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Bloomberg’s update in the wake of the week-long Deer Park oil processing plant fire (now extinguished) and chemical spill holds nothing back, but underscores the seriousness of the situation after both city and Intercontinental Terminals Co. (ITC) previously sought to reassure residents days ago that “everything’s fine”.

Instead, as Bloomberg’s aptly titled headline reads, “Cloud of Cancer-Causing Chemical Hangs Over the Houston Channel” — this as hundreds of area residents have sought medical help for illnesses ranging from nausea to headaches to irritation and burning in the skin, eyes, nose and throat.Prior photo showing a black plume that had stretched for 20 miles from the petrochemical fire at the Intercontinental Terminals Company, Monday, March 18, 2019, in Deer Park, Texas. via AP

For many days running the nation was captivated by dramatic images of flames and smoke plumes hovering above the Houston area from the Deer Park petrochemical fire, which had initially triggered an emergency shelter-in-place order from city authorities when it began last Sunday March 17; and while firefighters had extinguished the raging inferno on Thursday, multiple chemical tanks reignited again late Friday, complicating efforts to clean up a massive chemical spill into the nearby Houston Ship Channel.

With the fire now extinguished, Houston and Harris County area residents, especially those closest to Deer Park, are now concerned over dangerous levels of exposure to the chemical tanks which had burned for days: benzene, xylene, naphtha, toluene, and pyrolysis gasoline, known as Pygas, along with other oil processing related chemicals.

According to prior local reports:

Officials said the components are in gas blend stocks used in the production of finished gasoline and base oil used for machine lubrication.
NAPHTHA can cause irritation to eyes and the respiratory system. It affects the central nervous system and is harmful and even fatal if it is swallowed.

…click on the above link to read the rest of the article…

On Repairing/Rebuilding 100,000+ Damaged Houses

September 10, 2017

On Repairing/Rebuilding 100,000+ Damaged Houses

Almost lost in all the dollar estimates of property damage is the human loss, suffering and stress.

I am not an expert in repairing flood damage, or in dealing with insurance companies, FEMA or all the other pieces that will go into homeowners getting the funding needed to repair or rebuild their homes.

But I do know a bit about construction after 44 years in the field, and I have been soberly reflecting on the many hurdles that face everyone involved in restoring / repairing tens of thousands of homes, more or less all at the same time.

Preliminary estimates set the number of flood-damaged homes in Houston at around 100,000. More recent estimates put the number at around 40,000.

No one yet knows how many homes in Florida have been damaged by Hurricane Irma, but the number will undoubtedly be a big one.

Here are some semi-random thoughts on the challenges of repairing/rebuilding so many dwellings in as short a period of time as possible:

1. The average cost of homes in Houston is reportedly around $300,000. Many coastal areas in Florida are similarly valued. Just as a guess, many of the affected homeowners probably have mortgages in the $200,000 range.

It’s been reported that only 1 in 6 in the affected areas of Houston have flood insurance, suggesting 85% of those whose homes were rendered unlivable will need to borrow money to fund the repairs.

It seems federal agencies offer homeowners loans for this purpose, or access to what is effectively a second mortgage.

If the repaired home will be worth $300,000–questionable, perhaps, for those houses which have been repeatedly flooded by lesser storms–then how much money will homeowners be willing to borrow to keep the home?

…click on the above link to read the rest of the article…

Perturbations Anon

September 4, 2017

Perturbations Anon

Happy Labor Day everybody. Forward from here, things get jiggy. The nation faces a pile-up of events as we turn the corner on summer and head into the spook-house of autumn.

This will be the week when the reeking after-effects of Harvey’s journey through Houston become super-vivid. It’s going to be hot-hot-hot there all week, perfect conditions for mold to creep through untold square-footage of soggy sheetrock and plenty of nutriment in the toxic gumbo of lingering standing water for mosquitoes and bacteria to breed like crazy. Bigger surprises will be waiting for some:

HOUSTON (CNN) — A Texas homeowner returned to his flood-marred home Friday in the aftermath of Hurricane Harvey to a shocking surprise: a 10-foot gator in his living room. Brian Foster made the discovery while assessing how badly the water had damaged his house near Lake Houston, north of Houston….

The news media are already calling Harvey the costliest storm in US history, with estimates running to $180 billion. But damage assessments are incomplete for highways, surface roads, bridges, railroad tracks, water and sewer systems, public buildings, dams (Addicks and Barker), natural gas terminals, and port facilities, not to mention homes and business structures. Texas is the nation’s number one cotton producer and the storm blew away many temporary cotton bale storage modules following a bumper harvest. Corn, soybeans, and cattle were also affected.

The Colonial Pipeline’s hookups to the refineries west of Lake Charles, Louisiana, won’t reopen fully until Tuesday at the earliest. The pipeline conveys 40 percent of the gasoline consumed from Atlanta to Washington, D.C. and extends up to the New York metro area. By next weekend Hurricane Irma looks like she’ll be slamming into the US Atlantic coast somewhere between Jacksonville and the Carolina Outer Banks as a category 3 or 4 event. There’s even talk today of possible cat 5. Will there be enough gasoline on hand for the folks at risk to evacuate? Stand by on that.

…click on the above link to read the rest of the article…

Arkema Texas Plant Explodes Causing “Massive” Fire, “Black Smoke Fills The Air”

September 1, 2017

Arkema Texas Plant Explodes Causing “Massive” Fire, “Black Smoke Fills The Air”

You can’t say they didn’t warn us: this afternoon, the VP of US manufacturing Daryl Roberts at French chemicals giant Arkema, said the company was on “high alert” as more fires could start at the doomed facility at any moment. Well, that moment took place around 6pm ET, when ABC Houston reported that the doomed Arkema plant has exploded, causing a “massive” fire and “sending dark, black smoke into the air.”

The smoke could be seen in the residential Newport area of Crosby, about 7 miles away. Harris County officials are advising residents who did not evacuate the 1.5-mile area around the plant to close their windows and turn off their air conditioning systems.

“You could call this a warning sign that more explosions or fires could
be coming soon,” Jeff Carr, a spokesman for Arkema, told the Houston
Chronicle.

Hazardous materials crews are headed to the scene.

Moreno said no change was made to the evacuation zone.

This is the second of nine trailers at the plant that has caught fire. The trailers each contain liquid organic peroxides, which needs to be cooled to a certain temperature, otherwise it will explode. Officials said that three of the nine trailers have lost power, according to KPRC.

…click on the above link to read the rest of the article…

A Hot Mess

September 1, 2017

A Hot Mess

It wasn’t until more than a week after Hurricane Katrina slammed into New Orleans in 2005 that the full extent of the damage was recognized and so it will go with the hot mess where Houston used to be. Mostly, it is inconceivable that the business activity which made Houston the nation’s fourth largest city and, according to Chris Martenson, equal to the 10^th largest economy in the world, will ever return to what it was before August 26, 2017.

The major activity there has been the refining and distribution of oil products, and no activity is more central to the functioning of the US economy. So the public and our currently clueless leaders across the political spectrum, plus a legacy news media lost in the carnival of race and gender freak shows, is about to discover the dynamic relationship between energy and an industrial economy.

The pivot in this relationship is banking, which enables the conversion of oil’s raw power into everything else that goes on in a so-called advanced economy. The popular assumption is that federal disaster relief can compensate for all losses. That assumption may go out the window with the Houston flood of 2017. And no amount of federal aid can compensate for the hours, days, and weeks that will tick by as businesses struggle to return to something like their former level of normal operation.

Many businesses will never recover, especially the smaller ones that support the big one — the little tool and die shops, the construction outfits, the trucking and shipping concerns, the riggers and pipefitters, the cement companies, and so on. All of that activity existed in highly rationalized chains of on-time production and service and nothing will be on-time in Houston for a long time to come.

…click on the above link to read the rest of the article…

Hurricane Harvey Aftermath: 100,000 Homes Destroyed, A Million Vehicles Ruined And Bottled Water Being Sold For $99 A Case

September 1, 2017

Hurricane Harvey Aftermath: 100,000 Homes Destroyed, A Million Vehicles Ruined And Bottled Water Being Sold For $99 A Case

It is now being estimated that the total amount of economic damage caused by Hurricane Harvey will be somewhere in the neighborhood of 190 billion dollars. It is a disaster unlike anything that we have ever seen before in all of U.S. history, and federal officials are already admitting that they are literally going to be dealing with the aftermath of this storm for “years”. At this point, more than 100,000 homes have been destroyed, “up to one million vehicles” have been ruined, and many retailers have already been caught engaging in extreme price gouging. But this could be just the beginning, because this storm has already rendered many areas along the Gulf coast “uninhabitable” for an extended period of time, and as you will see at the end of this article another hurricane may be arriving early next month.

What we just witnessed in Houston is being called “a 1,000-year-flood”, and many basic necessities are now in extremely short supply. So of course it was inevitable that this would lead to price gouging, and this is reportedly even happening at some of the largest retail chains. For example, at one Best Buy store cases of bottled water were being sold for 42 dollars…

On Friday, a Twitter user shared a picture of cases of bottled water being sold at a Best Buy in Houston. One of the cases was being sold for $42 when it normally retailed for about $15.

A Best Buy spokesman later apologized, saying it was a ‘big mistake’.

But that water was quite cheap compared to prices in other parts of the city. According to CNN, one convenience store in Houston was actually charging 20 dollars for a single gallon of gasoline and 99 dollars for a case of bottled water…

…click on the above link to read the rest of the article…

Arkema Releases List Of Toxic Chemicals Stored At Doomed Texas Plant, Warns “More Fires” Imminent

September 1, 2017

Arkema Releases List Of Toxic Chemicals Stored At Doomed Texas Plant, Warns “More Fires” Imminent

One day after two explosions rocked its flooded plant in Crosby, Texas, French chemicals giant Arkema said it was on “high alert” as more fires could start at the doomed facility at any moment, according to VP of US manufacturing Daryl Roberts who spoke to reporters on Friday morning. In a separate statement, that company said that “we continue to monitor the temperature in the remaining trailers and there is evidence suggesting that other trailers will soon burn, but there have been no reports of any fires or smoke.”

Residents in the vicinity of the Crosby plant, and not only, have grown especially worried about the chemicals contained in the plant, which until recently was only known for holding various forms of organic peroxides. While Arkema executive Richard Rennard said in a press conference Thursday morning that the plant was emitting “noxious” smoke, he would not respond to a question as to whether the smoke from the burning substances was toxic. Incidentally, the following clip shows what happens to the substance if not cooled properly.

…click on the above link to read the rest of the article…

Harvey Causing “Unprecedented” Disruptions To Supplies Of “Essential” Chemicals

September 1, 2017

Harvey Causing “Unprecedented” Disruptions To Supplies Of “Essential” Chemicals

The unprecedented destruction wrought by Hurricane Harvey will impact the US economy in ways may not be immediately apparent. Until recently, coverage of the storm’s impact has focused on property damage and the impact on the energy industry. But in a story published Friday, Bloomberg explains the devastating impact the storm has had on Texas’s chemicals industry, which is already causing supply-chain headaches for American manufacturers who’re struggling to source the chemicals required to produce plastics and other components used in everything from milk jugs to car parts.

Indeed, if Texas’s chemicals plants are closed for an extended period, production at a potentially huge number of American manufacturers to grind to a halt.

More than 60% of the US’s production capacity for ethylene – one of the most important chemical building blocks for American manufacturers – has been taken offline by the storm, a development that could ripple across the US manufacturing industry.

“Texas alone produces nearly three quarters of the country’s supply of one of the most basic chemical building blocks. Ethylene is the foundation for making plastics essential to U.S. consumer and industrial goods, feeding into car parts used by Detroit and diapers sold by Wal-Mart Stores Inc.

With Harvey’s floods shutting down almost all the state’s plants, 61 percent of U.S. ethylene capacity has been closed, according to PetroChemWire.”

Ethylene, the gas given off by fruit as it ripens, occurs naturally, but it’s also a crucial product of the $3.5 trillion global chemical industry, with factories pumping out 146 million tons last year. Processing plants turn the chemical into polyethylene, the world’s most common plastic, which is used in garbage bags and food packaging. When transformed into ethylene glycol, it’s the antifreeze that keeps engines and airplane wings from freezing in winter.

…click on the above link to read the rest of the article…

Hurricane Harvey Looters Targeting Fuel Tanks As Google Searches For “How To Siphon Gas” Soar

September 1, 2017

Hurricane Harvey Looters Targeting Fuel Tanks As Google Searches For “How To Siphon Gas” Soar

Texas resident Joe Roan woke up to a rather unpleasant surprise yesterday morning as he discovered the remnants of a would-be thief attempting to steal gasoline from his Jeep Wrangler tank. Unfortunately, as a local CBS affiliate pointed out last night, with refinery outages resulting in growing gasoline shortages, this is becoming a rather common occurrence for Texas residents.

Joe Roan didn’t witness the crime, but he found the evidence in his driveway.

“I came outside this morning and found this water hose was sticking out,” he said, holding the hose a thief left hanging out of his Jeep’s tank.

On the ground sat a gas tank.

“Instantly I knew someone was trying to steal my gas,” he said. “Maybe a car drove by when they were doing it and they ran? I don’t know.”

Roan said the thief didn’t even manage to get any fuel.

Meanwhile, Google searches for “how to siphon gas” have soared as criminals have been forced to hone their skills before taking to the streets.

Siphon

Of course, the rampant onset of gasoline thieves is the result of fuel shortages which are often exacerbated by the pure panic of people trying to keep their tanks topped off. As we’ve reported several times in recent days, long lines at gas stations have become a common sight from the Texas shores up to Dallas.

Meanwhile, one seasoned energy trader warned this is “only just beginning” as the hangover from Hurricane Harvey flows downstream toretail gas prices…

…click on the above link to read the rest of the article…

Scientist Confirms: Harvey Caused A “1-In-1,000-Year Flood”

September 1, 2017

Scientist Confirms: Harvey Caused A “1-In-1,000-Year Flood”

Scientists have confirmed what one renowned weather forecaster has suspected for days: Hurricane Harvey was a “1-in-1,000-year flood.”

That’s according to researchers at the University of Wisconsin’s Space Science and Engineering Center, who claim there is nothing in the historical record that rivals the devastation resulting from the flooding in southwest Texas, which has forced more than 30,000 Texans into temporary shelters.

“There is nothing in the historical record that rivals this, according to Shane Hubbard, the Wisconsin researcher who made and mapped this calculation. “In looking at many of these events [in the United States], I’ve never seen anything of this magnitude or size,” he said. “This is something that hasn’t happened in our modern era of observations.”

Of course, one reason for this might be that the modern urban environment is covered in concrete and asphalt, which makes it impossible for floodwater to absorb into the ground, exacerbating the disaster.

Hubbard’s calculations, which he shared with the Washington Post, only accentuate the massive scale of the flooding.

To that, we’d like to add the nearly 52 inches of rain recorded by the National Weather Service in Cedar Bayou, Texas, which broke the continental U.S. record.

Making matters worse, the National Hurricane Center (NHC) has just updated its forecast for what it is now referring to as a “rapidly intensifying” Category 2 hurricane in the Eastern Atlantic Ocean. Some models see the storm making landfall in Florida, while others see it landing somewhere in the Gulf of Mexico, meaning that another powerful storm could ravage Texas just two weeks after Hurricane Harvey, leaving locals little time to recover.

Harvey Hangover Hits Pump Prices, Jet Fuel Premium Highest Since 2008

September 1, 2017

Harvey Hangover Hits Pump Prices, Jet Fuel Premium Highest Since 2008

“It’s only just beginning,” warned one seasoned veteran energy trader as the hangover from Hurricane Harvey flows downstream to retail gas prices and jet fuel premiums.

As Bloomberg notes, Harvey impact currently includes:

Colonial says it’ll commingle Rbob and conventional gasoline
Explorer Pipeline planning to start lines Saturday, Sunday
Logjam grows to 29 oil tankers as 11 ports remain closed
Total Port Arthur is said facing extended shutdown on power loss
Texas storm bucks N.Y. traders with wild gasoline expiry swings
NHC issues final advisory on Harvey; losing tropical character

Which has left retail gas prices at the pump are now at their highest in 2 years…

And judging by their usual lagged response to RBOB, are set to go dramaticaly higher in the next few weeks…

And while inventories are high, deliveries are slow and fears of shortages have created lines at many Texas gas stations…

“This is going to be a substantial ouch for consumers,” said Tom Kloza, global head of energy analysis for Oil Price Information Service. “Satan could not have drawn up a more horrible geographic scenario for knocking out Texas refining.”

But it is Jet Fuel premiums that are even more worrisome…

New York jet fuel’s premium to Nymex futures rises 20.5c to 36c/gal., widest since 2008, data compiled by Bloomberg show.

And U.S. Gulf jet fuel premium widens 10.25c to 19c/gal., also widest since 2008…

And unlike Gasoline – where inventories are high – Jet fuel inventories are below average.

The latest EIA data implies jet fuel inventory levels are just over 23 days of forward cover, seasonally-adjusted, 8% below the five-year average. Flooding and crude oil supply disruptions have led to the temporary closing of more than 21% of the country’s refining capacity, primarily in the Gulf Coast, contributing to further draws on jet fuel inventories.

…click on the above link to read the rest of the article…

Hurricane Harvey Is A Disaster For OPEC

September 1, 2017

Hurricane Harvey Is A Disaster For OPEC

The skies are clearing over Houston, but the damage from the remaining elements of Hurricane Harvey has spread east to Port Arthur and Lake Charles along the Texas-Louisiana border. That has knocked more refineries offline, including the largest refinery in the United States.

In the aftermath of the storm, the most serious threat to the energy industry is the extended outage of refineries and pipelines, according to Goldman Sachs. The problem actually looks worse than it did earlier this week as the deluge has shifted towards Port Arthur, another refining hub. Motiva, which runs the U.S.’ largest refinery in Port Arthur, began to completely shut down its 600,000 bpd facility on Wednesday.

Goldman says the refinery shut downs, as of August 30, have spiked to 3.9 million barrels per day (mb/d), although upstream oil production outages have dropped below 1 mb/d. More ports are now closed – in addition to Corpus Christi and Houston, the ports of Lake Charles, Beaumont, and Port Arthur have shut down.

These outages, the investment bank says, will mean that the “ongoing recovery in production will only be partial.” The refinery and pipeline closures are “leaving the oil market long 1.9 mb/d of crude vs. last Thursday, short 1.1 mb/d for gasoline and 0.8 mb/d for distillate.” Related: Venezuela’s “Oil Fire Sale” To Benefit Russia, China

More worrying is that the recovery might not be quick. While most refineries had controlled shut downs, there are quite a few, especially in the Port Arthur region, that have been inundated with water, which means that the damage to them is still unknown. Based on the past major hurricanes of Rita and Katrina, Goldman speculates that about 10 percent of the 4 mb/d of refining capacity that has been disrupted will remain offline for several months.

…click on the above link to read the rest of the article…

How Long Can U.S. Refineries Remain Offline?

August 31, 2017

How Long Can U.S. Refineries Remain Offline?

When Hurricane Harvey blew into Texas last weekend, it dumped more than 30 inches of rain, flooding Houston and large areas of southeastern Texas, while leaving thousands homeless or without power. The worst storm to hit the U.S. since 2004 and by some estimates the largest rain-storm in U.S. history, Harvey has had a profound impact on the nation’s largest oil-producing and oil-refining region.

Refinery shutdowns, pipeline closures and other consequences of Harvey has sent the Gulf oil industry into a tailspin while throwing oil markets into disarray. The question facing industry analysts, investors and consumes is how long this chaos will last.

The storm forced several major Gulf refineries to shut their doors and limit operation. ExxonMobil and Total shut down facilities in the Port Arthur and Beaumont areas, while Valero, Marathon and Citgo were forced to reduce operations in refineries from Corpus Christi to Galveston Bay and Texas City.

Motiva, owned by Saudi Aramco, is the largest refinery in the U.S. with a total throughput of overly 600,000 bpd. It was forced to close at 5 a.m. on Wednesday August 30, having already reduced capacity by forty percent on Tuesday. Related: Can Mexico Capitalize On This Golden Oil Opportunity?

In total, some twenty percent of U.S. refinery capacity was affected by the storm. On Tuesday Platts reported that eighteen percent of capacity, or 3.36 million bpd, had been shut-down, while vessel traffic to coastal facilities in Corpus Christi had largely ceased. Another ten percent of capacity remains threatened as the storm moves East.

The shut-downs have sent gasoline prices soaring, offering lucrative opportunities to European refiners and depressed crude, which continues to struggle with over-supply and is now limited by the sudden loss of refinery capacity in the Gulf.

…click on the above link to read the rest of the article…

Harvey Victims Face Toxic Pollution as Hurricane Recovery Begins

August 31, 2017

HARVEY VICTIMS FACE TOXIC POLLUTION AS HURRICANE RECOVERY BEGINS

TEXAS COMMUNITIES THAT have long experienced health problems from nearby oil refineries and chemical plants are now facing the fossil fuel industry’s longer-term impacts: storms made more severe by climate change and the painful recovery process that follows their landfall — a recovery made far worse by industrial contamination.

A number of low-income communities that sit on the fence-lines of the Gulf Coast petrochemical industry have been hit particularly hard by Hurricane Harvey. On Thursday morning, Hilton Kelley stood at a makeshift first responders headquarters in Port Arthur, Texas, directing out-of-state rescue professionals to parts of his neighborhood where he knew people were probably still trapped. A curfew put in place from 10 p.m. to 6 a.m. was just ending and the streets were eery and barren, with a few alarms going off in nearby buildings. Kelley’s home had filled with a foot and a half of water, and his wife and granddaughter had taken shelter at his soul food restaurant, Kelley’s Kitchen.

“What I saw is really not uncommon to us here that live on the fence-line of these facilities — what I saw was some major flaring at the Motiva refinery and the Flint Hills chemical plant, with black smoke coming off the tips of the flare,” Kelley said. The pungent odor irritated the sinuses and made his eyes squint.

Residents of the mostly black community in Port Arthur have an outsizedcancer mortality rate, and Kelley has fought for years to convince area plants like the Motiva refinery — the largest in the U.S. — to reduce carcinogenic emissions.

PORT ARTHUR, TX - AUGUST 30: Evacuees sit in the auditorium of the Woodrow Wilson Middle School after they were evacuated from the flooding of Hurricane Harvey on August 30, 2017 in Port Arthur, Texas. The evacuees said they were waiting for instructions on where they will sleep for the night as well as when they might be fed. Harvey, which made landfall north of Corpus Christi late Friday evening, is expected to dump upwards to 40 inches of rain in Texas over the next couple of days. (Photo by Joe Raedle/Getty Images)

Port Arthur residents sit in the auditorium of the Woodrow Wilson Middle School after they were evacuated from the flooding of Hurricane Harvey on Aug. 30, 2017. Photo: Joe Raedle/Getty Images

…click on the above link to read the rest of the article…

US Releases 500,000 Barrels Of Oil From Strategic Reserve As Largest US Refinery May Be Shut For 2 Weeks

August 31, 2017

US Releases 500,000 Barrels Of Oil From Strategic Reserve As Largest US Refinery May Be Shut For 2 Weeks

The U.S. Energy Department announced on Thursday that it would release 500,000 barrels of crude oil from the US Strategic Petroleum Reserve as a result of the disruption to the US petroleum industry following Hurricane Harvey amid fears of a surge in motor fuel prices, which have been compounded by the previously reported shuttering of the Colonial pipeline. According to the DOE statement, the oil will be delivered to the Phillips 66 refinery in Lake Charles, Louisiana, a plant which has not been affected by the storm.

According to Reuters, the release – the first emergency release from the reserve since 2012 – will include 200,000 barrels of sweet crude and 300,000 barrels of sour crude oil. It was an exchange agreement, meaning the government will loan crude to Phillips 66, which is required to replace the reserve’s oil at a later date.

The Energy Department “will continue to provide assistance as deemed necessary, and will continue to review incoming requests for SPR crude oil,” spokeswoman Jess Szymanski said.

The reserve, a legacy from the 1970s Arab oil embargo which caused panic over fuel supply, currently contains 679 million barrels of oil. It is a small release of crude for a country that uses nearly 20 million barrels of petroleum daily.

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…click on the above link to read the rest of the article…

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