Energy sector recovery slow post-Harvey

It could take several weeks for some refineries to return to full service after the storm, the latest federal report finds.
By Daniel J. Graeber  |  Sept. 6, 2017 at 5:50 AM
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Sept. 6 (UPI) -- While flood waters are receding in parts of the U.S. south hit by Hurricane Harvey, it could take weeks for the energy sector to recover, assessments note.

The National Weather Service reported that parts of the Houston area should expect a slight chance of showers for Wednesday, but weather will be clear for the remainder of the week. Tropical Storm Katia is moving inland from the east coast of Mexico, while Hurricane Irma, a Category 5 storm, is bearing down on Puerto Rico.

Harvey made landfall Aug. 25 as a Category 4 hurricane and lingered over parts of Texas and Louisiana for the better part of a week. The region is central to the U.S. energy sector, with a large concentration of refineries, shale oil operations and offshore platforms. Harvey was the strongest hurricane to hit Texas in more than 50 years and about 50,000 households are still without power.

In its latest incident report, the U.S. Energy Department said six refineries were still shut down, an improvement from the dozen or so closed at the peak of the storm.

"Five refineries are in the process of restarting after being shut down," the department's latest report read. "This process may take several days or weeks to start producing product, depending whether any damage is found during restart."

By the Monday after Harvey made landfall, about 2.2 million barrels per day of Texas refining capacity was shut in, representing about 12 percent of the total U.S. refining capacity. As of Tuesday afternoon, about 1.6 million bpd of refining capacity was still offline.

Motiva's refinery in Port Arthur, Texas, the largest refinery in the country, started the initial phase of the processes needed to restart the facility late Tuesday. The company said in a statement emailed to UPI the facility would start up at about 40 percent of its peak 603,000 bpd capacity by the weekend.

Nicole Leonard, a senior project consultant for commodity pricing group S&P Global Platts, said in an emailed statement the sector recovery process will be slow.

"Though many have begun the process of restarting their refineries, news of delays and even minimal damage suggests the loss of crude demand could continue through the week," she said. "Ports have reopened, as well, but news of a sunken dock in the Houston Ship Channel suggests risk to immediate resumption in oil and refined product flows"

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