KEY POINTS
- Hurricane Francine halts energy production and crop exports in Louisiana.
- Nearly 39% of oil and 50% of natural gas production in the U.S. Gulf is offline.
- Ports and refineries in Louisiana have closed or reduced operations ahead of the storm.
Hurricane Francine caused significant disruptions to energy production and agricultural exports from the U.S. Gulf of Mexico as it approached Louisiana’s coast. Ports in the region, including major oil hubs, have been shut down, while oil refineries in Louisiana reduced operations ahead of the storm’s expected landfall on Wednesday.
The Louisiana Offshore Oil Port (LOOP), the only U.S. deepwater port capable of handling very large crude carriers (VLCCs), along with other key ports, was closed to vessel traffic. Refineries have also taken precautions, with Exxon Mobil’s Baton Rouge refinery cutting output to 20% of its capacity.
Energy and agriculture disruptions
Energy production in the U.S. Gulf was significantly impacted, with nearly 39% of oil and 50% of natural gas production going offline as Francine intensified. A total of 171 offshore production platforms and three rigs were evacuated, resulting in a loss of about 675,000 barrels of oil and 907 million cubic feet of natural gas per day.
The shutdown of ports and refineries has also impacted agricultural exports, with ports handling fuel, soybean, and grain shipments closed. Cotton crops in the region are particularly vulnerable to Francine’s rain and winds as their bolls are opening, which could result in significant crop damage, according to agricultural officials.
Mike Steenhoek, executive director of the Soy Transportation Coalition, said that barge companies are halting operations until the storm clears. This has disrupted shipments from the Mississippi Gulf region, responsible for approximately 55% of U.S. soy exports.
Hurricane Francine’s strength and path
Francine strengthened into a Category 2 hurricane with maximum sustained winds of 100 mph as it neared southern Louisiana. According to a report by Reuters, the U.S. National Hurricane Center warned that the storm would bring heavy rainfall and possible flooding to southeastern Louisiana, Mississippi, and parts of Alabama and Florida.
Oil production in the Gulf could be impacted for up to two weeks depending on the extent of damage caused by the hurricane, according to analysts at East Daley Analytics. However, liquefied natural gas (LNG) plants in the Gulf region are expected to be spared as the storm track is farther east.
Emergency preparations and response
Louisiana Governor Jeff Landry and U.S. President Joe Biden have both declared a state of emergency for Louisiana in response to the storm. Coastal communities are preparing for the potential damage as the hurricane’s eyewall nears landfall. Texas ports that had closed earlier this week, such as Brownsville and Orange, are now beginning to reopen, while others, including Houston and Freeport, have lifted navigation restrictions.
Farmers in the Gulf Coast region and the Mississippi Delta are preparing for the storm by harvesting crops, particularly rice and soybeans, where possible. However, much of the cotton crop remains exposed, leaving it vulnerable to significant damage from rain and wind.
