Storms may disrupt energy production

06 17, 2013 by Daily Comet

The U.S. Energy Administration said it expects greater disruption of energy production in the Gulf of Mexico this hurricane season compared to last.

The administration estimated storm-related production disruption in the Gulf at 19.3 million barrels of crude oil and 46.4 billion cubic feet of natural gas in 2013. Hurricane season in 2012 saw disruption of 14.3 million barrels of crude oil and 32.1 billion cubic feet of natural gas, according to the report.

The report is a supplement to the administration's monthly short-term energy outlook.

The agency states its estimation is based on the National Oceanic and Atmospheric Administration's Atlantic Hurricane Season Outlook released May 23. That report estimated a 70 percent probability that 13 to 20 named storms will form in the Atlantic Basin over the next six months including seven to 11 hurricanes.

The report says an analysis of current production and predictions for this storm season point toward a 58 percent chance production will see greater interruption this year.

Putting the estimated interruption into context, the report states a potential shut-in of 19.3 million barrels of crude is just 1 percent more than one day's crude oil input to all the refineries in the United States.

The report noted that predicting potential damage is difficult as it depends on where storms impact.

“Even a strong storm on the eastern seaboard likely won't disrupt (Gulf) production, although it may wreak havoc for humans and businesses and temporarily reduce energy demand. On the other hand, a more moderate storm that barrels through the middle of the (Gulf) and goes onshore along the Gulf Coast could cause significant harm to oil and natural gas production offshore,” the report states.

The report also says such interruptions have a lesser impact than in previous years because the Gulf's share of oil production has dipped.

“In 1997, 26 percent of the nation's natural gas was produced in the federal Gulf of Mexico; in 2012, that number was 6 percent. The (Gulf) share of crude oil production also has declined, from 26 percent in 2007-11 to 19 percent last year,” the administration noted in an earlier report.

Last year saw an above-average number of storms with 19 named storms, including nine tropical storms and 10 hurricanes.

Though it was an above-average season, only two storms affected production in the Gulf.

Tropical Storm Debbie caused a shut-in of about 2.7 percent of the typical monthly crude and natural gas production. Hurricane Isaac caused a reduction of 27 percent the normal monthly output, according to the Bureau of Safety and Environmental Enforcement.

Despite taking a direct hit from Isaac's 100 mph winds and surge, Lafourche's Port Fourchon closed for only two days. Following the storm, Port Director Chett Chiasson said the port was well positioned to take a hit like Isaac's 7-foot surge as it sits at a higher elevation than the surrounding land.

Chiasson noted the port reinforced many of its aging facilities following 2008's hurricanes Gustav and Ike, which paid off as workers were able to reopen facilities shortly after Isaac passed.