The National Oceanic and Atmospheric Administration (NOAA) released its 2024 Atlantic hurricane season outlook on Thursday and is predicting above-normal hurricane activity in the Atlantic basin this year.
The likelihood of an especially active Atlantic hurricane season raises concerns about weather-related disruptions in the U.S. oil and natural gas sector, according to federal energy officials.
NOAA’s official hurricane forecast calls for 17-25 named storms this year, of which 8-13 may become hurricanes. It is the largest number of named storms ever forecast by the agency, surpassing the 14-23 range predicted in 2010.
The U.S. Energy Information Administration (EIA) said hurricanes mainly affect the oil market by disrupting offshore oil production and refinery operations in the Federal Offshore Gulf of Mexico (GOM). Last year, the area accounted for 14% of total U.S. crude oil production.
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FILE: The Kobe Chouest platform supply vessel sits anchored next to the Chevron Corp. Jack/St. Malo deepwater oil platform in the Gulf of Mexico in the aerial photograph taken off the coast of Louisiana, U.S., on Friday, May 18, 2018.
(Luke Sharrett/Bloomberg / Getty Images)
“Offshore oil and natural gas floating production units must contend with some of the most severe hazards associated with hurricanes and tropical storms; they must have emergency procedures to evacuate nonessential personnel and temporarily halt production,” the agency said.
Refining of crude oil is also affected by hurricanes along certain parts of the Gulf Coast. Refineries along the Texas and Louisiana Gulf coasts account for almost half of U.S. refining capacity, the EIA notes. These facilities are at risk of flooding or power outages during major storms or hurricanes.
Like offshore floating production facilities, refineries may be temporarily shut down in anticipation of major storms, and severe damage could lead to permanent closures, as seen in 2021 with ConocoPhillips Alliance Refinery in Belle Chase, Louisiana, the EIA reports.
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The ConocoPhillips Alliance Refinery stands along the Mississippi River outside outside Belle Chase, Louisiana, U.S., on Saturday, July 3, 2010.
(Derick E. Hingle/Bloomberg / Getty Images)
Hurricanes can cause problems for U.S. petroleum supplies in the mid-Atlantic region. The biggest refinery on the East Coast, Bayway in New Jersey, operated by Phillips 66, was impacted by Hurricane Sandy in 2012.
In Florida, hurricanes can disrupt supply chains for petroleum products. Although petroleum fuels are not refined in the Sunshine State, the state has significant gasoline demand, the EIA said. During major hurricanes, changes in consumer behavior can lead to temporary spikes in fuel demand, affecting prices due to local supply shortages or panic-buying.
Last year’s Atlantic hurricane season had 20 named storms, but only one made landfall in the U.S. None of last year’s storms had a significant impact on U.S. petroleum infrastructure, the EIA said.
Meteorologist Ian Oliver takes us to the National Hurricane Center and gives us a sneak peak at a couple changes to the forecasts.
Can hurricanes impact the natural gas market?
A hurricane in the GOM could potentially decrease natural gas production, the EIA said. However, recent hurricanes have had a limited effect on the overall U.S. natural gas supply due to the continual decline in GOM gas production.
“The GOM provided less than 2% of total U.S. marketed natural gas production in 2023, down from 17% in 2005 when Hurricanes Katrina and Rita interrupted significant volumes of natural gas production,” the EIA said.
Storm clouds above the Sabine Pass LNG Export Terminal after Hurricane Laura made landfall in Port Arthur, Texas, U.S., on Friday, Aug. 28, 2020.
(Luke Sharrett/Bloomberg / Getty Images)
Hurricanes can also disrupt U.S. natural gas demand by affecting liquefied natural gas (LNG) export operations from the Gulf Coast, which has almost 13 billion cubic feet per day of export capacity.
“Although LNG facilities generally have many layers of protection from direct impact, hurricanes can damage electrical and marine infrastructure and hamper ship movement,” the agency adds.
Most recently, the effects of Hurricane Laura, which made landfall in August 2020, temporarily halted LNG exports from Louisiana’s Sabine Pass and Cameron LNG facilities.