Worst Hurricane Season In A Decade Threatens Gulf Coast Production

Authored by Nick Cunningham via OilPrice.com,

2017 could be an “above-normal” year for large hurricanes, according to the National Oceanic and Atmospheric Administration (NOAA), a potential problem for Gulf Coast oil drillers and refiners.

NOAA puts the odds of an “above-normal” season for hurricanes at 45 percent, while the chances of a normal and below-normal season are at 35 and 20 percent, respectively. In fact, they said that there is a 70 percent likelihood of 11 to 17 named storms, which are storms that have 39 mile-per-hour winds or higher. About 5 to 9 of those could become hurricanes (winds of 74 mph or higher); 2 to 4 of which could become major hurricanes (winds of 111 mph or higher). The average season (which runs from June through November) tends to have just 12 named storms, so the potential for 17 named storms puts the 2017 hurricane season in more treacherous territory.

"We're expecting a lot of storms this season," Gerry Bell, lead seasonal hurricane forecaster with NOAA’s Climate Prediction Center, told reporters. "Whether it's above normal or near normal, that's a lot of hurricanes."

Part of the reason for the expected uptick in hurricane activity is because the El Nino phenomenon is not expected to show up. El Ninos tend to suppress hurricanes. Also, sea-surface temperatures are above-average, which contributes to stronger storms.

There has been a decade-long lull in major hurricanes that have struck the U.S., but there is a growing probability that that changes this year.

That should be cause for concern for the oil and gas industry, much of which is located along the Gulf Coast. They have been spared the worst that Mother Nature has to offer for quite some time.

In 2005, Hurricanes Katrina and Rita, which struck the Gulf Coast within a couple of weeks of each other, destroyed 115 oil platforms and damaged 52 others, leading to the “near total shut-down of the Gulf’s offshore oil and gas production,” according to the Bureau of Safety and Environmental Enforcement. While the effects were mostly temporary, nine months later as much as 22 percent of oil production and 13 percent of gas production in federal waters remained offline.

WTI oil prices jumped more than 20 percent within a few weeks because of the outages, from $57 in mid-July to $69 per barrel on September 1, several days after the storm made landfall.

The industry is much better prepared these days than it was then, with improved standards on new rigs and much better processes for evacuation and subsequent return to production. Today’s rigs can withstand higher waves and stronger winds. They also can position themselves using GPS rather than being moored to the seafloor. Storm prediction is also vastly improved. As such, even a major hurricane on the scale of Katrina is unlikely to be as damaging as it was in 2005.

Still, outages can still occur, taking crude oil production and refining offline. The averaged named storm can slash output in the Gulf by an average of 169,000 bpd month-on-month, according to BTU Analytics. Much of that tends to come back online quickly, but that isn’t guaranteed. “It takes more than a flip of a switch to get a refinery back up and running,” the American Petroleum Institute says, and pipelines cannot operate if they do not have power.

Moreover, there have been few test cases since the disaster of 2005. In 2008, an estimated 60 oil and gas platforms were destroyed from Hurricanes Ike and Gustav. A slow-moving Hurricane Isaac in 2012 destroyed some onshore storage facilities. Other than that, there have only been relatively manageable storms. The outcome from a Category 5 storm is uncertain.

But one other factor working in the industry’s favor is that there just aren’t as many rigs deployed in the Gulf as there was ten years ago. The U.S. offshore rig count stands at 23 as of mid-May, down from over 100 back in 2005-2007.

(Click to enlarge)

Given the state of the oil market today, even a major hurricane might not be enough to really move the needle all that much on oil prices. Inventories are still sky-high, and many analysts are expecting only modest increases in prices this year, with questions still lingering about a possible glut in 2018. However, the warning from NOAA that hurricane season could be much more active this year bears watching.


ebworthen TruxtonSpangler Mon, 06/05/2017 - 21:10 Permalink

Yup.  They are fluffing the forecast to "prove" the Global Warming/Climate Change canard."Science" has become a religion for the Godless of the left; as they conveniently ignore man-made pollution.We don't have any control over the main source of non-sub-freezing temperatures on Earth, the Sun, you know, that big glowing ball of fire we see every day?Never you mind that more CO2 helps out the plants that produce oxygen, never mind the huge methane bubbles that percolate up from the seabeds of the World's oceans (happens all the time, not just "ancient" events).http://www.cbc.ca/news/technology/methane-craters-arctic-seafloor-scien… you mind the millions of buffalo that roamed the Great Plains, methane producing bovines just like Cows.Oh no!  It is the omniscience of Humanity that controls the temp.'s, not the Sun nor the Galaxy!The sky is falling!  The sky is falling!

In reply to by TruxtonSpangler

espirit nmewn Mon, 06/05/2017 - 19:50 Permalink

 Hi Boss. Since Gulf oil production is down and the trucks aren’t running because of the storm, I’m calling in to let you know I won’t be back to work until the ripmart down the street gets their fuel resupplied, since I’m outa gas. Unless you want to pick me up. See how that works?   

In reply to by nmewn

nmewn Budnacho Mon, 06/05/2017 - 19:19 Permalink

All last week they were predicting biblical flooding for the Florida panhandle this last weekend, I mean, really wrath of God type stuff...but...nuthin...a few spits and some thunder.But they have this whole manmade globull warming dealy-bop down to an absolute "science"...lol...I'm gonna go out on a limb here and state when they say prepare for a fantastic sun filled weekend with no rain THATS WHEN the skies will open up and I can get some use out of the ark I built ;-) 

In reply to by Budnacho

Grandad Grumps Mon, 06/05/2017 - 19:08 Permalink

ZH needs to hire better talent.

"2017 could be an “above-normal” year for large hurricanes"


techpriest ipso_facto Mon, 06/05/2017 - 19:14 Permalink

Would it increase or decrease their funding to be accurate?

Either way, have your plywood and someplace to park the grill inside, along with your 3-6 month emergency fund. A tiny house on wheels or a cottage to take an unexpected "vacation" to probably wouldn't hurt either. You never know when you'll need to bug out, even in a "normal" season.

In reply to by ipso_facto

Sofa King Mon, 06/05/2017 - 19:14 Permalink

Offshore production is in the toilet. Was down in Fourchon last week and you can feel the despair from all the rig support companies. Them coon-asses are suffering. The only real work left is capping wells.

So fuck the hurricane season.

krispkritter Mon, 06/05/2017 - 19:16 Permalink

I'm built into a walkout basement structure in an area of Florida that is known for more than a century to have  no hurricane impacts.  Tornados, less than one in human memory. At 200'+ above sea level, Al Gore and the rest of these climate/weather alarmists can suck my dick. If I need a boat to go on vacation, I'm pretty sure they'll be cheap here or just floating around.

booboo Mon, 06/05/2017 - 19:19 Permalink

Better go out and buy another generator, I have 20 so far and never used one of them, cant find the start buttons but they all have a retractable rope thingy, i guess to pull them around with. s/

adr Mon, 06/05/2017 - 19:20 Permalink

Another "surprise oil prices are going higher" article from Oilscam.com.Come on guys, at least have ine article supporting lower oil prices. Come on, you can do it. Guess it's easier to try and goose algos higher for making cash on the oil contracts you bought. For the past decade we have had below average hurricane seasons just like the post 1950s period that followed the years of massive storms. Hurricanes follow the solar cycle. Until the sun wakes up, we won't get massive storms like Katrina. Or are we to believe carbon dioxide causes changes to the weather more than the giant ball of gas in the center of the solar system. Another thing, when oil was $57 in 2005 we weren't paying $2.45 at the pump. 

youngman Mon, 06/05/2017 - 19:21 Permalink

OPEC should love this report..........but this is the storms centers 15 minutes of fame this year......they get in the news cycle with this....every year...keeps them funded I guess

Ms No Mon, 06/05/2017 - 19:25 Permalink

I'll bet you a drink it wont be.  We are going into deep solar minimum.  When we had years with tons of sunspots we had the long string of strong hurricanes.  Now they are dissipating.  Of course if we have one storm they will act like a nuclear bomb went off and will turn one dead dog and a flooded gas station into a biblical flood and 800 fatalities.  Look at what has been going on with the sun.  2013 and 2012 flagged a major minimum and NASA even admitted that before they stopped talking about this minimum much at all.  It should peak around 2019-2020 but the next cycle might magnify it:Spotless DaysCurrent Stretch: 0 days 2017 total: 38 days (24%) 2016 total: 32 days (9%) 2015 total: 0 days (0%) 2014 total: 1 day (<1%) 2013 total: 0 days (0%) 2012 total: 0 days (0%) 2011 total: 2 days (<1%) 2010 total: 51 days (14%) 2009 total: 260 days (71%) Updated 05 Jun 2017 http://www.spaceweather.com/  

Ms No Squid Viscous Mon, 06/05/2017 - 22:56 Permalink

Oh, it correlates to Maunder minimum (it looks like it wont be quite that bad for a couple reasons) and other cooling events, and there is debate on if you have constant hurricanes when you have less energy added to the system.  You should but the problem is that our fields are weak and CMEs may be worse in that situation which may causes some added energy for awhile and they wont admit any of this. What you do get is increased cloud seeding and lighting caused by increased cosmic radiation.  Cosmic radiation increases when sunspots draw down.  It also correlates if you look at charts at our very hot series of Maximums that had high numbers of sunspots when we had high hurricanes.  Then as things declined so did the hurricanes.  Although they lie about this.  They lie that the sun affects our weather.  They have been ignoring the solar minimum topic since the post I have below.  They claim that we didn't have a highly active sun during the hot years, which is also a blatant lie.  So if you are talking about that correlation, that is hard to prove and originates from just a few scientists touting contrary opinions.  So, I will just have to bet a drink.It wasn't just 2009 with the sunspots either it was 2008 also. "...2008 was a bear. There were no sunspots observed 266 days of the year's 366 days (73%).  To find a year with more blank suns you have to go all the way back to 1913 [the year of Satan lol] which had 311 spotless days.  Sunspot count for 2009 has dropped even lower... [maunder-ish]  It adds up to on unescapable conclusion 'that we are experiencing a very deep solar minimum'...[Peaks 2019-2020 but then we likely go into a weaker one]  https://science.nasa.gov/science-news/science-at-nasa/2009/01apr_deepsolarminimum/http://solen.info/solar/images/comparison_recent_cycles.pngAnd the magnetic field is weakening. This likely has also changed our storm issues. http://news.spaceweather.com/earths-magnetic-field-is-changing/ 

In reply to by Squid Viscous

TxExPat Ms No Tue, 06/06/2017 - 08:14 Permalink

The Maunder minimum "Little Ice Age" weather was notorious for storms/wet weather.  Thing to keep in mind with major storms (like Hurricanes) is that they are natures heat transfer mechanisms.  The absolute temperatures are not nearly as important as the difference in temperatures.  In the last solar minimum the poles cooled faster than the tropics.  The differential between the two increased, which drove large storm systems across the globe.  (all those ship wrecks in the 1600-1800 range were not entirely driven by lack of communication about storms, evidence suggests there were more storms as well).  European (and later North American) farmers experienced cold wet summers, lots of storms, with late/early frosts/snow.  The rest of the world is not nearly as well documented, but it does appear to have been a global pattern.  Nature usually moves slow, trend on solar minimums suggest this one will take a few hundred years to play out.   

In reply to by Ms No

40MikeMike Mon, 06/05/2017 - 19:25 Permalink

Everry lib in America suddenly found the god they hate and started praying fervently for the worst hurricane season in history. They are not afraid to wish catastrophe on millions if only it proves global frauding at least partially true...even once.  Get on your knees and pray that millions are made miserable so your phony C02 idiocy might get some respect.  

metafaux Mon, 06/05/2017 - 19:44 Permalink

Really? Above-average? It's almost like weather is cyclical or something and we're heading into a peak season after a decade off. Better blame it all on c02.