Aug 26: Special Hurricane Update

The rapid intensification of Hurricane Laura overnight has surprised many, but residents in the crosshairs of the escalating threat posed by the powerful storm in Texas and Louisiana are preparing and in many cases evacuating.  Of course, the target path of the storm also threatens a hub of the U.S. oil and gas production and refining in Beaumont, Port Arthur and Lake Charles.

The National Hurricane Center announced this morning that Laura has become a "major" Category 3 hurricane and could be briefly upgraded to Category 4 within 24 hours.

API is holding a press call tomorrow and has emergency preparedness experts they can provide.  Reach out to Scott Lauermann for more at LauermannS@api.org   API also posted this blog recently that says the industry is working hard to protect its workers and communities, all-the-while working to ensure the reliability of the fuel supply chain because American families rely on the uninterrupted supply of energy - in good weather and bad.

Oil Production

The US Bureau of Safety and Environmental Enforcement (BSEE) said Hurricane Laura's expected landfall forced offshore Gulf of Mexico operators to stop production, with 84.3% of Gulf oil and 60.94% of natural gas production now shut in. The storm has forced evacuations of 46.5% of the manned platforms in the Gulf.

Refining

Valero issued this statement yesterday:

In advance of Hurricane Laura’s expected landfall, Valero’s Port Arthur refinery is in the process of an organized shut down to assure safety and to protect the environment.

Our other Texas Gulf Coast operations continue to work through hurricane preparedness protocol that include activities such as assessing refinery operations and potential storm impact, reviewing safety and environmental protection protocols, securing equipment, and ensuring we have adequate supplies available. We are monitoring the storm’s path and will make other refinery operation decisions as appropriate. We are working closely with local, state, and federal agencies to monitor the situation.

The health and safety of our employees, their families, and surrounding community is our top priority as we prepare for Hurricane Laura.

Shell's Deer Park, Texas, joint venture refinery with Pemex will continue to operate despite rising risks from Hurricane Laura and will continue to monitor the situation, our friend Curtis Smith said.

LNG

Cheniere Energy is temporarily suspending operations at the Sabine Pass LNG plant in Louisiana in anticipation of Hurricane Laura. Meanwhile, two other LNG plants in the area said they plan to continue limited operations -- Cameron LNG's Cameron plant in Louisiana and Freeport LNG's Freeport plant in Texas.

Electricity

EEI posted these tips for customers:

Here are ways customers and communities can prepare for Tropical Storms Laura and Marco:

• Pay close attention to local weather reports on the radio, television, and Internet.
   
• Review EEI's hurricane safety tips. For more hurricane safety and preparation tips, visit the National Hurricane Survival Initiative.
   
• Develop an emergency plan that addresses any special medical needs you or your family members have. Call your local emergency management office to discuss necessary arrangements.
   
• Have your emergency outage kit stocked and readily available. Make sure to include masks or face coverings and hand sanitizer.
   
• Heed all evacuation warnings, and know all evacuation routes if you live close to the coast. If you or anyone you know has special needs in case of evacuation, contact your local emergency management office. Find the phone number at www.FEMA.gov.
   
• Be sure to include your pets in your evacuation plan. Not all evacuation shelters and hotels accept pets, so you may need to identify a pet-friendly hotel along your evacuation route.
   
• Stock up on non-perishable food, water, medications, and any other necessities to avoid the need for travel during a storm. If you live in an area where evacuations may be necessary, be sure to research any changes to local policies that may have been made due to the COVID-19 pandemic.
   
• Learn what to do in case of a power outage.
   
• Make sure your contact information is current with your local electric company so you can receive any status or safety updates the company might put out during an emergency. Be sure to follow your electric company on social media for real-time updates.

Insurance Issues

As Hurricane Laura's impact reaches across the Texas and Louisiana coasts, aside from power outages, physical access issues, evacuations and curfews, COVID-19 adds a new dimension.  A key step in recovering from storms involves dealing with insurance. Bracewell has a great Insurance Recovery expert in my colleague Vince Morgan.  He is another good resource on this topic and he put together several important points to consider here.  Let me know if you need more from him.

 

We are tracking the issues and are happy to help.  Please feel free to pass this along to any colleagues you know that might be following the hurricane and its impact.  I will send further updates as more info becomes available.