Houston oil and gas companies caught a break from Tropical Storm Nicholas this week, but are still grappling with damage from Hurricane Ida.
In the Gulf of Mexico, nearly 30% of oil production and 40% of gas production are still offline weeks after Ida made landfall, according to the U.S. Department of the Interior.
While other hurricanes brought more lasting damage, Ida鈥檚 impact in unprecedented in the short term, according to Aaron Brady, vice president of Energy Oil Market Services at firm IHS Markit.
"If you look at the cumulative impact on outages, it's actually the biggest impact to production over this amount of time that we鈥檝e ever seen," Brady said. "If you look at Katrina and Rita in 2005, that had a bigger impact over time because that knocked out production for months and months, whereas (with Ida), I don鈥檛 think it's going to be that long lasting."
Before Ida hit Louisiana as a Category 4 hurricane on Aug. 29, companies along the Gulf Coast shut down more than 90% of production. All workers were evacuated from offshore rigs ahead of the storm.
Nicholas 鈥� which briefly reached Category 1 hurricane status 鈥� was a different story. Nicholas made landfall on Sept. 14, mostly putting Ida recovery efforts on hold, but not adding to the damage.
Meanwhile, it could still be weeks before some facilities restart operations after suffering wind damage from Ida. The Interior Department鈥檚 Bureau of Safety and Environmental Enforcement that inspections were underway.
鈥淥nce all standard checks have been completed, production from undamaged facilities will be brought back online immediately,鈥� the bureau wrote. 鈥淔acilities sustaining damage (from Ida) may take longer to bring back online.鈥�
More than 17 million barrels of oil have been lost to the market due to Hurricane Ida, and overall U.S. production could drop by as much as 30 million barrels this year, . When first Katrina and then Rita swept through the region in 2005, more than 160 million barrels were lost over three months.
However, some experts believe any impacts from Nicholas and recovery from Ida are unlikely to cause any big supply disturbances.
鈥淔ortunately, in terms of the global market, it鈥檚 not that big of an issue right now,鈥� said University of Houston Energy Fellow Ed Hirs. 鈥淧rimarily, of course, due to the COVID pandemic and softer demand across the world.鈥�
The pair of storms are unlikely to impact prices too much, Hirs said, but natural gas did get a small bump that could last through the end of the year.
"We鈥檙e seeing natural gas prices above $5 right now, and that鈥檚 primarily because we鈥檝e temporarily lost 5% of U.S. production and we鈥檙e trying to make up storage," Hirs said. "We鈥檙e a little behind in storage as we go into winter after a hot summer, and a cold winter before that."
But hurricane season is not over, and while Ida and Nicholas largely skipped over Houston, Hirs said the real concern is a hurricane that brings a major storm surge.
A has been released by the Army Corps of Engineers, but is still more than a decade away from reality. It's likely that another hurricane will hit before then.
鈥淎 15 to 20 foot storm surge coming up the Houston ship channel 鈥� that would damage the petrochemical plants and oil refineries for many months,鈥� Hirs said. 鈥淭hat鈥檚 our tremendous risk here.鈥�