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Hurricane Ida lashed Louisiana, left New Orleans without power and put nearly 95% of the region’s oil and gas production offline.
Ida, now categorized as a tropical storm, made landfall exactly 16 years after Hurricane Katrina, which set off a humanitarian calamity in New Orleans and beyond in 2005.
With the full extent of Hurricane Ida’s damage still coming into view on Monday, there is at least some respite in the bad news: The impact on gasoline supply and costs could be “modest” — that is, relative to other massive storms like Hurricane Katrina in 2005 and Hurricane Harvey in 2017.
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‘Unlike Katrina or Harvey, it looks like the damage, while it can be severe, is only limited to a few refineries.’
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Drivers in the southeast and mid-Atlantic markets, however, may see a five- to 10-cent gallon increase, according to Andrew Lipow, president of Lipow Oil Associates, a Houston, Texas-based energy industry consulting firm.
“Unlike Katrina or Harvey, it looks like the damage, while it can be severe, is only limited to a few refineries,” Lipow said.
To put that in context: National gas price averages jumped approximately 45 cents in the days after Hurricane Katrina and increased 32 cents in the days following Hurricane Harvey, according to AAA data.
Others, however, predict Hurricane Ida’s end cost to drivers could be a price spike. In a worst-case scenario, Mark Zandi, chief economist at Moody’s Analytics, said there could be an increase of 10 cents to 20 cents per gallon.
“It’s too early to tell. The recovery is only just beginning,” Lipow added. Still, initial indications suggest the damage and disruption is “modest” in comparison to Hurricane Katrina and Hurricane Harvey, he added.
Damaged refineries account for 9% of the country’s refining capacity
Lipow said six refineries impacted by Ida are clustered near New Orleans and the lower Mississippi River, and they account for 9% of the country’s refining capacity. Badly damaged refineries may need up to two months before they can get back in operation, he said.
Across the country, drivers are now paying $3.15 on average for a gallon of gas, according to AAA. Meanwhile, Louisiana’s average gas price was $2.83 on Monday, up two cents from Friday, AAA data showed.
The national average is down a penny from a month ago, but AAA spokeswoman Jeanette McGee said prices might increase three to five cents per gallon in the storm’s aftermath.
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‘We can expect gas prices to fluctuate this week.’
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That’s just ahead of the Labor Day weekend. “We can expect gas prices to fluctuate this week. There’s no question there,” she said.
Any increase will depend on the time it takes for the East Coast’s major fuel artery to resume operations on two lines, McGee said.
Colonial Pipeline on Sunday said it was temporarily turning off two lines from Houston, Texas to Greensboro, N.C. “as a precautionary and routine safety measure.”
Colonial Pipeline temporarily shut down operations earlier this year in the face of a ransomware attack.
On Monday afternoon, Colonial Pipeline said it expected to get the two lines back in service by Monday evening, pending safety checks and restart procedures.
“We know the fuels delivered by our pipeline are important to emergency responders, as well as to our daily lives,” Wes Dunbar, vice president of operations for Colonial Pipeline, said in a statement. “We are thankful for the coordination from our local, state and federal partners for their assistance as we work to restore our pipeline into service.”
