As Hurricanes Florence and Michael devastated the Gulf Coast and the Carolinas this past hurricane season, residents braced themselves for fuel shortages and high prices at the pump.
Much to their relief, fuel supplies remained plentiful and prices held stable -- all thanks to the energy industry's years-long effort to revamp its hurricane preparedness systems. Thanks to lots of advanced planning, American energy companies were able to help consumers weather the storms.
Hurricanes Florence and Michael were two of the most powerful storms to hit the U.S. mainland in decades. They caused roughly $80 billion in damage.
Hurricanes of that magnitude often interfere with energy production, especially when they strike Gulf Coast states, which account for over 50 percent of U.S. refining capacity, 18 percent of oil production, and 5 percent of natural gas production, according to the Energy Information Administration. The Gulf Coast provides East Coast gas stations about half of their gasoline and Midwest refineries about a quarter of their crude oil. Storm damage to either refineries or pipelines compromises this supply, ultimately driving up prices at the pump.
Take last year's hurricane season. Gas prices soared all along the East Coast both before and after Hurricane Irma. Two weeks after Irma, gas prices in Florida reached a three-year high. And after Hurricane Harvey tore through Texas, gas prices increased in 46 states.
Past storms had even worse effects on the energy market. Hurricane Katrina spiked gas prices by 40 cents in cities across the country. Gas stations in states from North Carolina to Wisconsin ran out of fuel.
None of that happened this year, even though both storms sparked mass evacuations and Michael halted full 40 percent of oil production in the Gulf. National gas prices held steady at $2.85 per gallon after Florence. And average gas prices in Florida prices actually fell by two cents in the days following Hurricane Michael.
How did the energy industry stave off price hikes?
First, oil and natural gas companies recognized the importance of preparation. Following Harvey, industry leaders revamped their plans for disaster-related shutdowns, regional reallocation of fuel supply, and worker safety.
In the days leading up to an expected storm, energy companies carefully evaluate conditions to determine whether and when evacuations are necessary and how long operations should be suspended. Industry leaders cited their experience with Harvey as critical to keeping supply stable after future hurricanes.
Educating consumers ahead of the storm also matters. Energy companies now distribute information to residents about how the energy supply chain operates, what they can expect from a severe weather event, and what they should do when the storm hits.
Companies also ask consumers to conserve energy before an expected Gulf storm and to maintain their normal gasoline-buying habits. Such warnings help deter panicked consumers from stockpiling energy resources, thereby causing supply shortages.
Second, the energy industry has geographically diversified its production. The share of crude oil production coming from the Gulf fell 11 percentage points between 2003 and 2014. And between 1997 and 2014, the Gulf's share of U.S. natural gas output fell over 20 percentage points. Thanks to underground natural gas pipelines that quickly transport fuel across the country, consumers experience fewer storm-related energy disruptions.
Along with rough winds and heavy rain, every hurricane season brings lessons to American consumers and businesses. Thankfully, the energy industry acted on last year's lessons.
Michelle Ray is Publishing Editor at the Independent Journal-Review and the host of "In Deep with Michelle Ray" on FTR Radio.
