Tropical Storm Nate Closes In on Gulf of Mexico
Refinery operations on the U.S. Gulf Coast have normalized since the devastation of hurricanes Harvey and Irma, but Tropical Storm Nate now threatens to inundate Central America and potentially hit the U.S. as a hurricane on Sunday, with an impact on offshore oil & gas operations and citrus and cotton crops in the southern U.S.
Industrial Info's new Disaster Impact Tracker is monitoring the course of the storm and its potential impact on plant operations. The Disaster Impact Tracker allows users to see the plants that are affected by a natural disaster, such as hurricanes or earthquakes, and those that could be impacted by future weather-related events. The tool uses numerous third-party organizations to obtain the most accurate information on natural disasters and how they affect plants within the "disaster zone." For more information, see September 12, 2017, article - Industrial Info Introduces Disaster Impact Tracker.
Nate was expected to soak Honduras and Nicaragua, target Mexico's Yucatan Peninsula on Friday and potentially strike the U.S. Gulf coast this weekend. Nate could come ashore anywhere from Louisiana to Florida's Panhandle.
The storm "could affect portions of the northern Gulf Coast as a hurricane this weekend, with direct impacts from wind, storm surge, and heavy rainfall," Eric Blake, a specialist at the National Hurricane Center in Miami, Florida, wrote in a forecast analysis. "Residents along the Gulf Coast from Louisiana to Florida should monitor the progress of this system for the next several days."
The storm was expected to strengthen as it moves over warmer waters, but at this point, forecasters said, "it is too early to specify the timing, location, or magnitude of these impacts. "
Nate had maximum sustained winds of 40 miles per hour on Thursday, and was moving northwest at 10 miles per hour. That was expected to change by Friday, the National Hurricane Center said, when Nate takes a more north-northwestward path and picks up speed. Sustained winds were expected to reach 75 miles per hour by Sunday.
Another hurricane strike on the U.S. Gulf Coast could potentially shut down offshore oil and natural gas rigs and deal another blow to citrus and cotton growers.
Oil companies have begun removing non-essential personnel from platforms and rigs in the Gulf, and oil futures inched higher on Thursday, buoyed by concerns about energy production and supply. Offshore drilling in the Gulf accounts for 17% of U.S. crude oil production, and the Gulf Coast has 45% of its refining capacity, according to the Energy Information Administration.
The Bureau of Safety and Environmental Enforcement (BSEE) estimated Thursday that about 14.55% of oil production in the Gulf of Mexico had been shut in, which equated to 254,607 barrels of oil per day (BBL/d). The bureau estimated that 6.42% of the natural gas production, or 206.71 million cubic feet per day in the Gulf of Mexico, had been shut in.
Industrial Info is closely tracking the plants that could be impacted by Nate. In the Yucatan and Quintana Roo regions of Mexico, 16 industrial plants were in the direct path of the storm. Two power plants with a combined installed capacity of 181 megawatts in Quintana Roo were most likely to feel Nate's impact. As of Thursday, the plants were expected to remain operational, with no plans to cease operations before landfall.
Multiple ports in Mexico could witness a disruption in operations, namely in Cozumel, Isla Mujeres and Morelos. Each port authority confirmed they were closely monitoring the storm and would issue public bulletins as necessary.
Two limestone quarries in Mexico were in Nate's path, and both suggested they would maintain normal operations ahead of the storm. Also, the storm could affect two food and beverage plants in the region.
The Atlantic hurricane season of 2017 has been one of the most intense in years, with 13 named storms and five major hurricanes so far. And the season's not over yet. In August, Hurricane Harvey temporarily shut down about 25% of oil and natural gas production in the Gulf and as much as 20% of U.S. refining capacity and destroyed an estimated $150 million of U.S. cotton crops. Less than two weeks later, Hurricane Irma wreaked havoc on Florida citrus groves. For more information, see Industrial Info's September 25, 2017, article -- Texas Marks Steady Recovery from Hurricane Harvey.
Orange juice futures for November delivery rose as high as $1.5980 per pound (/Lb) before pulling back to close at $1.5920/Lb. Florida is the world's second-largest orange juice producer.
The storm could deal another blow to U.S. cotton growers as well, particularly western portions of the Southeast, including Alabama and Georgia. Georgia is the second-largest cotton grower after Texas. Cotton futures for December delivery traded up to 69.45 cents/Lb and finished at 68.90 cents/Lb Thursday.
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