Hurricane Harvey threatens production along pipelines and refineries in Texas
The impact of Hurricane Harvey forced 18 refineries in Texas to partially or completely shut down. The closures meant that about 3.6 million barrels of oil per day, representing about 20 percent of U.S. refining capacity, was compromised. On average, Texas produces a total of roughly 5.6 million barrels per day along the U.S. Gulf Coast, which supports communities all around the country.
The refined oil produced by Houston’s refineries is transported through pipelines that run throughout the country. The Colonial Pipeline, which runs 5,500 miles from Houston to Linden New Jersey, is the primary supplier of gasoline, home heating oil, aviation fuel, and refined petroleum products to the East Coast. Along this pipeline, oil travels through 11 states, supplies seven airports, and ensures the operability of several military installations operated by the Department of Defense. As of August 31, 2017, Colonial Pipeline facilities west of Lake Charles, Louisiana went offline. Although facilities east of Lake Charles have escaped the brunt of the storm and are capable of transporting refined products along the coast, their ability to do so has been severely limited by the loss of products originating in Texas.
Similarly Magellan Midstream Partners LP is another key pipeline that serves as a 9,700 mile arterial transport system spanning across 12 states in the Midwest. Magellan works with refineries to transport or store gasoline, diesel, crude, and jet fuel. This pipeline halted oil transport to their Galena Park marine terminal in Texas City, and suspended the crude oil and refined product pipeline in Houston. These shutdowns could have impacted Marathon Petroleum Corp.’s Galveston Bay refinery, as they receive crude oil from Magellan to produce 451,000 barrels per day. However, Magellan announced inspections are on-going and their refined products pipeline has already resumed operations in their East Houston terminal, allowing the company to resume delivery of their product to West Texas. As of September 6, 2017, Magellan has not given an update on when their Galena Park marine terminal in Texas City will reopen.
In addition to the disruptions to fuel transportation infrastructure, two of the largest refineries in the U.S. suspended operations. Motiva, owned by Saudi Aramco, is the largest plant in the U.S. and went offline on August 31st, 2017 with the production capacity of approximately 600,000 barrels per day at their Port Arthur Texas location. The second largest is Exxon Mobil’s Baytown refinery, which also shut down and has the production capacity of 560,500 barrels per day. On September 5, 2017, Motiva announced their Port Arthur refinery began its recovery and is expected to be partially functional by September 11, 2017. Exxon Mobil also announced Tuesday that its Baytown refinery is undergoing steps to recover, while their Beaumont refinery remains offline due to damages from flooding.
Further Reading
The largest oil refinery in the US is shutting down because of flooding from Harvey – Business Insider
Storm Harvey paralyzes a fifth of U.S. fuel output – Reuters
U.S. gasoline prices jump as Hurricane Harvey knocks out Texas refineries – Reuters
Prolonged Shutdowns From Harvey Could Strand Shale Output – Bloomberg
About Colonial – Colonial Pipeline Company
System Map – Colonial Pipeline Company
Harvey Storm Response – Colonial Pipeline Company
Operations – Magellan Midstream Partners L.P.
Magellan Midstream pares operations at U.S. Gulf terminal (MMP) – Business Insider
Magellan Midstream Advises Operational Impact of Hurricane Harvey – Magellan Midstream Partners L.P.
Largest refinery in North America, owned by Saudi Arabia, goes dark in Harvey’s wake – Washington Examiner
Hurricane Harvey Forces Even More Texas Oil Refineries To Close – Forbes
Motiva refinery in Port Arthur begins to roar back after Harvey shutdown – Houston Chronicle
Exxon says making progress on reopening Baytown refinery – Reuters