Why Houston Flooding Isn’t a Sign of Climate Change
In this newsletter:
1) Why Houston Flooding Isn’t a Sign of Climate Change
Roy W Spencer 28 August 2017
2) Hurricane Harvey Ends 12-Year U.S. Hurricane Drought
CNS News, 26 August 2017
3) Judith Curry: Hurricane Harvey In Context
Climate Etc., 27 August 2017
4) Partying In Paris Instead Of Preparing In Houston
Ron Clutz, Science Matters, 27 August 2017
5) Why Isn't Harvey Having More Impact On Energy Prices? Shale
Bloomberg, 28 August 2017
6) Harvey’s Widespread Destruction Tests U.S. Shale
The Wall Street Journal, 29 August 2017
Roy W Spencer 28 August 2017
2) Hurricane Harvey Ends 12-Year U.S. Hurricane Drought
CNS News, 26 August 2017
3) Judith Curry: Hurricane Harvey In Context
Climate Etc., 27 August 2017
4) Partying In Paris Instead Of Preparing In Houston
Ron Clutz, Science Matters, 27 August 2017
5) Why Isn't Harvey Having More Impact On Energy Prices? Shale
Bloomberg, 28 August 2017
6) Harvey’s Widespread Destruction Tests U.S. Shale
The Wall Street Journal, 29 August 2017
Full details:
1) Why Houston Flooding Isn’t a Sign of Climate Change
Roy W Spencer 28 August 2017
In the context of climate change, is what we are seeing in Houston a new level of disaster which is becoming more common?
The flood disaster unfolding in Houston is certainly very unusual. But so are other natural weather disasters, which have always occurred and always will occur. (By the way, making naturally-occurring severe weather seem unnatural is a favorite tactic of Al Gore, whose new movie & book An Inconvenient Sequel [ currently #21,168 in Kindle] is dismantled in my new e-book, An Inconvenient Deception [currently #399]).
Floods aren’t just due to weather
Major floods are difficult to compare throughout history because the ways in which we alter the landscape. For example, as cities like Houston expand over the years, soil is covered up by roads, parking lots, and buildings, with water rapidly draining off rather than soaking into the soil. The population of Houston is now ten times what it was in the 1920s. The Houston metroplex area has expanded greatly and the water drainage is basically in the direction of downtown Houston.
There have been many flood disasters in the Houston area, even dating to the mid-1800s when the population was very low. In December of 1935 a massive flood occurred in the downtown area as the water level height measured at Buffalo Bayou in Houston topped out at 54.4 feet.
Downtown Houston flood of 1935.
By way of comparison, as of 6:30 a.m. this (Monday) morning, the water level in the same location is at 38 feet, which is still 16 feet lower than in 1935. I’m sure that will continue to rise.
Are the rainfall totals unprecedented?
Even that question is difficult to answer. The exact same tropical system moving at, say, 15 mph might have produced the same total amount of rain, but it would have been spread over a wide area, maybe many states, with no flooding disaster. This is usually what happens with landfalling hurricanes.
Instead, Harvey stalled after it came ashore and so all of the rain has been concentrated in a relatively small portion of Texas around the Houston area. In both cases, the atmosphere produced the same amount of rain, but where the rain lands is very different. People like those in the Houston area don’t want all of the rain to land on them.
There is no aspect of global warming theory that says rain systems are going to be moving slower, as we are seeing in Texas. This is just the luck of the draw. Sometimes weather systems stall, and that sucks if you are caught under one. The same is true of high pressure areas; when they stall, a drought results.
Even with the system stalling, the greatest multi-day rainfall total as of 9 a.m. this Monday morning is 39.7 inches, with many locations recording over 20 inches. We should recall that Tropical Storm Claudette in 1979 (a much smaller and weaker system than Harvey) produced a 43 inch rainfall total in only 24 hours in Houston.
Was Harvey unprecedented in intensity?
In this case, we didn’t have just a tropical storm like Claudette, but a major hurricane, which covered a much larger area with heavy rain. Roger Pielke Jr. has pointed out that the U.S. has had only four Category 4 (or stronger) hurricane strikes since 1970, but in about the same number of years preceding 1970 there were 14 strikes. So we can’t say that we are experiencing more intense hurricanes in recent decades.
Going back even earlier, a Category 4 hurricane struck Galveston in 1900, killing between 6,000 and 12,000 people. That was the greatest natural disaster in U.S. history.
And don’t forget, we just went through an unprecedented length of time – almost 12 years – without a major hurricane (Cat 3 or stronger) making landfall in the U.S.
So what makes this event unprecedented?
The National Weather Service has termed the event unfolding in the Houston area as unprecedented. I’m not sure why. I suspect in terms of damage and number of people affected, that will be the case. But the primary reason won’t be because this was an unprecedented meteorological event.
If we are talking about the 100 years or so that we have rainfall records, then it might be that southeast Texas hasn’t seen this much total rain fall over a fairly wide area. At this point it doesn’t look like any rain gage locations will break the record for total 24 hour rainfall in Texas, or possibly even for storm total rainfall, but to have so large an area having over 20 inches is very unusual.
They will break records for their individual gage locations, but that’s the kind of record that is routinely broken somewhere anyway, like record high and low temperatures.
Full post
2) Hurricane Harvey Ends 12-Year U.S. Hurricane Drought
CNS News, 26 August 2017
Hurricane Harvey roared ashore near Corpus Christie as Category 4 storm late Friday night, breaking a record 4,323-day (142-month, 12-year) major hurricane drought.
“The world is presently in an era of unusually low weather disasters. This holds for the weather phenomena that have historically caused the most damage: tropical cyclones, floods, tornadoes and drought.” Roger Pielke Jr 2017
Harvey made landfall around 30 miles north of Corpus Christie with maximum sustained winds of 130 miles per hour. The National Oceanic and Atmospheric Administration defines a major storm as Category 3 or higher (winds above 111 miles an hour).
The last major hurricane to make landfall in the continental United States was Wilma, which struck Florida as a Category 3 on Oct. 24, 2005, 4,323 days ago. The last Category 4 storm to make landfall in the United States was Charley (Florida) in August 2004. And the last Category 4 hurricane to devastate Texas was Carla in 1961, according to data compiled by NOAA.
Since 2005, only nine relatively minor hurricanes (Categories 1 or 2 – and yes, they can be damaging) have made direct landfall in the United States.
That does not include the devastating superstorm Sandy, which approached New Jersey as a Category 1 hurricane, but transitioned into a “post-tropical cyclone” just before making landfall near Atlantic City, N.J. in October 2012, according to the National Weather Service.
Prior to the recent 142-month hurricane drought, the longest period on record without a major hurricane making landfall in the continental United States was the 96 months between September 1860 and August 1869.
There had been major hurricanes, Category 3 or higher, in every decade since 1851, except for the present decade. Until now.
And going back to President Calvin Coolidge in 1923-1929, every U.S. president except Barack Obama has had one or more major hurricanes strike the continental U.S. during his term in office.
Full story
3) Judith Curry: Hurricane Harvey In Context
Climate Etc., 27 August 2017
Anyone blaming Hurricane Harvey on global warming doesn’t have a leg to stand on.
The 12 year drought of major hurricane landfalls in the U.S. is over, with catastrophic impacts in Texas. Predictions of Hurricane Harvey illustrate the realization of extended- and long-range hurricane forecasts.
This blog post analyzes the forecasts of Hurricane Harvey made by my company Climate Forecast Applications Network (CFAN), and also by the National Hurricane Center. […..]
Harvey in context
I’m sure you won’t be surprised to hear people blaming Harvey on global warming. How unusual was Harvey? Well, it will definitely be in the record books for ending the 12 year drought of major hurricanes striking the U.S.
Phil Klotzbach has prepared this list off Cat 4-5 U.S. landfalling hurricanes:
This list reminds us how awful things were. Apart from the horrendous 2004/2005 years, we have been pretty lucky in recent decades.
Anyone blaming Harvey on global warming doesn’t have a leg to stand on.
Harvey will be in the record books for almost unbelievable amounts of rainfall (the final tally is not in yet; unfortunately it will still be raining in TX for several more days, with potential doubling of the amount that has already fallen). While there was a large amount of water vapor ingested into Harvey, the huge amounts of rain are associated with Harvey’s stalled movement, while still close enough to the Gulf to continue to suck in moisture.
Full post
4) Partying In Paris Instead Of Preparing In Houston
Ron Clutz, Science Matters, 27 August 2017
While elected officials blather about “zero-carbon” footprints, nothing is done to prepare for weather events that have happened before and can always happen again. International accords and conferences like the last one in Paris do nothing for a vulnerable place like Houston.
Consider this article A Texas newsroom predicted a disaster. Now it’s close to coming true published at Columbia Journalism Review. Excerpts below.
THE TEXAS TRIBUNE AND PROPUBLICA last year published a multi-part investigation looking at what would happen if Houston was hit by a major hurricane.
The reporters partnered with scientists at several universities in Texas to conduct simulations, gaming out various storm scenarios for the country’s fourth-largest city, with its rapidly growing population, huge stores of oil and natural gas, and a major NASA facility.
The conclusion: The city and region were woefully unprepared for a major hurricane, with inadequate infrastructure for evacuation and flood control. A major storm would inflict catastrophic damage, bringing “economic and ecological disaster.” The series won awards, including a Peabody and an Edward R. Murrow, but it didn’t lead to substantive policy changes or big new investments in infrastructure.
Houston is the fourth-largest city in the country. It’s home to the nation’s largest refining and petrochemical complex, where billions of gallons of oil and dangerous chemicals are stored. And it’s a sitting duck for the next big hurricane. Learn why Texas isn’t ready. March 3, 2016
A house is engulfed in flames as water and waves inundate homes on Galveston Island as Hurricane Ike approaches the coast Sept. 12, 2008.
Now the same journalists are watching nervously as Hurricane Harvey inches closer to the Texas shoreline. While landfall is expected between Corpus Christi and Houston, one of their worst-case scenarios could still come true.
“Unfortunately it might take a disaster,” Shaw adds, “before Texas wakes up and realizes we need to send some real money to protect one of the nation’s biggest ports, where we keep most of our oil and chemicals.” If Houston was directly hit by a storm of Harvey’s magnitude, Shaw says, the environmental damage would exceed the BP Deepwater Horizon oil spill.
After the series appeared, the reporters reached out to the state’s entire congressional delegation and both of its US senators, one of whom, Ted Cruz, ran for president. “So none of them can say nobody could anticipate the calamity a large storm could inflict upon their constituencies,” Klein wrote.
“Ike was supposed to be that wake-up call to do something about this,” Shaw says. “All I can hope for is that this will be another wake-up call, and Texas will ask for more action before the ‘big one.’”
Full post
5) Why Isn't Harvey Having More Impact On Energy Prices? Shale
Bloomberg, 28 August 2017
Liam Denning
The shocking images of Houston's freeways transformed into waterways by the deluge of Hurricane Harvey call to mind similar footage of the floods unleashed on the Gulf coast by Hurricanes Katrina and Rita 12 years ago.
Along with everyone else there, the energy industry tied so closely to this region was hit hard, both then and now. Yet, while the full extent of the latest damage is still to be determined as the disaster is ongoing, it may be that the hurricane seasons of 2005 and 2017 will come to be seen as bookends on a transformation in the U.S. energy business.
Even as they grapple with more existential problems (if they're in southern Texas or are worried about people who are), energy traders are also confronted with the fact that, by and large, the markets they deal in appear largely unperturbed.
Prices of gasoline and other refined products have jumped -- a logical outcome, given that about one-sixth of U.S. refining capacity has been shut down. Yet crude oil and natural gas prices were either flat or down on Monday morning.
This is in marked contrast to the situation 12 years ago. Natural gas illustrates the point. When Katrina and Rita hit the Gulf, natural gas prices spiked into double digits, versus today's price of just less than $3 per million BTU.
More striking, though, is the differing impacts on expectations, as expressed in the futures market then and now. Here is what happened in 2005:
The hurricanes of 2005 sent natural gas futures soaring, not just for the immediate aftermath but years out
And here's how things have moved this month. Spot the difference:
Hurricane Harvey's impact has barely registered in gas futures markets, especially further out on the curve
Indifferent
The key factor here is the shale boom. In its early stages, it got added impetus from surging natural-gas prices, due to both the commodity supercycle in the decade before 2014 and disaster-related spikes such as those in the summer and fall of 2005. You can see this in the dramatic shifts in where the U.S. gets its domestic natural gas supply:
Back To The Land
The shale boom accelerated in Texas and Louisiana after 2005, with Appalachia picking up the pace after 2009. Offshore production, meanwhile, has slumped
The shift away from the hurricane-prone waters of the Gulf of Mexico means even a catastrophic event like Harvey now has little impact on pricing. Indeed, even onshore production in Texas and Louisiana has declined as a share of domestic U.S. natural-gas production in recent years as the first wave of the shale boom has passed and growth has shifted elsewhere, particularly Appalachia.
If anything, Harvey is bearish for natural gas because of the disruption to local demand, which hasn't declined in importance over the past decade:
Demanding
While Texas and Louisiana, along with the offshore Gulf of Mexico, have declined as a share of U.S. natural gas production, their share of demand has stayed relatively constant
Full story
6) Harvey’s Widespread Destruction Tests U.S. Shale
The Wall Street Journal, 29 August 2017
The tropical storm is the biggest to hit the sector since shale drilling took off a decade ago; production may be slow to bounce back
An oil refinery is seen in Corpus Christi, Texas, on Saturday before the arrival of Hurricane Harvey. Several analysts say much of the region’s 1.4 million barrels a day of output is shut down. PHOTO: JOE RAEDLE/GETTY IMAGES
HOUSTON—Tropical Storm Harvey, the most powerful storm to hit Texas in half a century, has shut a significant portion of the state’s shale production, cutting off as much as 15% of U.S. oil supplies.
Now, in what is the first major storm to test U.S. shale, the big question is how quickly the sector can make a comeback.
Before Harvey made landfall as a hurricane Friday, many big shale producers in the Eagle Ford shale fields near Corpus Christi, Texas, shut down their oil and gas wells, and initial estimates for lost production were between 400,000 and 500,000 barrels a day.
As the hurricane’s widespread devastation has become clearer, several analysts say it is almost certain that much, if not most, of the region’s 1.4 million barrels a day of output is shut down.
Shale producers also rely on a vast, multibillion-dollar network of energy infrastructure—from ports to train tracks to pipelines—that has developed in recent years along the Texas coast. Many pieces of that network appear to be swamped too.
The need for that infrastructure may slow shale’s ability to bounce back. In the past, hurricanes have dealt a blow to the Texas energy industry by knocking out offshore oil platforms in the Gulf of Mexico; but in many cases, once storms passed, those big installations could quickly return to pumping crude.
“The effect to shale could linger given the extent and catastrophic level of forecasted flooding which interferes with shale logistics,” said Benny Wong, an analyst with Morgan Stanley.
The fracking-induced boom in Texas has heightened the state’s role in the U.S. economy, which means that if the oil fields and surrounding infrastructure are out of service for long, it could have outsize economic impacts on the state and shave $20 billion or more off U.S. gross domestic product, said Joe Brusuelas, chief economist with RSM US LLP, an accounting and consulting firm.
The Eagle Ford shale in South Texas produces 1.4 million barrels of oil a day, second in output in the state only to the Permian Basin of West Texas. There hasn’t been a storm of this magnitude since shale drilling took off about a decade ago.
Companies were trying Monday to sortie out and assess the damage to their facilities in the Eagle Ford shale, which took a direct hit from Harvey. But the sprawling nature of the storm—it was downgraded from hurricane status on Saturday—and continued rain in some areas hampered those efforts.
Full post
Roy W Spencer 28 August 2017
In the context of climate change, is what we are seeing in Houston a new level of disaster which is becoming more common?
The flood disaster unfolding in Houston is certainly very unusual. But so are other natural weather disasters, which have always occurred and always will occur. (By the way, making naturally-occurring severe weather seem unnatural is a favorite tactic of Al Gore, whose new movie & book An Inconvenient Sequel [ currently #21,168 in Kindle] is dismantled in my new e-book, An Inconvenient Deception [currently #399]).
Floods aren’t just due to weather
Major floods are difficult to compare throughout history because the ways in which we alter the landscape. For example, as cities like Houston expand over the years, soil is covered up by roads, parking lots, and buildings, with water rapidly draining off rather than soaking into the soil. The population of Houston is now ten times what it was in the 1920s. The Houston metroplex area has expanded greatly and the water drainage is basically in the direction of downtown Houston.
There have been many flood disasters in the Houston area, even dating to the mid-1800s when the population was very low. In December of 1935 a massive flood occurred in the downtown area as the water level height measured at Buffalo Bayou in Houston topped out at 54.4 feet.
Downtown Houston flood of 1935.
By way of comparison, as of 6:30 a.m. this (Monday) morning, the water level in the same location is at 38 feet, which is still 16 feet lower than in 1935. I’m sure that will continue to rise.
Are the rainfall totals unprecedented?
Even that question is difficult to answer. The exact same tropical system moving at, say, 15 mph might have produced the same total amount of rain, but it would have been spread over a wide area, maybe many states, with no flooding disaster. This is usually what happens with landfalling hurricanes.
Instead, Harvey stalled after it came ashore and so all of the rain has been concentrated in a relatively small portion of Texas around the Houston area. In both cases, the atmosphere produced the same amount of rain, but where the rain lands is very different. People like those in the Houston area don’t want all of the rain to land on them.
There is no aspect of global warming theory that says rain systems are going to be moving slower, as we are seeing in Texas. This is just the luck of the draw. Sometimes weather systems stall, and that sucks if you are caught under one. The same is true of high pressure areas; when they stall, a drought results.
Even with the system stalling, the greatest multi-day rainfall total as of 9 a.m. this Monday morning is 39.7 inches, with many locations recording over 20 inches. We should recall that Tropical Storm Claudette in 1979 (a much smaller and weaker system than Harvey) produced a 43 inch rainfall total in only 24 hours in Houston.
Was Harvey unprecedented in intensity?
In this case, we didn’t have just a tropical storm like Claudette, but a major hurricane, which covered a much larger area with heavy rain. Roger Pielke Jr. has pointed out that the U.S. has had only four Category 4 (or stronger) hurricane strikes since 1970, but in about the same number of years preceding 1970 there were 14 strikes. So we can’t say that we are experiencing more intense hurricanes in recent decades.
Going back even earlier, a Category 4 hurricane struck Galveston in 1900, killing between 6,000 and 12,000 people. That was the greatest natural disaster in U.S. history.
And don’t forget, we just went through an unprecedented length of time – almost 12 years – without a major hurricane (Cat 3 or stronger) making landfall in the U.S.
So what makes this event unprecedented?
The National Weather Service has termed the event unfolding in the Houston area as unprecedented. I’m not sure why. I suspect in terms of damage and number of people affected, that will be the case. But the primary reason won’t be because this was an unprecedented meteorological event.
If we are talking about the 100 years or so that we have rainfall records, then it might be that southeast Texas hasn’t seen this much total rain fall over a fairly wide area. At this point it doesn’t look like any rain gage locations will break the record for total 24 hour rainfall in Texas, or possibly even for storm total rainfall, but to have so large an area having over 20 inches is very unusual.
They will break records for their individual gage locations, but that’s the kind of record that is routinely broken somewhere anyway, like record high and low temperatures.
Full post
2) Hurricane Harvey Ends 12-Year U.S. Hurricane Drought
CNS News, 26 August 2017
Hurricane Harvey roared ashore near Corpus Christie as Category 4 storm late Friday night, breaking a record 4,323-day (142-month, 12-year) major hurricane drought.
“The world is presently in an era of unusually low weather disasters. This holds for the weather phenomena that have historically caused the most damage: tropical cyclones, floods, tornadoes and drought.” Roger Pielke Jr 2017
Harvey made landfall around 30 miles north of Corpus Christie with maximum sustained winds of 130 miles per hour. The National Oceanic and Atmospheric Administration defines a major storm as Category 3 or higher (winds above 111 miles an hour).
The last major hurricane to make landfall in the continental United States was Wilma, which struck Florida as a Category 3 on Oct. 24, 2005, 4,323 days ago. The last Category 4 storm to make landfall in the United States was Charley (Florida) in August 2004. And the last Category 4 hurricane to devastate Texas was Carla in 1961, according to data compiled by NOAA.
Since 2005, only nine relatively minor hurricanes (Categories 1 or 2 – and yes, they can be damaging) have made direct landfall in the United States.
That does not include the devastating superstorm Sandy, which approached New Jersey as a Category 1 hurricane, but transitioned into a “post-tropical cyclone” just before making landfall near Atlantic City, N.J. in October 2012, according to the National Weather Service.
Prior to the recent 142-month hurricane drought, the longest period on record without a major hurricane making landfall in the continental United States was the 96 months between September 1860 and August 1869.
There had been major hurricanes, Category 3 or higher, in every decade since 1851, except for the present decade. Until now.
And going back to President Calvin Coolidge in 1923-1929, every U.S. president except Barack Obama has had one or more major hurricanes strike the continental U.S. during his term in office.
Full story
3) Judith Curry: Hurricane Harvey In Context
Climate Etc., 27 August 2017
Anyone blaming Hurricane Harvey on global warming doesn’t have a leg to stand on.
The 12 year drought of major hurricane landfalls in the U.S. is over, with catastrophic impacts in Texas. Predictions of Hurricane Harvey illustrate the realization of extended- and long-range hurricane forecasts.
This blog post analyzes the forecasts of Hurricane Harvey made by my company Climate Forecast Applications Network (CFAN), and also by the National Hurricane Center. […..]
Harvey in context
I’m sure you won’t be surprised to hear people blaming Harvey on global warming. How unusual was Harvey? Well, it will definitely be in the record books for ending the 12 year drought of major hurricanes striking the U.S.
Phil Klotzbach has prepared this list off Cat 4-5 U.S. landfalling hurricanes:
This list reminds us how awful things were. Apart from the horrendous 2004/2005 years, we have been pretty lucky in recent decades.
Anyone blaming Harvey on global warming doesn’t have a leg to stand on.
Harvey will be in the record books for almost unbelievable amounts of rainfall (the final tally is not in yet; unfortunately it will still be raining in TX for several more days, with potential doubling of the amount that has already fallen). While there was a large amount of water vapor ingested into Harvey, the huge amounts of rain are associated with Harvey’s stalled movement, while still close enough to the Gulf to continue to suck in moisture.
Full post
4) Partying In Paris Instead Of Preparing In Houston
Ron Clutz, Science Matters, 27 August 2017
While elected officials blather about “zero-carbon” footprints, nothing is done to prepare for weather events that have happened before and can always happen again. International accords and conferences like the last one in Paris do nothing for a vulnerable place like Houston.
Consider this article A Texas newsroom predicted a disaster. Now it’s close to coming true published at Columbia Journalism Review. Excerpts below.
THE TEXAS TRIBUNE AND PROPUBLICA last year published a multi-part investigation looking at what would happen if Houston was hit by a major hurricane.
The reporters partnered with scientists at several universities in Texas to conduct simulations, gaming out various storm scenarios for the country’s fourth-largest city, with its rapidly growing population, huge stores of oil and natural gas, and a major NASA facility.
The conclusion: The city and region were woefully unprepared for a major hurricane, with inadequate infrastructure for evacuation and flood control. A major storm would inflict catastrophic damage, bringing “economic and ecological disaster.” The series won awards, including a Peabody and an Edward R. Murrow, but it didn’t lead to substantive policy changes or big new investments in infrastructure.
Houston is the fourth-largest city in the country. It’s home to the nation’s largest refining and petrochemical complex, where billions of gallons of oil and dangerous chemicals are stored. And it’s a sitting duck for the next big hurricane. Learn why Texas isn’t ready. March 3, 2016
A house is engulfed in flames as water and waves inundate homes on Galveston Island as Hurricane Ike approaches the coast Sept. 12, 2008.
Now the same journalists are watching nervously as Hurricane Harvey inches closer to the Texas shoreline. While landfall is expected between Corpus Christi and Houston, one of their worst-case scenarios could still come true.
“Unfortunately it might take a disaster,” Shaw adds, “before Texas wakes up and realizes we need to send some real money to protect one of the nation’s biggest ports, where we keep most of our oil and chemicals.” If Houston was directly hit by a storm of Harvey’s magnitude, Shaw says, the environmental damage would exceed the BP Deepwater Horizon oil spill.
After the series appeared, the reporters reached out to the state’s entire congressional delegation and both of its US senators, one of whom, Ted Cruz, ran for president. “So none of them can say nobody could anticipate the calamity a large storm could inflict upon their constituencies,” Klein wrote.
“Ike was supposed to be that wake-up call to do something about this,” Shaw says. “All I can hope for is that this will be another wake-up call, and Texas will ask for more action before the ‘big one.’”
Full post
5) Why Isn't Harvey Having More Impact On Energy Prices? Shale
Bloomberg, 28 August 2017
Liam Denning
The shocking images of Houston's freeways transformed into waterways by the deluge of Hurricane Harvey call to mind similar footage of the floods unleashed on the Gulf coast by Hurricanes Katrina and Rita 12 years ago.
Along with everyone else there, the energy industry tied so closely to this region was hit hard, both then and now. Yet, while the full extent of the latest damage is still to be determined as the disaster is ongoing, it may be that the hurricane seasons of 2005 and 2017 will come to be seen as bookends on a transformation in the U.S. energy business.
Even as they grapple with more existential problems (if they're in southern Texas or are worried about people who are), energy traders are also confronted with the fact that, by and large, the markets they deal in appear largely unperturbed.
Prices of gasoline and other refined products have jumped -- a logical outcome, given that about one-sixth of U.S. refining capacity has been shut down. Yet crude oil and natural gas prices were either flat or down on Monday morning.
This is in marked contrast to the situation 12 years ago. Natural gas illustrates the point. When Katrina and Rita hit the Gulf, natural gas prices spiked into double digits, versus today's price of just less than $3 per million BTU.
More striking, though, is the differing impacts on expectations, as expressed in the futures market then and now. Here is what happened in 2005:
The hurricanes of 2005 sent natural gas futures soaring, not just for the immediate aftermath but years out
And here's how things have moved this month. Spot the difference:
Hurricane Harvey's impact has barely registered in gas futures markets, especially further out on the curve
Indifferent
The key factor here is the shale boom. In its early stages, it got added impetus from surging natural-gas prices, due to both the commodity supercycle in the decade before 2014 and disaster-related spikes such as those in the summer and fall of 2005. You can see this in the dramatic shifts in where the U.S. gets its domestic natural gas supply:
Back To The Land
The shale boom accelerated in Texas and Louisiana after 2005, with Appalachia picking up the pace after 2009. Offshore production, meanwhile, has slumped
The shift away from the hurricane-prone waters of the Gulf of Mexico means even a catastrophic event like Harvey now has little impact on pricing. Indeed, even onshore production in Texas and Louisiana has declined as a share of domestic U.S. natural-gas production in recent years as the first wave of the shale boom has passed and growth has shifted elsewhere, particularly Appalachia.
If anything, Harvey is bearish for natural gas because of the disruption to local demand, which hasn't declined in importance over the past decade:
Demanding
While Texas and Louisiana, along with the offshore Gulf of Mexico, have declined as a share of U.S. natural gas production, their share of demand has stayed relatively constant
Full story
6) Harvey’s Widespread Destruction Tests U.S. Shale
The Wall Street Journal, 29 August 2017
The tropical storm is the biggest to hit the sector since shale drilling took off a decade ago; production may be slow to bounce back
An oil refinery is seen in Corpus Christi, Texas, on Saturday before the arrival of Hurricane Harvey. Several analysts say much of the region’s 1.4 million barrels a day of output is shut down. PHOTO: JOE RAEDLE/GETTY IMAGES
HOUSTON—Tropical Storm Harvey, the most powerful storm to hit Texas in half a century, has shut a significant portion of the state’s shale production, cutting off as much as 15% of U.S. oil supplies.
Now, in what is the first major storm to test U.S. shale, the big question is how quickly the sector can make a comeback.
Before Harvey made landfall as a hurricane Friday, many big shale producers in the Eagle Ford shale fields near Corpus Christi, Texas, shut down their oil and gas wells, and initial estimates for lost production were between 400,000 and 500,000 barrels a day.
As the hurricane’s widespread devastation has become clearer, several analysts say it is almost certain that much, if not most, of the region’s 1.4 million barrels a day of output is shut down.
Shale producers also rely on a vast, multibillion-dollar network of energy infrastructure—from ports to train tracks to pipelines—that has developed in recent years along the Texas coast. Many pieces of that network appear to be swamped too.
The need for that infrastructure may slow shale’s ability to bounce back. In the past, hurricanes have dealt a blow to the Texas energy industry by knocking out offshore oil platforms in the Gulf of Mexico; but in many cases, once storms passed, those big installations could quickly return to pumping crude.
“The effect to shale could linger given the extent and catastrophic level of forecasted flooding which interferes with shale logistics,” said Benny Wong, an analyst with Morgan Stanley.
The fracking-induced boom in Texas has heightened the state’s role in the U.S. economy, which means that if the oil fields and surrounding infrastructure are out of service for long, it could have outsize economic impacts on the state and shave $20 billion or more off U.S. gross domestic product, said Joe Brusuelas, chief economist with RSM US LLP, an accounting and consulting firm.
The Eagle Ford shale in South Texas produces 1.4 million barrels of oil a day, second in output in the state only to the Permian Basin of West Texas. There hasn’t been a storm of this magnitude since shale drilling took off about a decade ago.
Companies were trying Monday to sortie out and assess the damage to their facilities in the Eagle Ford shale, which took a direct hit from Harvey. But the sprawling nature of the storm—it was downgraded from hurricane status on Saturday—and continued rain in some areas hampered those efforts.
Full post
The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.
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