Hurricane Georges roared through a deserted eastern Gulf of Mexico today, the fifth of what has been an alphabet soup of named storms to hit in four of the last five weeks, once again sending producers scurrying for shore, shutting in production or putting wells on automatic pilot.

Hurricane Georges, following on Tropical Storm Charley, Hurricane Earl, and tropical storms Frances and Hermine, could be the worst blast Mother Nature delivers this season. Strengthening Georges continued along a path Friday that was expected put him directly over the active production platforms in Mobile Bay, AL, by this morning.

Producers were scrambling off platforms and shutting in production on Friday. More than 1 Bcf/d was curtailed by presstime, according to the Gulf Coast pipeline companies, but much more was expected to be shut in over the weekend.

So far the Gulf storms this season have been relatively weak, inflicting little lasting damage, and production curtailments have been measured in hours, as crews waited for the storm to blow by before returning to offshore platforms. But Georges has shown signs of greater intensity.

With 105 mph winds Friday it was rated a category two storm (the second lowest, winds 96-110 mph) and was expected to strengthen as it made its way across the open waters of the Gulf. Georges is on a track similar – though slightly farther south – to that of 1992’s Hurricane Andrew, which was a category five (catastrophic) in the Atlantic but weakened as it leveled a swath across Florida and then blew up again to a category four when it went into the Gulf Aug. 24, 1992.

Andrew shut in the entire Gulf – over 13 Bcf/d – damaging 241 offshore platforms – 20 of them vanished entirely – pipelines and other Gulf facilities before it went ashore in Louisiana Aug. 26. More than 1 Bcf/d was lost for at least a month, and some production from older platforms that literally disintegrated and pipelines scoured off the seabed was never brought back. It took weeks for the full extent of the damage to be calculated and the impact felt. The lead story in the Sept. 28, 1992 issue of NGI was headlined “Natural Gas Prices Hit Ten-Year Highs” ($2.60 to $2.79/MMBtu).

No one is saying Georges will be anything close to another Andrew, but with 105-plus mph winds Georges could pack quite a punch on eastern Gulf platforms.

One major difference in the gas market aftermath of a potentially major storm today versus Andrew in 1992 is that currently storage is just about full, while the 1992 storm disrupted storage fill and sent the market into the winter on the short end.

Meanwhile there are more than two months left in the hurricane season. At this moment three more hurricanes, Ivan and Jeanne, and Karl, are growing in intensity right behind Georges. They pose little or no threat to the U.S., however. Friday morning, Ivan was located about 760 miles west-southwest of the Azores Islands heading north into the central Atlantic, Jeanne was about 900 miles west of the Cape Verde Islands heading northwest into the central Atlantic, and Karl, the confused one, was located about 1,570 miles southwest of the Azores heading east toward Africa.

With 11 named storms and seven hurricanes (three intense, i.e. category 3-5) in the Atlantic region already this year and two months left in the hurricane season, the number of named storms and hurricanes already has surpassed forecasts of National Oceanic and Atmospheric Administration and hurricane forecaster Dr. William Gray of Colorado State University, who has shown well above-average accuracy in forecasting hurricanes over the past 14 years. Both NOAA and Gray predicted 10 named storms (the 98-year average is 9.3 named Atlantic storms per year), six hurricanes and two intense hurricanes this year. Gray also forecast the Gulf was 14% more likely to be visited by an intense hurricane and 16% more likely to be hit by a lower-level hurricane this year than the average likelihood over the past 98 years (see NGI, Aug. 24).

The Gulf has escaped lasting damage so far this year, but the costs of evacuation and curtailment undoubtedly will be high. Charley’s impact was minimal, but Earl, Frances and Hermine packed wallops. Earl caused at least 10 Bcf/d and 813,843 b/d of Gulf-wide gas and oil production curtailments at its peak Sept. 1-2, according to an incomplete tally by the Interior Department’s Minerals Management Service. The MMS said production companies reported 361 platforms and 69 rigs were evacuated because of Earl, which originated in the southwestern Gulf and blazed a path north-northeast through Central Gulf, the Eastern Gulf and made landfall on the Florida Panhandle.

Tropical Storm Frances, which popped up in the Western Gulf and made landfall near Corpus Christi, triggered evacuations of 132 platforms and 23 rigs and forced about 3 Bcf/d and 100,000 b/d of gas and oil production curtailments Sept. 10. Hermine, which originated in the Central Gulf and ended up hitting the beaches of Louisiana, forced evacuations of 131 platforms and 23 rigs and caused 1.3 Bcf/d and 90,000 b/d of production shut-ins at her peak.

The amount of curtailed gas production, even though the shut ins were brief, has had a lasting impact on the market. Last week, Southern Louisiana spot prices averaged about $2.20, which was 64 cents more than the September bidweek average. East and South Texas prices are up 60 cents from September bidweek. Even the national interstate average is up 55 cents from bidweek levels.

There is some hope after Georges the Gulf could breath a sigh of relief. Historically the most active part of the hurricane season ends in mid-September. But clearly the hurricane season will be remembered this fall and possibly throughout the winter because it has prompted a sudden, early rise in the spot market in the waning days of the storage injection season.

Rocco Canonica

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