Less Supply = Higher Gas PricesThe real story with hurricanes is their human and environmental costs. I certainly don't want to downplay that here, and I hope that everybody stays safe. But this post is about how hurricane Isaac is affecting oil production in the Gulf of Mexico, something that we should probably get used to as climate change makes hurricanes stronger.
The first thing to note is that according to the Bureau of Safety and Environmental Enforcement (BSEE), as of yesterday (the most recent data available), Isaac had caused 503 oil & gas platforms to be evacuated, as well as 49 rigs. This represents respectively 84.4% and 64.5% of all platforms and rigs in the Gulf of Mexico. All of these add up to a drop in supply of 1.29 million barrels of oil per day and 3,001 million cubic feet of natural gas, respectively 93.28% and 66.7% of the Gulf's production. In other words, the Gulf is pretty much shut down, and this drop in supply is bound to have a pretty significant impact on fuel prices, especially when combined with other factors such as the fires at a refinery in Venezuela...
The impact might not last for too long though as apparently oil platforms were not too damaged this time, according to Reuters: "Brent crude oil slipped towards $112 on Wednesday as Hurricane Isaac left U.S. Gulf Coast oil production largely untouched and as government figures showed an unexpected rise in U.S. crude inventories." But sometimes the extend of the destruction is only visible after crews go back. We'll have to wait and see to be sure.
The map below, which was assembled by our friends at the excellent Oil Drum, shows the position of the rigs and the path of the hurricane:
One interesting modern twist on hurricane readiness is the use of Twitter to communicate. NOLA writes: "Know where to buy ice, gas and water? Tweet #nolaice, #nolagas, #nolawater". It probably won't replace cheap emergency radios, but now that tons of people have smartphones, it certainly makes sense.
For more on the human side of the impact of the hurricane, NOLA has a lot of coverage.
Here's the latest map from NOAA:
My bottom line is, I hope everybody is safe. That's what really matters, not oil production, even if these hurricanes are always a good time to reflect on the vulnerability of our fossil fuel infrastructure (as the BP oil spill in the Gulf proved).
Our colleagues at Discovery News have a nice piece about New Orleans and how prepared they are for hurricanes.