15 out of 20 refineries are back to normal levels after Harvey; Irma-caused power outages interrupted natgas demand
The impacts of Hurricane Harvey are slowly fading, as companies work to bring operations back to normal.
Hurricane Harvey plowed into the heart of the U.S. refining industry, forcing many large facilities offline. According to IHS, 20 refineries were significantly affected. Some were forced to shut down due to the flooding and power loss associated with Harvey, while others were forced to operate at lower rates due to problems with crude supply, as pipelines were affected like everything else.
These problems meant total input to Gulf Coast refineries dropped by 3.2 MMBPD in a single week, a decline of 34%. Companies have been hard at work returning facilities to operation, and have made significant progress.
According to IHS, 15 of the 20 affected refineries are now at or near normal operating rates. Four of the remaining five are in the process of restarting and ramping up activities. Currently, there is about 1 MMBPD of distillation capacity offline, meaning that almost 70% of what came offline has been restored.
IHS reports that it is difficult to predict how quickly the remaining refineries will be able to return to full operations. The facilities that are still offline are large and complex, and could take more than a week to restart activities in ideal conditions. That being said, progress so far has been good and no major difficulties are expected.
The effects of the hurricane are also visible in inventories, with crude and gasoline stocks significantly affected. According to the EIA, crude inventories have risen by about 15,060 MBBL in the past three weeks, nearly enough to push current levels back into record territory again. Gasoline inventories, on the other hand, have fallen to levels not seen since 2015.
Irma cut demand for natural gas in Florida
While the gulf coast was recovering from Harvey, Hurricane Irma made landfall on Florida, creating similar disruption. While Florida is neither a major producing or refining state, this will still have an effect on energy markets. According to the EIA, the storm cut power to 64% of all electricity customers, a total of 6.7 million.
Power demand fell by a similar level, falling to 7.2 gigawatts soon after landfall. This is 64% lower than the amount of power consumed at that point last year. Natural gas plant represent nearly 70% of all Floridian power generation, so this storm created a significant, if temporary, drop in the demand for natural gas.
As in Texas and Louisiana, though, companies have been hard at work bringing operations back to normal. Five days after Irma’s landfall, the share of customers without power fell from 64% to 18%, and power demand has returned to nearly normal levels.
