Tropical Storm Hurtles Toward Texas, Threatens to Strengthen to Category 3 Hurricane

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Hurricane Harvey is expected to strengthen into a Category 3 hurricane before it makes landfall late Friday along the Texas Gulf Coast, forcing oil workers off Gulf of Mexico platforms, sending gasoline prices higher and causing airlines to prepare for flight disruptions.

Storm-surge watches have been issued for parts of Texas. Harvey, with hurricane force winds near 110 mph, would be the first hurricane to strike Texas since Hurricane Ike in 2008. The National Hurricane Center said widespread rainfall amounts through next Wednesday near the Texas coast could range up to 35 inches.

Nearly half of U.S. refining capacity is on the U.S. Gulf Coast from Alabama to Texas, according to a report from CNBC, and nearly one-third of U.S. capacity appears to be in Harvey’s path on the Texas and western Louisiana coastlines.

According to S&P Global Platts, refiner Flint Hills (owned by Koch Industries) is shutting down is 296,470 barrel a day refineries in Corpus Christi. Other refiners (Valero, Marathon, Phillips 66 and Shell) say they are monitoring the storm and have not announced any closures. The Gulf Coast is home to 4.94 million barrels a day of refining capacity in Texas and another 3.7 million barrels a day in Louisiana.

Just over 9.5% of oil production (about 167,000 barrels a day) from the Gulf of Mexico had been shut in as of around noon Thursday. More than 14.5% of Gulf natural gas production (472 million cubic feet per day) also has been shut in. Production companies have evacuated 39 platforms (about 5.3% of the 737 manned platforms in the Gulf of Mexico).

Shell has shut in its Perdido floating platform, which produces about 100,000 barrels of crude a day. Exxon Mobil is curtailing its Galveston 209 platform, and Anadarko has shut down production at four fields.

NuStar Energy and Magellan have shut down terminals in Corpus Christi, but Magellan’s pipelines in the Houston Ship Channel area are operating as usual.

Gasoline futures rose as some traders speculated the flooding could temporarily keep gasoline from Texas and western Louisiana off the market because of transportation problems or closed refineries.

The airlines that serve the region — including United, American, Delta, Frontier, JetBlue and Southwest — have issued weather waivers for passengers to change their flights without penalty or fees, some beginning Thursday, in advance of the weekend.

Earlier this month, the National Oceanic and Atmospheric Administration said there was a 60% chance of an above-normal hurricane and tropical storm season, up from NOAA’s May prediction of 45% as the hemisphere enters the peak time for storm activity.

NOAA forecast 14 to 19 named storms, an increase from the May forecast range of 11 to 17, and a slight increase of two to five major hurricanes from two to four. This would be the most storm activity since 2010, NOAA said.

An average hurricane season in the Atlantic, which runs from June 1 to November 30, produces 12 named storms, of which six become hurricanes, including three major hurricanes.

In 2010 there were 12 hurricanes and 19 named storms total.