Hurricane Harvey has slowly revealed itself to be the worst natural disaster in American history. The toll in human life is already tragic, and its scope is still unknown as of the writing of this post. The destruction of property, and energy infrastructure like propane, natural gas and oil pipelines will have enormous implications for years to come. Our hearts break, and our prayers go out all the people of Texas impacted by this unfolding tragedy.
Tankfarm is taking a look at this disaster through the prism of propane, because that is what we do, but also because it is instructive in a discussion of how an event of this scale can fundamentally change the dialogue on energy, infrastructure, and how nature is in many ways the most powerful force in our lives (no matter how much we try to ignore it).
Houston and its environs is without a question, the epicenter of the American energy economy. Whether it is crude oil from South Dakota, natural gas from Pennsylvania, or propane from Arkansas- chances are most of it will eventually make its way to the refineries, the pipelines and the storage facilities of the Gulf region.
Much will be made in the media of the refineries in the region, and how the shutdowns will impact gasoline prices. But the flooding in Houston has also shut down the Colonial Pipeline, which provides a huge amount of the heating oil that keeps the Northeast warm in the winter. It will also shut down the LPG and LNG export facilities that have made the United States a nascent global energy power, and reduced the influence of OPEC and Russia.
Energy markets are reacting to the news as we write. There seems to be little question that at the very least, in the short to medium term, refined products like gasoline, heating oil, diesel, and propane will see increases in price that will ripple through this heating season. Higher prices for propane is a likely outcome.
But this event is so huge, and so devastating it is bound to open up a much wider discussion of how we use energy to begin with. Whether you believe in climate change or not, the events in Texas are sure to make more people wonder whether or not three 500 year storms (Katrina, Sandy, Harvey) in such a short period indicates something needs to change- and soon.
Companies like Tesla and others continue to push the price of batteries down, and make renewable energy more viable every day. Their case becomes stronger in the face of such utter destruction. So the impact of Harvey in the short term may be higher prices, but we think its real impact in the long term could be greater reduction in our reliance on hydrocarbons.
Food for thought, but in the meantime, the people of Houston and the Gulf region continue to fight just to survive. To do your part, consider giving to one of the following worthy charities working to alleviate suffering:
