
Hurricane Francine Disrupts Louisiana Energy Hubs and Crop Exports, Reports Reuters
By Marianna Parraga, Erwin Seba, and Tom Polansek
HOUSTON/CHICAGO – Energy production and agricultural exports in the U.S. Gulf of Mexico faced disruptions on Wednesday as oil refineries in Louisiana reduced operations in anticipation of Hurricane Francine’s approach.
Port Fourchon in Louisiana, a key hub for marine and equipment suppliers to offshore oil producers, was closed to vessel traffic, as was the Louisiana Offshore Oil Port, the sole deepwater port in the U.S. capable of accommodating very large crude carriers for oil imports and exports.
The U.S. Coast Guard reported closures at several other ports including New Orleans, Plaquemines, Cameron, Lake Charles, and Houma, which halted shipments of fuel, soybeans, and grains destined for export. Agriculture officials warned that the heavy rains from the storm could pose a risk to the region’s cotton crop.
In eastern Louisiana, six refineries, primarily those around New Orleans, were running with minimal staff to navigate the storm’s impact. For instance, Exxon Mobil’s Baton Rouge refinery scaled back production to just 20% of its capacity of 522,500 barrels per day in preparation for the hurricane.
Oil prices surged by over 2% on Wednesday amid worries about potential extended production shutdowns in the offshore oil sector as Francine approached. Nearly 39% of oil production and almost half of the natural gas output in the U.S. Gulf of Mexico was offline, with 171 production platforms and three rigs evacuated.
The shutdowns resulted in a loss of roughly 675,000 barrels per day of oil and 907 million cubic feet per day of natural gas from offshore operations. The Gulf typically accounts for about 15% of U.S. oil production and 2% of natural gas output. Analysts suggested that production could remain affected for up to two weeks, depending on the storm’s impact upon landfall.
Hurricane Francine, having strengthened into a Category 2 storm, was nearing southern Louisiana on Wednesday afternoon, bringing sustained winds of up to 100 mph. The storm’s center is forecasted to pass over Mississippi on Thursday, expected to deliver heavy rainfall and the potential for significant flooding across southeastern Louisiana, Mississippi, southern Alabama, and northern Florida.
In light of the storm, Louisiana Governor Jeff Landry and President Joe Biden declared a state of emergency for the state.
Fortunately, the hurricane path appears to spare liquefied natural gas plants recently developed along the Gulf Coast, as the storm is tracking further east of those facilities.
TEXAS RELIEVED
As Francine approached Louisiana, some Texas ports that had shut down operations earlier in the week, including Brownsville and Orange, began assessments to prepare for reopening. Other ports, such as Houston, Freeport, Beaumont, Port Arthur, and Sabine, lifted navigation restrictions, according to the Coast Guard.
Francine’s impact has disrupted agricultural shipments to the Mississippi Gulf region, which is responsible for about 55% of U.S. soybean exports. Mike Steenhoek, executive director of the Soy Transportation Coalition, noted that barge companies are hesitant to divert their barges into affected areas until the storm has passed.
The overall impact of the hurricane on agriculture will rely on its intensity, with hopes for minimal disruptions and damage. Traders are also attentive to the potential for precipitation from Francine, which could benefit the Mississippi River as low water levels have hindered grain transportation.
Farmers in the central Gulf Coast and Mississippi Delta regions are preparing for the hurricane by harvesting crops like rice and soybeans where feasible, according to a report from the U.S. Department of Agriculture. However, much of the cotton crop is at risk, with the bolls opening and vulnerable to storm-related damage.