The Fuse

Hurricane Ida Devastates Louisiana

by Nick Cunningham | August 31, 2021

Hurricane Ida left catastrophic damage in its wake, with the Category 4 storm bringing 150-mile-per-hour winds to the coast of Louisiana.

More than 1 million people were left without power, raising the risks of a humanitarian disaster that could persist for weeks. The storm also tore through a region with a heavy concentration of oil and gas production and refining, and it remains unclear how long the impacts will be felt.

Energy installations knocked out

Hurricane Ida rapidly intensified from a tropical depression to a Category 4 hurricane in a short period of time, supercharged by Gulf of Mexico waters that have warmed as a result of climate change. “This is exactly the kind of thing we’re going to have to get used to as the planet warms,” Kerry Emanuel, an atmospheric scientist at the Massachusetts Institute of Technology, told the Washington Post.

The very industry that continues to play an outsized role in warming the planet also suffered a direct hit from Hurricane Ida.

About 94 percent of the Gulf of Mexico’s offshore oil production and 93 percent of its natural gas production was offline as of Monday. That leaves 1.7 million barrels per day of oil output on the sidelines. Oil prices did not appreciably move in the wake of the storm, offset by expected OPEC+ production increases and ongoing Covid-19 demand impacts.

The Colonial Pipeline, a long-distance pipeline that carries refined products from the Gulf Coast to the U.S. northeast, was temporarily idled because of Hurricane Ida, but was expected to quickly return to service.

More significant was damage to onshore refining facilities. Nine major refineries have either shut-in or reduced processing rates, affecting roughly 8 percent of the nation’s total refining capacity. Phillips 66 could not even begin to assess the damage at its 255,000-barrel-per-day refinery in Louisiana because a levee failed and inundated the facility with water. ExxonMobil shut its 500,000-barrel-per-day refinery and petrochemical plant in Baton Rouge.

So, while the Colonial Pipeline may not suffer a big outage, the interruption of refining processing could impact gasoline prices, especially if the outage persists for weeks. That is somewhat offset by the fact that those refineries won’t be consuming crude during their outages, dampening the oil price impact.

According to the Wall Street Journal, around 4.4 million barrels per day of refining capacity and another 6.5 million tons per year of ethylene cracking capacity – to make plastics – was in the path of the storm, although it is unclear to what extent this was interrupted.

Lengthy recovery

Another major blow to the Gulf Coast energy complex is the damage to Port Fourchon, the energy hub that serves the offshore oil industry. According to Bloomberg, more than 250 companies that work on the Gulf or offshore use Port Fourchon as their base of operations. It also is a vital hub where multiple crude oil pipelines terminate, pumping offshore oil to shore.

As Bloomberg notes, Port Fourchon is also where the Louisiana Offshore Oil Port (LOOP) is located, which handles 15 percent of the country’s oil supply, and is a substantial import and export terminal.

Offshore platforms may have escaped unscathed, but the onshore hub at the port is vital to get things back up and running. Simply transporting workers to and from the platforms by helicopter may prove difficult with the onshore installations damaged.

While oil production was shut in and refineries were engulfed with water, the damage to eight major electric transmission lines could end up being the most significant outcome of the storm. All of Orleans Parish and nearly all of Louisiana was left without power on Monday.

One major electrical transmission tower collapsed and fell into the Mississippi River. “At 8 a.m. across our service area, 216 substations, 207 transmission lines, and more than 2,000 miles of transmission lines are out of service. We know of one transmission line that spans the Mississippi River that is down,” Entergy, the main utility in the state, said in a statement on Monday.

Repairing transmission lines is a tougher task than clearing downed debris from local distribution lines at the street level. High-voltage lines are the electric equivalent of interstate highways, and their collapse means that power plants can’t deliver electricity to homes and businesses.

As of Tuesday at 11am Eastern, Entergy said that it had 865,000 customers without power, and that the hardest hit areas could be offline for weeks.

Entergy also shut its Waterford-3 nuclear power plant in Killona, Louisiana after damage to the grid, and it is currently running on backup diesel generators to keep the plant cool.

Jefferson Parish Emergency Management Director Joe Valiente told NPR that a large swathe of the Louisiana coast could be without power for up to six weeks. “There are about 10 parishes that the electrical grids are completely collapsed and damaged, smashed, out — however you want to put it,” he said.

Energy markets may suffer from disruptions and volatility as a result of this major hurricane, but the real story could be the effects on the people of the Gulf Coast. The one piece of good news was that the expensive levee system built in the wake of Hurricane Katrina appears to have held up, sparing New Orleans from a much bigger catastrophe.

But going weeks without power, cell service, air conditioning and potentially even clean water will result in miserable conditions, at best. A heat advisory is in place for much of southeastern Louisiana. New Orleans is telling people who evacuated to not come back for now. Sewage pumps also lacked electricity, threatening sewage backups. As a result, New Orleans residents are being told to use as little water as possible.

It is worth noting that Entergy itself has a track record of blocking climate action, even as it finds itself inundated by the disaster. But without rapid reduction in greenhouse gas emissions, hurricanes like Ida will only grow more severe over time.

Image: Entergy