Feds say storm-related supply disruptions have dropped as production shifts inland

Storms that reach Category 5, like Hurricane Ivan, can cause major damage to offshore platforms. (Image: NOAA)

Chalk up another cultural shift to the shale revolution.

The Energy Information Administration reported Friday that storm-related disruptions to oil and natural gas production in the Gulf of Mexico and along the Gulf Coast have declined as more production has moved inland.

Hurricane season starts Saturday, and energy companies working in the Gulf are fine-tuning their emergency plans for the season.

The National Oceanic and Atmospheric Administration and other forecasting agencies have predicted this year will be especially active; NOAA predicts between seven and 11 hurricanes, with three to six becoming major hurricanes.

But the Energy Information Administration said storms have become less of an issue as production in the Gulf provides a smaller percentage of the national supply.

Just 6 percent of the nation’s natural gas supply was produced in the Gulf of Mexico in 2012, according to the agency, compared with 26 percent in 1997.

The Gulf’s share of crude oil production has dropped, as well, from 26 percent in 2007 to 19 percent in 2012.

Inland areas can be affected by storms, too.

Hurricane Isaac last August caused several refineries along the Gulf Coast to be shut down for days, and forced Valero to cut back capacity at a refinery in Tennessee after a pipeline from the Gulf was shut down.

Isaac was blamed for resulting gasoline price spikes.

In all, Isaac was responsible for production shut-ins of 1.3 million barrels a day of crude oil and 3 billion cubic feet per day of natural gas, according to the Energy Information Administration, along with 0.9 million barrels per day of refining capacity.

No storms required production to be shuttered from 2009 to 2011, but both Hurricane Gustav and Hurricane Ike in 2008 caused extensive damage and led to 1.1 million barrels per day of shut-in crude oil production and 5.5 billion cubic feet per day in natural gas production, according to the agency.

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