Experts say Irma doesn’t pose as serious a threat to the U. S. fuel supply, but the federal government and industry will be challenged to meet demand once the recovery begins.
The approach of Hurricane Harvey last month was enough to send gas prices higher, as the Category 4 storm threatened infrastructure that refines roughly 25 percent of the U. S. gasoline supply. Those facilities went offline or greatly reduced their output while Harvey inundated south Texas with historic rainfall, and gas prices have remained inflated while the refineries have resumed full production.
Can motorists expect another bump as Hurricane Irma closes in on Florida?
Experts say the far stronger storm doesn’t pose as serious a threat to the U. S. fuel supply, but the federal government and the energy sector will be challenged to meet demand once recovery begins.
«The federal government and industry is going to move heaven and earth to make sure this supply disruption is as short as possible, » said Bob McNally, a fellow with Columbia University’s Center on Global Energy Policy and a former energy adviser to George W. Bush. He took part in an American Petroleum Institute teleconference on Irma on Friday morning (Sept. 8) .
The price of wholesale gasoline on the futures market was below pre-Harvey levels this week — down to $1.66 a gallon. Typically, the pump price follows suit unless demand drives it higher. That pressure has persisted as Texas refineries have gradually been put back online and three more hurricanes have developed in the past several days.
One proactive measure the Trump administration was being asked to take ahead of Irma’s impact was issuing a waiver of the Jones Act, a federal law that requires American-flagged vessels to transport cargo between domestic ports. Allowing foreign vessels to move fuel barges to Florida, which doesn’t have an extensive pipeline network comparable to other states, would help alleviate the state’s supply concerns, McNally said.
U. S. Customs and Border Patrol, which handles Jones Act compliance, received but did not grant a similar request for Hurricane Harvey.
Flooding and its effect on the capacity to refine oil has been the bigger issue from Harvey — not the ability to ship fuel. As of Thursday, remaining shutdowns at Texas facilities account for a 7.5 percent reduction in U. S. refinery capacity, according to the federal Energy Information Administration. Five of the six refineries that are still offline were in the process of resuming production, and at least six refineries were operating at reduced rates.
The Colonial Pipeline, which supplies gas to the eastern U. S., was another casualty of Harvey’s flooding. As of Thursday, much of its flow had been restored, including a feeder line to Georgia that supplies northern Florida and the trucks that transport fuel by highway.
«The big picture is that there will be plenty of gasoline, » said Guy Caruso, a senior energy adviser with the Center for Strategic and International Studies, during the API teleconference. But over the short term in Florida, there may be issues with meeting demand depending on the extent of storm damage.
«At some point, it’s up to the behavior of the motorist, » McNally added, referring reports of gasoline hoarding in Florida ahead of Irma’s arrival.
