Here’s our first estimate of the damage. I suspect these are very preliminary.
The Texas Department of Public Safety said 48,700 homes in the area have sustained flood damage, including 17,000 with major damage and 1,000 that were destroyed.
The state estimated that 700 businesses had been damaged.
(Source)
This gives us a sense of the scale.
Not nearly as many as Katrina.
Aug 26, 2016 - Housing damage. Katrina damaged more than a million housing units in the Gulf Coast region. About half of these damaged units were located in Louisiana.In New Orleans alone, 134,000 housing units — 70% of all occupied units — suffered damage from Hurricane Katrina and the subsequent flooding.
(Source)
Of course, economically speaking, homes in Houston are probably a lot more expensive than those in NO, so...we'll just have to wait and see still.
Hey Chris, heard you on the Kerry Lutz network. Nice interview, always good when you are on
In case you did not already know it, the host is a climate denier over there. He wrote this to me:
So you’re obviously right and all the climategate emails, the recent official from the EPA who admitted he was forced to lie about the stats, the hockey stick fraud as exposed in climategate emails, the medieval warming period, the mini-iceage, etc., all a reflection of exact science. I’m beginning to understand now. What about the fact that other planets have heated and don’t have people warming things up, at least not that we know of?
What about the fact that we’re now facing a cooling period, which of course is man induced? But if memory serves me correct, we used to call it Global Warming, oops, now it’s climate change.
I bring opposing voices, that doesn’t make me anti-science. In fact you need to take a look in the mirror and see anti-science staring you back in the face. At best there is a consensus, backed up by government force and intimidation. But science doesn’t work by consensus. In fact the great advances in science come when the consensus is proven wrong as it has been so many times before.
I won’t be so bold to claim that man has no effect upon climate, not provable now, only that things like volcanoes, heating of the oceans by vents on the floor and the activity of the sun, especially sun spot cycles, have much more to do with it than release of co2 gas by man.
Based on that logic, you obviously believe that cow farts are a major contributor to climate change. Why would we be having cold winters and major rain in California that was never supposed to happen?
I know it's difficult challenging people like this, but AGW is the elephant in the room. Unleash yourself, Chris, and don't hide what you know to be true.
American energy supplies have suffered another blow from Tropical Storm Harvey.
The Colonial Pipeline, which carries huge amounts of gasoline and other fuel between Houston and the East Coast, is shutting down after Harvey forced the closure of refineries and some of the pipeline's own facilities.
The pipeline has two main lines that together transport more than 100 million gallons of gasoline, heating oil and aviation fuel as far as the New York harbor each day.
Its operator said the line that carries mainly diesel and aviation fuels will stop running Wednesday evening, and the line for gasoline, which is already operating at a reduced rate, will be suspended Thursday.
A co-worker tells me that a public service announcement to Houston residents included that advice that driving out of Houston right now is impossible as roads are flooded. Anyone still there is there for the duration.
They further advised that anyone who insisted on driving out now first write their name and SSN on the inside of their left forearm with indelible marker before starting the trip. This would help clean up crews identify the bodies trapped in cars…
Yikes!!
American energy supplies have suffered another blow from Tropical Storm Harvey.
The Colonial Pipeline, which carries huge amounts of gasoline and other fuel between Houston and the East Coast, is shutting down after Harvey forced the closure of refineries and some of the pipeline's own facilities.
The pipeline has two main lines that together transport more than 100 million gallons of gasoline, heating oil and aviation fuel as far as the New York harbor each day.
Its operator said the line that carries mainly diesel and aviation fuels will stop running Wednesday evening, and the line for gasoline, which is already operating at a reduced rate, will be suspended Thursday.
Every day this remains shut in 100 million gallons of fuel does not reach the east coast. The article tries to soften the impact by quoting someone who says that there are other means - trucks, trains & barges - for moving fuel but...let's be real.
The reason that the pipeline isn't flowing? The product isn't being made.
So.....what are those trucks, barges and trains going to be filled with?
Next, just how many trucks, barges and train cars is 100 million gallons? At roughly 10,000 gallons for a fuel truck, that would be 10,000 truckloads...daily. That's quite a convoy.
But, again, that only applies if there's fuel to put in those trucks.
Today I'll be interviewing Jeffrey Brown, creator of the land export model for oil exports, because I think that same model is useful for understanding the stocks and flows of the gasoline/diesel distribution system. Plus he knows a lot about the petroleum industry in general.
Let's be clear...the scale of Harvey is enormous...roughly 135 miles of coastline strewn with petrochemical plants and refineries has been swamped. My prediction is that over the next week awareness of just how critical that blow was will be appreciated by more and more people.
In the meantime, if you live on the east cost, fill 'er up! (and maybe store a little too).
Already there are local shortages, probably related directly to local distribution issues more than a general refining and supply issue, but this provides a clue as to what the future may hold elsewhere.
QuikTrip, which operates 135 stores in North Texas, plans to stop selling gasoline at roughly half its stores this weekend, spokesman Mike Thornbrugh said.
Summary:
Day 1: Everything is fine
Day 2: Everything is not fine
Something these people in Houston discovered upon finding rationed store hours and limited goods even in stores that had not flooded:
Katy Mitchell, 43, said that while her neighborhood had not flooded, the storm kept her from leaving her house before Tuesday. She waited in line to try to pick up some staples. “I am hoping to get some coffee, some half and half,” she said. “My husband wants vanilla ice cream, and hopefully some dinner food.”
Mitchell told HuffPost she’d heard of a few other grocery stores that had opened for limited hours. But another woman interjected that the other stores were pretty picked over, too, and had long lines.
Elaine Loebe, 57, said she’d tried another store on Tuesday, to no avail. “I got there and they were kicking people out,” said Loebe.
“People don’t grasp the severity of it,” she continued. “We’re so used to in America, especially Texas, to have everything readily available. Like if it’s 2 in the morning and, ‘Oh my God, I need something,’ you go get it.”
(Source)
People are shocked when they want "normal" and discover that normal isn't on offer at present.
As always, my instinct is to watch prices. Here’s what Hurricane Harvey looks like through the lens of the gasoline futures contract - RBOB - which is deliverable in New York Harbor. I’m guessing prices will anticipate any shortages that might appear (in New York!) - what with big money being very well connected - but then again… http://www.cmegroup.com/rulebook/NYMEX/1a/191.pdf
As always, my instinct is to watch prices. Here's what Hurricane Harvey looks like through the lens of the gasoline futures contract - RBOB - which is deliverable in New York Harbor. I'm guessing prices will anticipate any shortages that might appear (in New York!) - what with big money being very well connected - but then again...
http://www.cmegroup.com/rulebook/NYMEX/1a/191.pdf
Dave,
I think we should be looking at the front month, which is September. That's where any anticipated shortages would show up. The downstream expectation most are holding is that these disruptions never last more than a month.
This is what we're seeing now. The Oct contract is trading at $1.68.
But September is over $2. So the market is already signaling where the trouble lies and for how long.
We should be looking at the Oct contract for early clues that this disaster might have more legs...if it really begins to spike, then we should be anticipating something larger in terms of disruptions.
The crack spread is also widening here and that means large profits for functioning refineries. So track the prices of those companies for a tradable idea.
Putting on my "they are fiddling with all prices because they think that's their job" hat I'm wondering if the NYFed trading desk in Aurora is busy selling gasoline contracts to try and keep the prices down? If so, we'll get to discover what happens when a real and necessary commodity isn't rationed by market prices, but by Fed prices.
Prediction: disastrous shortages.
We had a contract roll a week ago, so the “front month” (by volume - that’s how “continuous contract rolls” are done) is actually V7. But today, U7 (September) is more representative even though the trading volume is lower, since deliveries will occur shortly: settlement for U7 is today, delivery occurs from Sep-9 thru Sep-28. http://www.cmegroup.com/trading/energy/refined-products/rbob-gasoline_product_calendar_futures.html
Wow. Looking at my trading app at today’s prices…I see RBU7 up 7.5% - 14 cents - today alone.
RBOB is the price of unleaded gas delivered to NY Harbor.
Fun fact #1: US has about 24 days of gasoline at nomal consumption rates.
Fun fact #2: Houston refineries taken offline total about 12% of total US refinery capacity.
Fun fact #3: it takes 10 days travel time to get from Rotterdam to NYC at 14 kts, which is supposedly the speed of a tanker. I’m sure the collection of old sea dogs at the site will weigh in about clearing port and load/unload times… https://sea-distances.org/
I don’t have the kind of knowledge of this market to enter the convo at the level Dave and Chris are operating, but what I DO know is I told my wife to stop off at our local gas station in Maryland to fill her tank. The price was $2.30 at the pump at around 4pm. She took my kids out to soccer and filled my car up at 7:30, when the price was $2.53. That’s .23 cents inside of three hours.
That’s all I need to know.
Of course the psychological impact of rapid price increases may cause people to begin “stocking up,” which in turn hastens the arrival of shortages because it places an extra drain on supplies at the very moment that inventories can not be easily replenished. People here aren’t panicking yet, but I’ve noticed some nervousness on my Facebook feed beginning to emerge.
Interesting times indeed. We may, finally, have our true black swan landing.
Pennies from heaven
It’s raining (petrochemical) men
We place half the nation’s oil refining capacity in a spot now damaged by oceans warmed by all that oil refining capacity
If you had any worries before about effective US leadership, you should now be positively terrified.
In a letter to President Trump on Wednesday, Sen. Edward Markey (D-Mass.) said the Energy Department should release oil from the Strategic Petroleum Reserve (SPR) “to help consumers and mitigate upward pressure on refined product markets.”
“An immediate release of gasoline or crude oil, if also warranted, from the SPR would help protect consumers from price spikes at the pump and tame any market speculation that could be unduly affecting markets and harming consumers,” Markey wrote.
(Source - the hill)
Ummmmm....there's no gasoline in the SPR.
It doesn't store well. That's why there's none there. A US Senator should absolutely know this...but especially one that sits on these committees:
We should be looking at the Oct contract for early clues that this disaster might have more legs...if it really begins to spike, then we should be anticipating something larger in terms of disruptions.
The crack spread is also widening here and that means large profits for functioning refineries. So track the prices of those companies for a tradable idea.
Putting on my "they are fiddling with all prices because they think that's their job" hat I'm wondering if the NYFed trading desk in Aurora is busy selling gasoline contracts to try and keep the prices down? If so, we'll get to discover what happens when a real and necessary commodity isn't rationed by market prices, but by Fed prices.
Prediction: disastrous shortages.
