By now we’ve all seen the news reports, videos and photos of the devastation Hurricane (now tropical storm) Harvey has caused along the Texas Gulf Coast. Miraculously, perhaps, only five deaths have so far been attributed to the storm.
Property damage is expected to soar into the tens of billions, and the area hit hardest by the storm could take years to recover.
Because Houston is the hub of the U.S. energy industry, we’ve been paying close attention to the impact on the region’s production regions, both offshore and onshore, and to the refineries and petrochemical plants that dot the area.
As of Sunday, nearly 2.2 million barrels a day of refinery capacity in Texas had been shut down, nearly half of the state’s total 4.94 million barrels a day of capacity. After waiting to see how the storm developed, refiners on Sunday began shutting down their Houston operations. As of Sunday afternoon these refineries have closed, according to S&P Global Platts:
- Exxon Mobil’s Baytown: 560,500 barrels a day of capacity
- Valero Corpus Christi: 293,000 barrels a day
- Citgo Corpus Christi: 157,500 barrels a day
- Flint Hills Corpus Christi: 296,470 barrels a day
- Magellan Corpus Christi: 50,000 barrels a day
- Buckeye Corpus Christi: 50,000 barrels a day
- Shell Deer Park (Houston): 340,000 barrels a day
- Pasadena: 112,229 barrels a day
- Phillips 66 Sweeny (Houston): 247,000 barrels a day
- Valero Three Rivers: 89,000 barrels a day
In addition to the refineries, about 22% of offshore production — nearly 380,000 barrels a day — has been shut in as has about 830 billion cubic feet per day of natural gas production — just over 25% of usual daily production.
According to Platts, hundreds or even thousands of wells in the onshore Eagle Ford shale play in south Texas are located in Harvey’s path. The region produces about 1.34 million barrels a day of oil. As of Sunday, Exxon had shut in all operations in Harvey’s path in its Eagle Ford operations. BHP Billiton has shut in about 99,000 barrels a day of oil and gas production, and Murphy has shut in 46,000 barrels a day of production.
ConocoPhillips has shut in 161,000 barrels of daily oil and gas production and shut down its six rigs in the Eagle Ford. Statoil also shut down its two rigs in the region.
Pipelines are not escaping the shutdowns. Magellan Midstream shut two of its lines that transport some 675,000 barrels of crude oil a day from the Permian Basin in West Texas to the Gulf Coast. Two Kinder Morgan pipelines have suspended some operations, citing force majeure.
Prices for West Texas Intermediate (WTI) crude oil were down about 0.9% Monday morning, trading at around $47.45 a barrel. Reformulated gasoline for blending (RBOB) traded up about 10 cents at $1.60 a gallon. The longer the Texas refineries remain closed, the higher this price is likely to go. All prices are for October delivery.