About a quarter of all the oil and natural gas produced in the Gulf Coast region of Texas is now offline because of Hurricane Harvey, according to the Interior Department’s Bureau of Safety and Environmental Enforcement.
For oil, that’s the equivalent of about 430,000 barrels of oil per day.
That oil-producing region between Texas and Louisiana is responsible for about one-third of the nation’s total oil and gas production capacity, and hasn’t seen a shutdown of this magnitude because of weather-related events in many years.
Just as important as the oil and gas production is the region’s refining capacity.
Tom Kloza, an oil and gas analyst with the Oil Price Information service was quoted by numerous media outlets as saying gas prices nationwide could see a 5 to 15 cent increase, and that could spike even further if a major refinery suffered direct damage from the winds when Harvey was at full Category 4 strength.
Harvey was downgraded to a tropical storm on Saturday.
Still, Kloza said refinery work is usually only offline briefly, meaning any price spikes are not likely to last long.
Early Sunday afternoon, the White House said President Trump and Vice President Pence had just completed a second cabinet-level meeting to continue to assess and adjust the federal government’s response to the disaster which is expected to cause more damage from flooding than even the 120 mile an hour sustained winds the storm packed when it hit the Texas coast late Friday night.
