Hurricane Season Packs 1-2, 3, 4, 5 Punch
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
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
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.
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