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How Will Hurricane Michael Affect Oil Operations in the Gulf?

Though this hurricane will likely only hit the oil industry with a glancing blow, the industry won't always be able to weather the storm.
An oil platform in the Gulf of Mexico.

An oil platform in the Gulf of Mexico.

Hurricane Michael is expected to slam into Florida's panhandle on Wednesday afternoon as a Category 3 storm, which would make it the strongest storm to hit the mainland United States so far this year. But first, the hurricane will cut across the Gulf of Mexico—where almost a fifth of U.S. offshore crude oil production takes place. Nearly half of the nation's refining capacity sits along the Gulf coast.

Oil and gas operators in the region began bracing for the storm on Monday, evacuating workers from platforms in the storm's path across the Gulf. At least 10 platforms were evacuated, according to the Bureau of Safety and Environmental Enforcement, and five rigs were moved out harm's way. The evacuated platforms account for more than 19 percent of oil production in the Gulf, and roughly 11 percent of gas production.

By Tuesday, it was clear that the first storm to enter the Gulf this year would skip over its refinery-rich central and western coasts—a comfort to both the industry and coastal communities who remember all too well the damage wrought by Hurricane Harvey last year. The storm shut down 25 percent of the Gulf's oil production and 22 percent of the U.S.'s refining capacity, and damage from the storm led to the release of more than a million pounds of dangerous pollutants into the environment.

Industry officials and regulators have long known that oil infrastructure along the coasts would be vulnerable to climate change's effects, including more frequent and severe flooding, storms, and erosion. But offshore infrastructure is just as vulnerable to sea-level rise and more severe storms. In 2005, when Hurricanes Katrina and Rita tore across the Gulf as Category 5 storms with winds of up to 175 miles per hour and gusts as high as 235 miles per hour, 115 platforms were destroyed and dozens more damaged. Nine months later, federal offshore oil production was still down by 22 percent.

Hurricane Michael is currently a Category 2 storm, with sustained winds of 100 miles per hour, though it's expected to strengthen as it churns across the warm waters of the Gulf. But it's waves, not wind, that can do the most damage to offshore platforms. After the 2005 hurricane season, the American Petroleum Institute increased the height of platforms from the sea surface—from 70 feet to more than 90—to account for storm surges. Storms of this magnitude can produce waves up to 50 feet high, and a National Oceanic and Atmospheric Administration buoy in the Gulf measured 22-foot waves as of midday Tuesday.

Hurricane Michael will be the first major storm to hit the Florida Panhandle in more than a decade, and its effects will likely be felt as far north as New Jersey. President Donald Trump has approved an emergency declaration for Florida ahead of Michael's landfall, giving federal support to state and local disaster preparation and relief efforts. But offshore, the storm is unlikely to hit the oil industry with more than a glancing blow, sparing the vast majority of the Gulf's hundreds of platforms from a direct hit.

But there are still several weeks left in the Atlantic's hurricane season, and climate change is expected to bring about conditions that make storms like Michael, Harvey, and Katrina more frequent and severe. The industry is well aware of the risks: U.S. energy groups expect annual economic losses in the Gulf due to climate change to climb as high as $23 billion by 2030. At some point, the industry will no longer be able to weather the storm.