Several refineries shut down production as Hurricane Harvey barrels its way toward the Texas Gulf Coast, which makes up nearly half of U.S. refining capacity. Fred Katayama reports.
As Hurricane Harvey barrels its way toward the Texas coast, energy companies are shutting production and evacuating workers. Four refineries in Corpus Christi and Three Rivers were closing ahead of the monstrous storm. The government said nearly 15 percent of natural gas production was halted, and almost 10 percent of crude output capacity has been shut. The Gulf Coast accounts for nearly half of the country's refining capacity. Almost a fifth of U.S. crude is produced offshore. Bernadette Johnson is vice president of market intelligence at energy analytics firm, Drillinginfo. SOUNDBITE: BERNADETTE JOHNSON, VICE PRESIDENT OF MARKET INTELLIGENCE, DRILLINGINFO, (ENGLISH) SAYING: "There are 18 refineries in basically the flood path, not directly the storm path but that could be impacted by floods. And those 18 refineries represent a lot of capacity for the U.S. We have some gasoline, diesel in storage, but if any of that infrastructure is permanently damaged or damaged long term, then there's certainly a risk that you could see higher gasoline prices, higher diesel prices, some bottlenecks in that supply chain." Harvey is potentially the biggest hurricane to hit the U.S. mainland in more than a decade. The category 2 storm packing winds of 105 miles an hour could intensify and dump up to 35 inches of rain over parts of Texas. Flood warnings are also in effect for Louisiana and northern Mexico. Crude prices rose Friday, and benchmark gasoline prices spiked to their highest level since mid-April. Harvey could also flood shale oil fields in southern Texas. EOG Resources cut back drilling and shut down some production. Exxon Mobil and other oil and natural gas producers have evacuated staff from offshore platforms in the storm's path,