes­woman Suann Guthrie. Shell halted op­er­a­tions on a big float­ing oil-pro­duc­tion plat­form, and Anadarko evac­u­ated work­ers and shut down four fa­cil­i­ties in the western Gulf while con­tin­u­ing to op­er­ate those east of the storm’s pre­dicted path.

On shore, Cono­coPhillips stopped all op­er­a­tions in the Ea­gle Ford shale for­ma­tion, which lies across a swath of South Texas in­land from the Gulf. A com­pany spokes­woman cited safety and potential dis­rup­tions in get­ting oil and gas from the wells to mar­ket dur­ing the storm.


Ship­ping ter­mi­nals along the Texas coast shut down as the storm ap­proached. Port op­er­a­tions in Cor­pus Christi and Galve­ston closed, and the port of Hous­ton said con­tainer ter­mi­nals and gen­eral cargo fa­cil­i­ties closed around mid­day Fri­day.

Rates for car­ry­ing freight be­tween the Gulf of Mex­ico and the U.S. East Coast rose.


After more than 1,200 flight can­cel­la­tions Fri­day and Satur­day, air­lines al­ready had can­celed an ad­di­tional 823 flights sched­uled for Sunday, ac­cord­ing to Flight Aware’s cal­cu­la­tions on Satur­day evening.

Air­lines were of­fer­ing cus­tomers the chance to resched­ule trips that would take them to Hous­ton, San An­to­nio or Austin from Fri­day through the week­end.


A firm that does fore­casts for in­sur­ance com­pa­nies said wind-dam­age claims could top $6 bil­lion, although it said losses in the low bil­lions are more likely.

Risk Man­age­ment So­lu­tions Inc. said losses from storm surges and in­land flood­ing could be a big­ger source of losses. If the firm is correct, that would put home­own­ers and the gov­ern­ment­backed Na­tional Flood In­sur­ance Pro­gram at risk.

The flood pro­gram is run by the Fed­eral Emer­gency Man­age­ment Agency, which owes the Trea­sury about $23 bil­lion in funds bor­rowed to cover the cost of past dis­as­ters, ac­cord­ing to a re­cent re­port by the U.S. Gov­ern­ment Ac­count­abil­ity Of­fice.

Home­owner poli­cies with in­sur­ance com­pa­nies don’t typ­i­cally cover flood dam­age, yet a rel­a­tively small per­cent­age of home­own­ers have flood in­sur­ance through the fed­eral pro­gram.


A driver works his way Satur­day through a maze of fallen util­ity poles in Taft, Texas.


A cou­ple strolls along the shore Satur­day in McFaddin Beach, Texas, as storm clouds build on the hori­zon the day after Hur­ri­cane Har­vey made land­fall, bat­ter­ing com­mu­ni­ties near Cor­pus Christi. Rains and wind are still ex­pected to im­pact the South­east...


A Na­tional Guard con­voy ar­rives Satur­day in Port Aransas, Texas.


A woman pushes a shop­ping cart Satur­day next to a nearly empty shelf of bread in a gro­cery store in Port Arthur, Texas, a day after Hur­ri­cane Har­vey made land­fall. Lim­its have been placed on some items to help avail­abil­ity to as many cus­tomers as...


A laun­dro­mat’s ma­chines sit ex­posed to the el­e­ments Satur­day after Hur­ri­cane Har­vey ripped through Rock­port, Texas. The fiercest hur­ri­cane to hit the U.S. in more than a decade spun across hun­dreds of miles of coast­line where com­mu­ni­ties had pre­pared...


A sail­boat sits next to a dog groom­ing busi­ness Satur­day in Pala­cios, Texas.

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