Amidst stories of Hurricane Harvey’s wanton destruction — homes flooded, residents displaced, 30 reported dead, countless others missing — it’s easy to forget that storms like this threaten not just the people of the Gulf Coast, but people all across the country who depend on the region’s industries.
Natural gas is one such industry, and although the long-term effects of the storm remain to be seen, the sector is already showing signs of distress.
“Natural gas prices gained on Monday as damage from Tropical Storm Harvey is seen halting production and pipeline operations,” the Wall Street Journal reports.
“Futures settled up 3.3 cents, or 1.1%, to $2.925 a million British thermal units on the New York Mercantile Exchange.
“Harvey made landfall on the Texas coast Friday evening as a Category 4 hurricane, but was downgraded to a tropical storm. The damage from the hurricane, along with subsequent raining and flooding, threatens to disrupt natural gas production in the Eagle Ford shale basin and Gulf of Mexico.”
The situation speaks to the inherent volatility of America’s natural gas supply. While it’s true that much of the country’s oil also comes from Texas, heating oil is stored independently by a network of thousands of small businesses, as well as by homeowners themselves. Natural gas, on the other hand, is not.
When natural gas production is threatened or halted by a major storm, the supply chain is interrupted and prices rise. When oil production is threatened, homeowners can rest assured that the fuel already sitting in their storage tanks is secure. Additionally, the Department of Energy maintains a one million barrel supply in the Northeast Home Heating Oil Reserve, in case of extreme emergency.
Peace of mind and a secure supply: just two more benefits heating oil can offer, but natural gas cannot.
Click here to read the Wall Street Journal article.