All week long we’ve been seeing footage of dazed evacuees gathering in flood shelters in the US state of Texas. Many people lost their lives as a result of Hurricane Harvey and the final bill for reconstruction that Texas will have to face in the weeks, months and years to come is still unclear.
Preliminary estimates put the economic cost at 190 billion dollars, making it the costliest natural disaster in US history.
Harvey has also swamped one-third of oil refining capacity of the US. It could be weeks before refineries return to full operation. This has caused huge concerns about fuel supplies. Prices for refined products like gasoline have jumped.
“There’s obviously been severe disruptions in the products market, nearly four million barrels per day of refining capacity was offline,” says Amrita Sen, chief oil analyst at Energy Aspects.
“The major pipeline that goes from the US Gulf coast, where Hurricane Harvey hit, to the US East Coast has been shut because they don’t have enough products to supply and therefore it is likely that you’re going to see inventories are drawn down a lot,” she continues. “Right now, there’s enough in stock but if this persists for longer, then there’s a risk of shortages.”
Sen explains that the disruption is already being felt well beyond the state of Texas. “The US is now a major oil products exporter,” she says. “You’ve already seen global gasoline and diesel prices soar on the back of this because now the world relies on US supplies of these products, so you are going to get a knock-on impact globally as well.”
Prices for crude oil, meanwhile, have taken a dive, as demand from the oil refineries which have been affected by Hurricane Harvey has dried up.
Whether the US will be able to make a speedy recovery remains to be seen, says Sen. “From Hurricane Harvey landfalling, there hasn’t been a significant amount of damage done to refineries, which is the good news. The bad news is that flooding actually can cause far more sustainable damage because if you’ve got water in your pumps or in your cokers that can take a lot longer and potentially can be quite dangerous when you’re restarting,” she says.
Also on this episode of Counting the Cost:
The BRICS summit: Remember the BRICS? Back in 2009, the bloc of major developing economies, made up of Brazil, Russia, India, China and South Africa, wanted to offer an alternative vision to the Western dominance of global affairs. But as the organisation gets ready for its ninth summit, its member countries have had a difficult twelve months. Alex Wolf of Standard Life Investments weighs in on whether the bloc can exert an economic force in 2017.
Bolivia’s Tipnis road: Bolivian President Evo Morales has enacted a law which gives the green light to a highway that will link the country’s remote Beni department to the rest of the country. The road is set to cut through a national park known for its abundant wildlife and indigenous communities barely touched by modern life. While successive Bolivian governments have promised a road they said would bring jobs and development, indigenous groups have voiced their opposition to the plan. Daniel Schweimler reports on the controversy from Bolivia.
Mining in Brazil’s Amazon? This week, a Brazilian court suspended President Michel Temer’s decree to remove a ban on private companies exploiting the country’s Renca reserve. Toby Gardner of the Stockholm Environment Institute talks on Temer’s plans to open up a vast area of untouched rainforest to mining companies.