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EIA Warns Severe Hurricane Season Could Disrupt U.S. Oil & Gas

Up to 25 named storms for this year's hurricane season could wreak more havoc on the American oil and gas industry than ever before, the Energy Information Administration (EIA) said on Wednesday in an in-depth analysis of weather's effects on supply and demand. 

"The potential for a stronger hurricane season suggests heightened risk for weather-related production outages in the U.S. oil and natural gas industry," the EIA warned, as meteorologists forecast a "particularly intense" Atlantic hurricane season this year. 

Last year, Atlantic hurricane season saw one out of 20 named storms hit land in the U.S.--none causing any severe disruption or damage of oil and gas industry installations. 

This year, things may be different during the season, which starts on June 1st and runs until the end of November, with hurricanes most commonly hitting the Southeast and the U.S. Gulf Coast. 

The EIA warns that the more severe hurricane forecasts for this year could see oil and gas markets impacted by the potential disruption of crude oil production and refinery operations, with offshore installations of particular concern in the Gulf of Mexico. The agency also warns of the risk of flooding and disruption at offshore floating production facilities and refinery operations. Finally, the EIA warned of potential disruption to LNG exports, which include a capacity of 13 billion cubic feet per day from the Gulf Coast.  

"Recent hurricanes have had a much smaller impact on total U.S. natural gas supply because natural gas production in the GOM has been declining for years," the EIA noted. In 2005, Hurricanes Katrina and Rita caused major natural gas disruptions; however, today, gas production from GOM territories only accounts for under 2% of the country's total.

By Charles Kennedy for Oilprice.com

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Charles Kennedy

Charles is a writer for Oilprice.com More

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