INSIGHT: After Beryl, US chems may see 11 more hurricanes

HOUSTON (ICIS)–The conditions that helped make Beryl become a hurricane before hitting Texas chemical plants will persist through the rest of the season, with meteorologists forecasting 11 more forming in the Atlantic basin.

• Conditions are already conducive for hurricanes even though the peak of the season does not happen until the late summer.
• Beryl still disrupted chemical operations even though it was a relatively weak hurricane when it made landfall in Texas.
• The next hurricane could disrupt global chemical markets if it damages terminals and ports on the Gulf Coast.

BERYL’S KNOCKS OUT POWER
Even though Beryl was a Category 1 hurricane – the weakest class – it still caused more than 2 million outages in Texas.

Many of the disruptions that Beryl caused to the chemical industry were because of power outages. A roughly equal number of disruptions was caused by companies shutting down operations as a precaution. Other disruptions were attributed to bad weather.

PORT DISRUPTIONS
Beryl’s other major effect was on ports.

The ports of Corpus Christi, Freeport, Texas City and Houston had shut down.

Beryl caused Freeport LNG Development to shut down its operations.

CONDITIONS THAT MADE BERYL SO POWERFUL WILL PERSIST
Beryl illustrates the destructive potential of a weak Category 1 hurricane that travels through parts of Texas that host critical powerlines and ports.

The meteorology firm AccuWeather estimates that total damage and economic loss caused by Beryl was $28-32 billion.

Beryl was remarkable because, prior to making landfall in Texas, it had become a Category 5 hurricane, the most powerful class under the Saffir-Simpson scale.

It was the first time that such a powerful hurricane had formed so early in the year, something that US meteorologist attributed to exceptionally warm ocean temperatures. The surface temperatures at sea are already close to what is typical during the mid-September, the peak hurricane season, according to the National Oceanic and Atmospheric Administration (NOAA).

After Beryl made landfall in Mexico’s Yucatan peninsula, it weakened into a tropical storm before passing over more warm water in the Gulf of Mexico.

There it strengthened rapidly and became a hurricane once more before hitting Texas.

The warm waters that contributed to Beryl’s strength will persist and should soon be joined by La Nina, a weather phenomenon that also makes hurricanes more likely.

METEOROLOGISTS RAISE HURRICANE FORECAST
Earlier this week, the hurricane forecast for this year was raised by meteorologists at Colorado State University’s Tropical Weather & Climate Research.

The following compares the center’s latest hurricane forecast to its update in June and to the average for the years 1991-2020.

	July	June	Average
Named Storms	25	23	14.4
Named Storm Days	120	115	69.4
Hurricanes	12	11	7.2
Hurricane Days	50	45	27.0
Major Hurricanes	6	5	3.2
Major Hurricane Days	16	13	7.4

Source: Colorado State University

Like NOAA, Colorado State University (CSU) noted that extremely warm sea surface temperatures and a possible La Nina are making it more likely for hurricanes to form and strengthen.

THE NEXT HURRICANE COULD CAUSE MORE DAMAGE
The next hurricane can prove to be a bigger logistical headache for railroad companies. Beryl had caused only brief disruptions at BNSF and Union Pacific (UP).

Beryl’s path did not threaten US oil and gas production in the Gulf of Mexico. The next storm could threaten those wells, causing several energy producers to shut in production.

Damage to Gulf Coast oil, ethane, LPG and LNG terminals could disrupt energy markets if the outages last long enough.

Texas and the neighboring state of Louisiana are home to most of the nation’s LNG export capacity. Prolonged outages at LNG terminals could lead to an oversupply of natural gas in the US because producers could lose an outlet to ship out excess capacity.

Prices for natural gas could consequently fall. Prices for ethane tend to follow those for natural gas, so they would also fall in the event of a supply glut.

Texas ships ethane and liquefied petroleum gas (LPG) to crackers all over the world. If the next hurricane damages those terminals and leads to a prolonged shutdown, it could have global repercussions by interrupting shipments of feedstock to crackers.

In the US, it could cause prices for those products to plummet, especially for propane. US midstream companies are already trying to ship out as much LPG as possible because production has been so prolific.

Over the years, US producers have exported increasing amounts of polyethylene (PE) and polyvinyl chloride (PVC).

If the next hurricane damages those plants, then it would have a direct effect on global petrochemical markets.

Insight by Al Greenwood

Thumbnail shows a distribution transformer of a power line knocked down by Beryl. Image by Reginald Mathalone/NurPhoto/Shutterstock