Beryl Narrowly Missed the Gulf’s Energy Heartland

Hurricane Beryl, ahem, barreled into America’s Gulf Coast as a Category 1 storm, and whenever something like that happens the entire global energy industry holds its breath. The Gulf of Mexico is not just a frequent target and breeding ground for massive storms, it is also one of America’s — and the world’s — most important energy hubs. Texas and Louisiana contains giant oil and gas fields, and the region is home to about half of the United States’ refining capacity.

At least so far, the oil and refining industry appears to have largely dodged Beryl’s worst effects. The storm made landfall in Matagorda, a coastal town between Galveston and Corpus Christi, both of which are major centers for the refinery industry. Only one refinery, the Phillips 66 facility in Sweeny, Texas, was in the storm’s cone, according to TACenergy, a petroleum products distributor. Phillips 66 did not respond to a request to comment, but Reuters reported that the Sweeny facility as well as its refinery in Lake Charles, Louisiana were powered and operating. Crude oil prices have seen next to no obvious volatility, rising to $83.88 a barrel on July 3 and since settling around $82.84.

Electricity consumers, however, were not so lucky. As many as 2.7 million Texans lost power, and some 2.3 million are currently experiencing outages according to PowerOutage.us. In Arkansas and Louisiana, about 35,000 electric customers are without power. ERCOT, the energy market for about 90% of Texas, described the current outages as “local in nature and not an ERCOT grid reliability issue,” indicating that the problem is with distribution and transmission, not supply and demand.

The heavily industrialized Gulf Coast would seem to be a perfect spot to build out offshore wind infrastructure, but the regular hurricane-force winds in the region are holding it back. The Department of the Interior has successfully auctioned off just one lease for wind development off of Lake Charles, Louisiana near the Texas border. The next auction will include sites along the Texas coast closer to Houston and Bay City, Texas, and thus closer to where Beryl made landfall.

Beryl is now a tropical depression, working its way up the Great Plains and the Midwest, bringing along with it heavy rains and strong winds. Power generators may be off the hook in Texas, but the situation there does not bode well for our ability to get electricity to households and businesses reliably in a world of stronger storms.

“For a Category 1 hurricane to result in over a million customer outages in its immediate aftermath demonstrates that there is plenty of need for the resiliency hardening investments,” Wei Du, a consultant at PA Consulting Group and former Con Edison analyst, told me.