Citing lessons from Hurricane Harvey's assault on the Gulf Coast in 2017, U.S. oil and gas industry representatives praised the sector's "reliability and resilience" heading into hurricane season, despite some constraints on communication with state and federal agencies.
Hurricane Harvey in particular affected many refineries along the Texas coast, as well as Eagle Ford Shale and Permian Basin drillers, which had to temporarily cut back production. Still, most companies adhered to their 2017 production guidance and did not change production targets as a result of the storm.
Rebecca Massello, the Interstate Natural Gas Association of America's director of security, reliability and resilience, noted during an industry conference call that the natural gas pipeline industry "saw few outages and minimal impacts on nationwide gas prices" during the 2017 season. That storm season also included hurricanes Irma and Maria, which devastated Puerto Rico and had significant impacts in Florida.
Midstream operators such as Kinder Morgan Inc. and Magellan Midstream Partners LP faced outages on Gulf Coast-area pipelines, including parts of Colonial Pipeline Co.'s system. The financial impact reported during third-quarter earnings season, however, was minimal.
While the trade associations affirmed that the flow of information between the industry and governmental agencies has improved significantly over the past few years, the American Petroleum Institute's Suzanne Lemieux said information sharing remains somewhat restricted. "We do have to respect both the state and federal antitrust rules that are in place throughout the industry as far as pricing, supplies, availability ... so there are formalized processes, but there are also restrictions," said Lemieux, the group's midstream and industry operations manager.
The National Ocean Industries Association advocated expanding offshore drilling beyond the Gulf Coast to mitigate production outages from future storms. "We dodged an energy security bullet in the 2017 season," said Tim Charters, senior director of governmental and political affairs. "By geographically concentrating our nation's offshore energy production, the U.S. is rolling the dice each year when it comes to natural disasters."
The U.S. Department of the Interior recently finished a comment period on its first draft of a new leasing program that would open the Atlantic and Pacific coasts to offshore drilling. It is expected to release a revised plan by the end of the year, but most East Coast states are looking to ban drilling in waters they control.
One aspect of planning that the industry hopes to improve during the 2018 season is trucking. Petroleum Marketers Association of America Vice President Sherri Stone said weigh-station delays in pass-through states slowed down the transportation of supplies. "That's something that was really holding people up," she emphasized. "Hopefully that will run much more smoothly in the future."
Hurricane season as designated by federal forecasters runs from June 1 to Nov. 30.
