Safety 

The oil and natural gas industry has developed standards to ensure the safety of personnel on drilling rigs and platforms leading up to and following a hurricane. During a hurricane, it is important to understand the environmental conditions in and around the Gulf of Mexico and to apply that knowledge to decrease vulnerability of offshore and onshore facilities.

Above all, the industry is dedicated to ensuring the safety of its employees. Days in advance of a tropical storm or hurricane moving toward or near drilling and production operations, companies evaluate the situation and decide whether to evacuate personnel or relocate drillships to a safe location. After a storm has passed, operators conduct “flyovers” of onshore and offshore facilities to evaluate damage from the air. Once safety concerns have been addressed, operators send assessment crews to offshore facilities to physically assess the damage. If facilities and supporting infrastructure are undamaged and ready to accept shipments, operators begin to restart production and drilling rigs commence operations.

Market Response

In spite of all the precautions taken by the industry, major hurricanes in the Gulf of Mexico can still strain U.S. oil and natural gas operations.  When a hurricane disrupts refinery or pipeline operations, the immediate loss of gasoline and diesel production combined with a lack of demand for crude can result in a two-tier market—meaning the price of fuel can rise while the price of crude can fall. At the same time, there can also be pockets of rising demand for fuel.

Market forces and the cooperation of government and the oil and natural gas industry are often the most effective paths to restoring supplies taken off line by hurricanes. The industry seeks to resume normal operations as quickly and safely as possible to continue to meet consumer demand. The government also steps in to alleviate supply concerns by issuing multi-state fuel waivers that encourage imports and lending crude oil from the nation’s Strategic Petroleum Reserve.

Interconnected Petroleum Supply System

The Gulf Coast region of Louisiana, Mississippi, Alabama and Texas is the heart of the nation’s oil and natural gas industry. It accounts for about 30 percent of the oil and 13 percent of the natural gas produced in the United States, and nearly half of U.S. refining capacity. Because refineries and pipelines originating in the Gulf Coast region are major suppliers to other parts of the nation, motorists in states far from Texas and Louisiana can sometimes feel the price effects of a hurricane.

According to the Energy Information Administration, half the gasoline used on the East Coast and half of the crude oil run in refineries in the Midwest are shipped from the U.S. Gulf Coast region of the United States. The country relies on pipelines, barges and tankers to deliver crude oil and refined petroleum products reliably to where they are needed throughout the country. In order for pipelines to move these commodities they must have a steady supply to push forward what is already in the lines and electric power to run the pumps that move the commodities along.

Consumer Tips

According to Federal Emergency Management Agency, consumers in the path of a hurricane or tropical storm should have a proper safety and evacuation plan and secure their homes. As a storm approaches, consumers around the country should conserve energy use in homes and maintain regular buying habits for their vehicles, which can help alleviate a sudden surge in demand.