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Multimedia Weekly Digest: Hurricane Season

By SA Multimedia :

Welcome to SA Multimedia Digest, where we combine videos and podcasts from across Seeking Alpha's contributor base into a single weekly article.

Hurricanes Harvey and Irma continue to wreak havoc in the US and Caribbean Islands. Our first thoughts are with all those affected by this devastation. As an investing site, our authors also discussed what these natural disasters mean for the economy and markets in general and the oil and gas sector in specific.

We begin with Chris Martenson , who interviewed geoscientist and oil explorer Jeffrey Brown on his podcast this week to talk about how hurricanes affect oil and gasoline production.

Hurricane Harvey took offline over 50% of Texas' refining capacity and shut down large percentage of the wells in the major Eagle Ford shale play.This week, Hurricane Irma threatens to deliver a similar massive punch to the oil patch in the Gulf.I suppose the analogs would be Rita and Katrina, especially Rita. I think there's more refinery damage. As a matter of fact, the same area - Beaumont and Port Arthur with Rita. Reportedly, they've actually tried to build more robust dikes, levees around the refineries for better flood control. This thing was such an enormous rain event that apparently it completely overwhelmed them. I don't recall how long it took them to come back after Rita, but that would probably be the best guide for how long it will take to come back after Harvey.And it's such an unusual storm because as you know the typical hurricane path is a linear, curving path. Basically, primarily a linear trend. It hits the coast, it's very concentrated in that area, and you've got flooding rains along the path going inland. This thing hit just north, northeast of Corpus, did heavy damage to small towns north of Corpus, and then moved slightly in. Stagnated, and then backed up into the gulf, and then drifted farther northeast. So this entire time period Houston is just getting this dirty side of the hurricane. Wave after wave after wave of rain. And then as it moved farther up the coast, and Beaumont/Port Arthur is getting the same thing that Houston got. But actually, I think Beaumont/Port Arthur had a more intense 24-hour rain period than Houston did.So, this bizarre storm basically shut in the entire gulf coast refining capacity from Corpus Christi to Beaumont to Port Arthur.And one thing that kind of frankly shocked me is I would have expected the governor to ask people to curtail nonessential driving in order to maintain the void reducing the gasoline inventory we've got.I guess they don't want to have a negative impact on business, but this really is a state crisis situation. I mean, certainly state crisis, certainly the damage and the flooding and the impact, incredible impact. It's definitely a short-term gasoline supply problem....a huge question is going to be to what degree those wells come back. And these very tight, low permit build reservoirs, they're kind of notorious for suffering long-term productivity declines once they're shut in for a lengthy period of time.

Russell Investments looked at how Harvey may affect the US economy.

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Please share your thoughts in our comments section. Have multimedia for us to include in the Digest? Please message us or email multimedia@seekingalpha.com .

See also Why Shorting Seadrill May Not Be A Good Idea on seekingalpha.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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