Peak Atlantic hurricane season creates uncertainty for US chemical sector

The 2018 Atlantic hurricane season, including the recent Hurricane Florence, has brought an uncomfortable amount of uncertainty in predicting the severity of each developing storm, the American Chemistry Council (ACC) said.

The Atlantic Hurricane Season begins on June 1 and ends on November 30. Image: NOAA

Atlantic hurricanes have often wreaked havoc on the U.S. petrochemical industry, where many facilities are placed along the U.S. Gulf Coast. Flooding and storm damage impacts production, buyers, storage, highways, rail and ports.

The peak of the US hurricane season is in September, and the ACC said the uncertainty of how severe each storm may be means the industry needs to prepare hurricane plans earlier and better than ever before.  

“Hurricane season in the Atlantic is just reaching its peak with several active storms churning out in the ocean,” the ACC wrote in its chemical blog.

“Extreme weather events can certainly be unpredictable, but a well-orchestrated plan can help tackle unwanted surprises. As we can see from the predictions for increased and more extreme storms in the future, the next test for our industry could be around the corner.”

The Atlantic Hurricane season begins on June 1 and ends on November 30, with the peak generally in September.

Ten tropical storms have formed in the 2018 Atlantic season, five of which have been hurricanes, one of which has been major, Florence, the National Hurricane Center said.

Hurricane Florence

Hurricane Florence was a powerful and long-lived Cape Verde hurricane, as well as the wettest tropical cyclone on record in the Carolinas. It formed on August 31, 2018 and did not dissipate until September 19th.

By the time it made landfall on September 14 in North Carolina, the hurricane had been downgraded from a Category 5 to Category 1 storm, but rain continued for several days.

Torrential downpours dropped upward of 50 inches of rain in some areas of the Carolinas as the storm made landfall and weakened. Across North Carolina, Florence dumped about 8 trillion gallons of rain, accordign to the National Weather Service.

Nearly 20 rivers in the Carolinas were expected to crest in major flood stage the week after the storm hit. The rivers are flooding into the cities where thousands of homes and businesses are threatened.

The Cape Fear River in North Carolina was expected to crest at nearly 62 feet, which is higher than the 58.9 feet reached after Hurricane Matthew, according to the National Weather Service.

Florence has killed at least 32 people and disrupted the lives of millions.

Energy Impact

While flood water has not entered Duke Energy’s Brunswick Nuclear Plant, two units remain offline as flooded roads and downed trees have made it impossible for plant staff to reach the plant, or ‘storm riders’ to leave without being ferried out.

The GE Hitachi Nuclear Energy Americas plant in Wilmington, North Carolina, which produces nuclear fuel rods, will remain closed for at least two weeks due to minor building damage and grounds cleaning to remove debris, the company said.

Marine operations in North Carolina, including the ports of Wilmington and Morehead City, were closed for a few days before and after the storm hit. Both ports reopened for employees on September 20th.

A CSX train derailed on September 16 near Lilesville, North Carolina, due to a washed-out track.

CSX Rail issued an embargo on inbound traffic to facilities located between Lumberton, North Carolina and Wilmington, North Carolina, on September 18th.

Gas stations in the areas affected by Florence saw a sharp spike in demand before the storm hit as residents evacuated. But gasoline shortages have been geographically confined, with no major ripple effects in the rest of the nation.

Hurricane Harvey in 2017, by contrast, slammed the U.S. refining capitol in Texas, causing gasoline prices to spike across the nation until the facilities gradually reopened.

Economic Impact

Despite the wide path of devastation left by Florence, its effect on the U.S. economy and the energy industry is likely to be modest, according to analysts.

The impact of Hurricane Florence is expected to trim third-quarter growth by one-to two-tenths of a percentage point, according to Moody’s Analytics, or by two-to three-tenths of a percentage point, according to Oxford Analytics.

The damage to homes, businesses and public infrastructure is expected to total anywhere from $16 billion according to Moody’s, to $40 billion according to Oxford. AccuWeather estimates that Florence will cause $30 billion to $60 billion "in economic impact and damage."

Estimates are still unknown because of severe flooding that could last for days.

2017 major storms

Hurricanes Harvey (in Texas) and Irma (in Florida) in 2017 cut U.S. economic growth in the third quarter by about a half-percentage point. And the costs to repair were well over $100 billion.

Image: Andi Vaughn

Unlike other hurricanes to hit the U.S. before it, Harvey dropped an unprecedented 33 trillion gallons of water, 15 trillion of which flooded the Houston, Texas area alone.

“By all measures it (Hurricane Harvey) was a historic storm of epic proportions that overwhelmed many in its path displacing more than 30,000 people and causing an estimated $125 billion in damage,” the ACC said.

Harvey struck Houston, the heart of the nation’s energy industry. Many petrochemical plants and refineries had to go offline during and after the storm due to preparation, power outages, water and wind damage and even lack of feedstocks as the supply chain was in turmoil for weeks.

Storm preparation

“Since storms present a real risk to these vital operations, facility operators stress the importance of planning early and not waiting until the next hurricane season rolls around to take action,” the ACC said. “Planning for extreme weather events typically involves focusing on three phases: preparation, response, and recovery.”

Preparation starts as early as when a chemical facility is designed and built, the ACC said. The severity of hurricanes is usually based on the wind and storm surge, but Hurricane Harvey provided a strong reminder not to underestimate the damaging effects from extreme rainfall.

The early stages of response planning include testing backup generators, taking stock of emergency supplies and securing loose or vulnerable materials and equipment; evacuating personnel and determining whether to shut down or not.

Recovery starts with making sure employees have a place to stay and can get to work. Restoring operations is done slowly and begins with bringing in an inspection crew to conduct a thorough assessment of the site’s condition before allowing other employees to come back to work.

By Heather Doyle