Hurricane Harvey Energy Crisis Could Be Nightmare For U.S. Economy- by Ellen R. Wald

On Tuesday, August 29, over 26 inches of rain fell in Port Arthur, Texas. The 50,000 residents of that city, north and east of Houston, are suffering severe flooding and personal loss. Port Arthur is also the home of the largest refinery in the United States, Motiva, which has been shut down due to massive flooding. In addition, the nearby Valero Energy VLO -0.45% and ExxonMobil XOM +0.30% refineries were shut and the Colonial Pipeline (distributing refined products across the Southeast and north to Tennessee) has been disrupted. About 22% of U.S. refining capacity is offline due to the natural disaster. All told, it now appears that the impact Harvey will have on the energy industry is worse than expected and could very well, in a worst case scenario, lead to a serious macro-economic problem.

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