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Gulf hurricanes are notoriously devastating, carrying floods, storms and economic fallout deep into the interior of the continental United States, to say nothing of the coastal and island communities that they impact. But how much disruption do these hurricanes cause to oil production and energy supplies?
Watch the above video as Straight Arrow News contributor Peter Zeihan seeks to answer that question, and explores how U.S. oil and energy supplies might be impacted in the wake of a major hurricane.
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The following is an excerpt from Peter’s Sept. 17 “Zeihan on Geopolitics” newsletter:
The most recent hurricane that tore through the Gulf of Mexico has sent ripples through the insurance industry thanks to all the property damage, but what will its impact on the energy sector look like?
The U.S. has become a net exporter of refined products, moving over 4 million barrels per day. The shale revolution made this achievement possible, and in the process, helped to move most energy production onshore. So, when Hurricane Francine ripped through the Gulf, its impact on the energy sector was minimal.
Offshore production in the Gulf of Mexico only accounts for about 5% of U.S. production. To minimize the impact even further, shale producers can easily compensate for any temporary loss in offshore output. Shale is king, and offshore production just isn’t really needed… but at least future generations can tap into the Gulf reserves should they need it.
