Hurricanes

Strategic Petroleum Reserve (SPR) inventories have been climbing over the past year as the Department of Energy (DOE) advances plans to replenish it following the record 180-MMbbl drawdown after Russia’s invasion of Ukraine in 2022. But DOE officials have said its refilling efforts are complicated by upgrades at three of the four SPR storage sites. In today’s RBN blog, we look at the scope of these “life-extension” projects, the completion timetable, and how it might drag out restocking efforts. 

As the Atlantic hurricane season churns out storms that regularly threaten the U.S. Gulf Coast, it can be easy to forget that the East Coast — an important refining center and refined-products market — is not immune from their impact. A dozen years ago this month, Superstorm Sandy roared ashore in New Jersey, wreaking havoc with storm surges and fierce winds that stretched for 1,000 miles. While the East Coast lacks the Gulf Coast’s concentration of energy infrastructure, it is home to the critical New York Harbor (NYH) market. In today’s RBN blog, we will examine how storms have affected the refining sector on the East Coast. 

The Gulf of Mexico (GOM) may account for less than one-fifth of U.S. oil production but it’s a region that’s more than holding its own. Drillers plan to expand production, using advanced technologies to tap untouched reserves in deeper waters. Still, Gulf Coast output has always been at risk from severe storms, just like the onshore outlets and infrastructure on which producers depend. In today’s RBN blog, we’ll discuss highlights from our new Drill Down Report on the developments in the Gulf. 

Crude oil production in U.S. shale and tight-oil plays still hasn’t recovered fully from the demand destruction wrought by COVID-19 in the last year or so. It could be argued, though, that producers in the offshore Gulf of Mexico (GOM) have faced even tougher times as they had to deal with not only pandemic-related staffing issues and project setbacks but the most active hurricane season on record. Offshore GOM production averaged only 1.65 MMb/d in 2020, a 13% decline from the previous year and the lowest since 2016. By August, production fell to less than 1.2 MMb/d, the lowest for that month in seven years. Many new projects were delayed as well, but things may finally be looking up, with first oil from a number of projects coming later this year or in early 2022 and final investment decisions (FIDs) on two major projects expected soon. Today, we discuss the wild ride that GOM producers experienced in 2020 and whether better days can be expected in the future.

Last week, Hurricane Delta became the latest of a string of hurricanes and tropical storms that have assaulted the Gulf Coast this year and disrupted energy production in the Gulf of Mexico — and energy exports. A number of major storms made direct hits or glancing blows to crude export centers like Corpus Christi, Houston, Beaumont, and Louisiana, forcing marine terminals to either slow down their carrier-loading operations or shut down for a few days at a time. That led to a yo-yoing of weekly export volumes: way down one week, way up the next. Despite the short-term dislocations, however, total export volumes since the hurricane season started on June 1 are actually up slightly from the first five months of 2020, a testament to the resilience not only of the export market but to the marine terminals themselves. Today, we discuss how hurricanes and tropical storms have been affecting export-terminal activity.

Natural gas production in the Gulf of Mexico (GOM) has been falling for 15 years, hurt first by hurricane-related rig damage, then more recently by the side effects of the BP/Macondo disaster, the on-shore sale boom, and the resulting sag in gas prices. But GOM gas production is about to uptick, due largely to two big, long-planned oil and gas projects finally coming online. Is the upcoming increase in gas production in the Gulf the first sign of resurgence, or is it the energy-sector equivalent of a “dead cat bounce.” In this blog, we consider what is ahead for gas production in the GOM.