Storms wreak havoc with both the economy and the environment. Preliminary estimates put the economic cost of Hurricane Harvey at $190 billion, making it the costliest natural disaster in US history. There are also costs in the fossil fuel sector associated with Hurricane Harvey passing right through the hub of the US petroleum and natural gas industries in southeast Texas.
Oil companies including Royal Dutch Shell, Anadarko Petroleum, and Exxon Mobil shut down operations and evacuated employees from their offshore rigs in the Gulf of Mexico. Oil refineries also shut down leaving a million barrel shortfall. Crude oil prices have been steadily climbing with many fearing it could top $50 a barrel.
The disruption the fossil fuel industry in Texas significantly impacts domestic energy markets and creates a ripple effect on the national economy. As of September 01, 2017 the national average for regular was $2.54 a gallon, an increase of 18 cents in the last week. During this time prices jumped at least 10 cents a gallon in 24 hours in Texas, Ohio, Georgia and the Mid-Atlantic states. As of September 4th national average gas prices were $2.67 but some are predicting prices as high as $2.75 a gallon in the coming days. Some Dallas area gas stations were charging almost $4.00 a gallon. Many Dallas gas stations have run out of gas presaging long lines and shortages all the way up the east coast.
This is the fourth time in less than a decade that there has been massive storm related energy infrastructure disruptions in Texas. Climate change models predict that the intensity of storms will continue to increase and this will increase both economic and environmental impacts. As if to prove the point one of the strongest Hurricanes ever is currently lashing the Caribbean and barrelling towards the US mainland.
Before the dust settled from Hurricane Harvey another even stronger storm has formed in the Caribbean. It has been named Hurricane Irma and it is poised to hit the US mainland in the coming days. Hurricane Irma has been referred to as "potentially catastrophic" by CNN. It has maximum sustained wind speeds of 180 mph. That is well above the 157 mph threshold for a Category 5 hurricane. These intense storms reveal the destructive synergistic nexus between fossil fuels and climate.
The burning of fossil fuels emit greenhouse gases that trap heat and increase water vapor in the atmosphere. This in turn fuels extreme weather events that disrupt fossil fuel production, refinement and transportation. In addition to increasing fuel prices, these storms destroy fossil fuel infrastructure sometimes resulting in spills that contaminate the environment. This is especially true of Texas which is home to a dense concentration of fossil fuel infrastructure.
According to the EIA approximately 33 percent of US refining capacity comes from the Texas Gulf Coast. Approximately 25 percent of US natural gas production and 50 percent of US oil production originates in Texas and the Gulf of Mexico. The latter accounts for almost 20 percent of US crude oil production.
Harvey is hardly the first storm to disrupt the fossil fuel industry. The last three hurricanes to hit the US Gulf Coast (Gustav and Ike in 2008 and Hurricane Isaac in 2012) all affected oil and natural gas infrastructure. According to the EIA these three storms all shut in more than one million barrels per day of crude oil production and more than three billion cubic feet per day of natural gas production. The storms also shut down significant pipeline and refining capacity. This will have both a national and a global affect. Residents of Canada are already feeling the affects of the storm at the pump.
Distributed energy makes sense in the context of climate change and increasingly intense extreme weather. Highly concentrated oil infrastructure is vulnerable to economic disruption and threatens national security. Flexible clean alternatives including onsite solar and wind facilities offer a more nimble approach to secure energy generation.
Clean energy sites are also subject to interruptions from extreme weather but these are minor compared to fossil fuels. Like the fossil fuel industry the burgeoning wind industry in Texas went off line in advance of Harvey but this did not impact access to electricity in Texas. Unlike renewables the production, refining and transportation of fossil fuels are all especially vulnerable to Hurricanes. The environmental, economic, energy and health impacts of a storm are far worse for fossil fuels than they are for renewables.
Fossil fuels still rely on an out-dated centralized model. The growth of both renewables and energy storage have pushed the US electricity grid towards a more diverse and distributed model. It would appear that the Energy Department shares the view that reforms are required.
At the same time that Harvey was making landfall in the US the Energy Department released its review of national grid resiliency. Despite the study's support for nuclear power and coal (it suggests the EPA should ease permitting requirements for new coal fired plants) the study also seems to indicate that there is value in integrating more renewables into the grid.
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