Hurricane Ida Hit An Important Oil And Gas Hub, Which Will Likely Drive Up Gas Prices

Hur­ri­cane Ida has severe­ly dis­rupt­ed the lives of peo­ple who live in south­east­ern Louisiana with pow­er fail­ures, cell­phone out­ages and closed busi­ness­es. But the storm also wreaked hav­oc on the region’s biggest indus­try — oil and gas. Ida’s fero­cious winds and storm surge made a direct hit on Port Four­chon, the nation’s most impor­tant hub for the off­shore indus­try in the Gulf of Mex­i­co. NPR’s John Bur­nett reports.

JOHN BURNETT, BYLINE: If you look at a map of Louisiana, the coast­line is a vast watery land­scape of marsh­es, swamps, bays, rivers, bay­ous and bar­ri­er islands — as the license plate slo­gan says, a sports­man­’s par­adise. But this is also a hard­work­ing coast, espe­cial­ly the area clob­bered by Hur­ri­cane Ida. How bad is it?

MIKE MONCLA: I mean, that is a huge lick to our state and the nation.

BURNETT: Mike Mon­cla is pres­i­dent of the Louisiana Oil & Gas Asso­ci­a­tion. More than 250 com­pa­nies with a stake in the Gulf depend on Port Fourchon.

MONCLA: Twelve hun­dred trucks per day use High­way 1 that goes to the port down there. To not be able to get oil­field ser­vices to those ports is def­i­nite­ly going to hurt our indus­try and hurt the state.

BURNETT: Nine­ty per­cent of the Gulf’s pro­duc­tion plat­forms and drilling rigs are ser­viced out of Port Four­chon. More­over, 15% of the nation’s oil and 5% of its nat­ur­al gas comes from deposits under the Gulf seabed. One state study projects that a 90-day clo­sure of Port Four­chon would result in a near­ly $8 bil­lion reduc­tion in the U.S. Gross Domes­tic Product.

SHUBHRA MISRA: Port Four­chon is the major hub for all of the Gulf in terms of pro­duc­tion, in terms of oper­a­tions, both off­shore and onshore.

BURNETT: Shubra Mis­ra is a senior research sci­en­tist with the Water Insti­tute of the Gulf in Baton Rouge.

MISRA: If a facil­i­ty like Port Four­chon is dam­aged, the entire sup­ply chain gets inter­rupt­ed with the cor­re­spond­ing eco­nom­ic impacts.

BURNETT: Sup­ply ves­sels can’t move. Crews don’t get shut­tle to the rigs. Man­u­fac­tur­ing and main­te­nance halts. Onshore pro­duc­tion and pro­cess­ing facil­i­ties can’t get raw crude and nat­ur­al gas through pipelines. Every­one inter­viewed for this report agrees the shut­down of Port Four­chon will like­ly dri­ve up the price of crude and the cost of gas at the pump. The destruc­tion is going to be mas­sive. Sus­tained winds of 150 miles per hour, with one gust clocked at 172, were felt at the port, which is the south­ern­most set­tle­ment on the Louisiana coast. Drone video shows Louisiana High­way 1, the only road in and out of the port, is buck­led, crum­bling and sunken.

With cli­mate change warm­ing the Gulf and mak­ing hur­ri­canes even more vio­lent, the off­shore indus­try faces cer­tain chal­lenges, says Alex Colk­er, an oceanog­ra­ph­er at the Louisiana Uni­ver­si­ties Marine Consortium.

ALEX KOLKER: Our threats are increas­ing as we see more fre­quent storms, more intense storms and high­er water lev­els. And the coast is reced­ing, and that land loss makes this area more vul­ner­a­ble. So we’ve got just a mul­ti­tude of threats that increase the expo­sure of this area.

BURNETT: Six­teen years ago, Hur­ri­cane Kat­ri­na heav­i­ly dam­aged a Shell Oil plat­form and cap­sized a deep­wa­ter plat­form belong­ing to Chevron. And some off­shore facil­i­ties still haven’t resumed oper­a­tions since Trop­i­cal Storm Cristo­bal last year. Again, Mike Mon­cla, with the Louisiana Oil & Gas Association.

MONCLA: Every time we have a hur­ri­cane that rav­ages through those plat­forms and beats them up, it’s a dif­fi­cult recovery.

BURNETT: Oil com­pa­nies have been forced to invest in their off­shore infra­struc­ture to make it more resilient against ever-stronger Gulf storms. The same goes for onshore facil­i­ties, from sup­ply hubs like Port Four­chon to vul­ner­a­ble refiner­ies and petro­chem­i­cal plants that are clus­tered along the coast in Texas and Louisiana. Roy­al Dutch Shell reports that it’s Nor­co refin­ery, just west of New Orleans, had lost pow­er and sus­tained major flood­ing because of Ida.

The long-term effects from Hur­ri­cane Ida will also be felt in cor­po­rate board­rooms far from the mug­gy coast­line of the Gulf. As more intense and more fre­quent storms con­tin­ue to pound off­shore oil and gas facil­i­ties, indus­try experts say shale fields like the Per­mi­an Basin in West Texas become more attrac­tive to investors.