Hurricane Harvey has had a severe impact on the Gulf Coast, putting many of our fellow Americans in harm’s way. As more rain continues to fall on Texas and the area of impact expands to Louisiana, providing immediate relief to those affected by the storm is the primary concern. Let’s reach out and lend a helping hand to the communities that help provide our country with the energy we use every day. Please consider lending your support:
- American Red Cross
- United Way of Greater Houston
- Hurricane Harvey Relief Fund
- Houston Food Bank
- Galveston County Food Bank
- Food Bank of Corpus Christi
You can find a more complete list of relief organizations here.
What You Should Know about Preparedness and the Storm’s Aftermath
The oil and natural gas industry has specific guidelines in place to protect their workers and the community, secure infrastructure and ensure environmental protections in the event of a significant event like Hurricane Harvey.
Q: When did facilities shut down for this storm?
A: Prior to the storm, several natural gas and oil companies shut down production from several facilities and evacuated personnel from offshore platforms. Today a number of refineries from Corpus Christi to the Houston area are on reduced runs or shut down to prevent damages and ensure safety and environmental protections.
Q: What should we expect in the hurricane’s aftermath?
A: Facilities will be assessed for damage, and determinations will be made for prudent and environmentally safe ways to bring infrastructure and other assets back online. Hurricanes in 2005 and 2008, as well as Superstorm Sandy in 2012, prompted federal and state governments to take action to increase supply and ease distribution challenges. State and federal governments work with the industry to exercise their authority to waive certain fuels and transportation requirements during these extreme and unusual events and to ensure that commercial power is reestablished for these critical assets.
Q: What is the storm’s potential impact on gasoline prices?
A: With significant events, such as hurricanes, that cause temporary refinery shut downs, there is the potential for fuel prices to be affected at the pump in the short term. While storms and other big events (such as wars and other occurrences) can impact prices, potentially resulting in significant price swings, ultimately, prices are set by supply and demand and may be influenced by perceptions about future supply and demand . As has been the case with previous storms, Federal Trade Commission investigation after Hurricane Katrina found “no instances of illegal market manipulation that led to higher prices during the relevant time periods.”
Q: Why does it sometimes seem like prices at a gasoline station are quick to go up and slow to come down?
A: Gasoline stations have to plan to buy the next tank of gasoline, which is often 10,000 gallons of fuel. So, when the prices on the wholesale market rise, the station owner is trying to ensure he or she can keep their street prices competitive while ensuring they can have the cash flow to buy the next tank full. Historically, as the supply normalizes, prices have tended to normalize.
Additional points about gasoline prices:
- The industry is focused on helping keep the market supplied. We must let markets work. Remember, by the end of 2005, U.S. gasoline prices were lower than they were before Hurricanes Katrina and Rita hit the Gulf region. The market responded to hurricane-related supply disruptions by marshalling supplies and avoiding shortages by attracting gasoline imports, maximizing production from operating refineries and relying on inventories.
- Nationwide, current inventories of crude oil and refined products are relatively high, and these supplies could help offset storm-related disruptions to both. While issues may arise if infrastructure constraints restrict access in certain regions, these supplies could help offset supply disruptions that may be caused by the storm. In a tight market, a perception that supplies are at risk of not meeting demand can put upward pressure on prices. When supplies are perceived to be abundant relative to demand, there is typically downward pressure on prices.