As the energy industry continues to suffer from the blow dealt by the coronavirus pandemic, it looks like things may get worse before they get better.
The one-two punch of Tropical Storms Marco and Laura headed toward the Gulf Coast is complicating things for an industry that’s seen significant losses since the beginning of the year. Even though the storm is already weakening, Marco could shake things up for Texas’ energy sector. That storm is expected to head westward along the coastline toward Texas after initially making landfall over Louisiana.
“We’re seeing the production side of things impacted already,” said Matt Smith, director of commodity research for ClipperData. “But there’s also signs of gasoline demand spiking in Louisiana ahead of the storm – some are panic-buying and some are preparing to leave the area to get out of the storm’s path.”
Smith spoke to Texas Standard on Monday.
Companies have evacuated workers and shut down offshore drilling platforms in the Gulf of Mexico. Smith said the shutdown amounts to about 58% of offshore production offline during the storm. And depending on the movement of both storms, other operations could shut down as well.
“Should we see Marco peeling west along the cost, and should Laura strengthen and head toward Texas, then we could see refineries being shut in,” Smith said. “We’ve heard rumors of Motiva at Port Arthur – that’s the largest refinery in the US … there’s talk of that being shut in ahead of these storms coming through. Should we see Laura edge a little bit west instead of hitting that [Texas-Louisiana] border, we could see those refineries impacted.”