Hurricane season is off to an early start this year. On July 2nd, Hurricane Beryl became the earliest Category 5 hurricane in the Atlantic on record according to the National Hurricane Center.
Hurricane Beryl tore through the Caribbean and made landfall. Over the Gulf Coast of Texas as a Category 1 Hurricane. Power was cut to nearly 2.8 million customers from San Antonio Bay to the Louisiana state line for several days.
More recently, Hurricane Debbie has made landfall as a Category 1 hurricane in Florida on August 5th.
Debbie brought along 80 mph winds and up to 20 inches of rain along the coast of Florida, Georgia, and South Carolina and left over 150,000 customers without power in the region.
Debbie is currently downgraded to a tropical storm and is making its way up the east coast and is forecasted to bring rain and wind up to the northeast later this week.
2024’s hurricane season is expected to continue to be active. This has a great influence on energy demand and supply, especially in The Gulf of Mexico.
Natural Gas Supply
A major hurricane in the Gulf of Mexico poses major threats and disruption concerns for natural gas production and distribution. Many natural gas production facilities are located in the Gulf of Mexico in coastal areas.
Price Volatility
Disruption to power plants, offshore facilities, and manufacturers as well as evacuations all lead to reduced energy demand.
Reduced supply and fluctuating demand leads to increased price volatility in the natural gas market. If production is disrupted more than demand, prices could rise due to supply shortages. On the other hand, if demand decreases more than supply, prices usually drop.
Infrastructure Damage
Massive hurricane damage leads to longer-term effects on the natural gas market. Repairs and recovery efforts can take weeks or even months, further impacting both supply and demand dynamics.
Transportation and Storage
The United States has more than 12 billion cubic feet per day of liquefied natural gas (LNG) export capacity located on the Gulf Coast. The risks are high during hurricane season for disruption to transportation and natural storage.
Environ Energy has been at the forefront of energy management and sustainability solutions for decades, guiding clients toward advancement in energy-efficient buildings, clean energy buying, energy resilience, and regulatory compliance. With a portfolio of over $1B in energy contracts and over $100M in client savings, Environ services are delivered to some of the largest institutions and government agencies across industries including healthcare, manufacturing, data centers, food and beverage, hospitality, real estate, finance, and more.
Our team of experts are actively monitoring this year’s hurricane season and its impact on the energy market. Contact us today for strategic ways to buy, manage, report and save on energy costs.