A harsh safety lesson from Hurricane Harvey

 By Chris Dalby

So far, the impact of natural disasters on energy installations has focused largely on nuclear power plants, following Fukushima in 2011. However, repeated floods and hurricanes wreaking havoc on oil and gas infrastructure along the southern U.S. have not been heeded…

(Cover pic by Adrees Latif/Reuters)

Hurricane Harvey, the largest rain-related disaster ever seen in the continental U.S., affected fully one-third of refineries in the country. On Aug. 28, 10 refineries had been shut down across Texas, for a combined daily capacity of 2.2 million barrels.
The impact at the pump was immediate, sending prices nationwide up by at least 13.5 percent, reaching a two-year high. The Department of Energy even authorized the release of millions of barrels from the Strategic Petroleum Reserve (SPR) to back up beleaguered refineries. At a time when the U.S. is the biggest exporter of crude in the world, such a state of affairs is alarming.
The main concern here is not how to minimize the impact on consumers but how to better protect the energy infrastructure America is so dependent on in the first place. While Hurricane Harvey was an extremely powerful event, it was by no means unpredictable. So what defenses do refineries have to mitigate the impact of such storms?
The concentration of refineries, pipelines, oilfields, rigs, tankers and more in the Texas area make this a matter of national priority.
The modernization of refineries, pipelines and storage tanks is a crucial first step, to allow oil to flow, even if new production is temporarily halted. The damage to Corpus Christi and Beaumont left oil to sit in storage tanks, unable to be accessed. Advances have been made in this area in recent years, as evidenced by the Colonial pipeline network. But although Colonial operated a few days longer, it saw a dramatically reduced flow of oil due to refinery shutdowns before finally having to cut off pipelines itself.
However, new pipelines may not be as important as new refineries themselves. Incredibly, only one new refinery has been built in the U.S. since 1977. This statistic seems improbable, given how much of a gas-guzzling nation the U.S. is, but the answer has been to increase production at old facilities, instead of investing in new ones. That 1977 rookie in Garyville, Louisiana, has seen its own production capacity more than double in 40 years from 200,000 bpd to 543,000.
This fact is particularly surprising against the backdrop of the U.S.’ evolution as an oil consumer. With imports down 25 percent over the last decade and exports having reached over 1 million bpd, the fact that the number of refineries has remained static is cause for concern.

Refinery damaged after Hurricane Harvey (Valero Oil Refinery)

The second step would be the mandatory implementation of all American Petroleum Institute (API) recommendations. The body currently has updated recommended practices on stress testing, foundation design, geotechnical concerns and structural integrity. Harvey must make oil regulators and operators alike realize that security spending is always an investment, never a cost. It could be said this realization should have come earlier. In 2005, hurricanes Katrina and Rita knocked out a series of facilities in Texas and Louisiana, yet it appears the right preventive measures were not learned. Engineering consultancy Turner, Mason & Company writes that refiners along the Texas and Louisiana Gulf coasts continue to “ride the storm out.”
Katrina and Rita locked away 23 percent of U.S. refining capacity, with gross input returning to its prior levels, only nine months after the passage of Katrina.
Turner, Mason & Company listed the damage that was seen immediately by Harvey, which refineries should prepare for, ahead of time, especially with climatologists predicting worse hurricane seasons to come. The consultancy recommends that refineries prepare for the following:
1. “submerged electrical equipment” which will require an “off-site, dry-off process that can take up to a week.”
2. “seawater damage from a storm surge and the conductive residue it leaves behind,” which can damage or ruin motors and other equipment.
3. “water damaged refractory and insulation” that will take a long time to dry out.
4. the “simple clean-up of debris.”

A flooded petrol station (Michael B Thomas, Getty Images)

Now, these may seem to be common sense moves but they are reactive, not proactive. Other, larger steps need to be taken to ensure that the oil refinery system can not only resist hurricanes but that any impact on productivity can be minimized.
To do so requires a top-down strategy, coordinating public and private sector planning. The immediate priority appears to be diversity. Ellen R. Wald, writing in The Hill, says that “U.S. refineries run essentially at capacity most of the time. This means that if one refinery — or several refineries — goes out unexpectedly, other refineries cannot ramp up production to compensate for the loss of refined petroleum products.”
This shows how new refineries are sorely needed, not only to ramp up production, but to provide spare capacity, in case of natural disasters. This would also allow better capacity for specific refined products as well as updating refineries to handle the various types of crude oil being imported around the world.
This type of cross-sector planning has led to a strong idea being pitched: joint public-private stockpiles. This research found that changes to the geography of oil infrastructure as well as the concentration of capacity along the Gulf Coast had made access to the Strategic Petroleum Reserve (SPR) difficult for refineries located far inland. In order to avoid such problems caused by public sector responses to private sector development, the suggestion is to involve the private sector to a greater extent in the SPR. This would allow private refineries across the country to act as suppliers when the need arises, helping to supplement government stocks. This would also help reduce concerns about a dwindling supply in the SPR at a time when the U.S. is importing less and less oil.
When the U.S. was largely reliant on oil imports, it made sense for the government to maintain strict control on the market, given how relations with other powers influenced their willingness to trade. Now, as a growing exporter, involving the private sector in industry decisions to a greater degree can allow both sides to come up with a coordinated strategy on avoiding such a knockout blow from the next Harvey.

READ MORE: In the eye of the storm by Michelle Leslie

about the author
Chris Dalby
Journalist. Editor. China, Mexico, Latin America, Asia, place branding, Olympics, oil and gas, mining, renewable energy, international politics.