Dismukes: Hurricane Laura’s impact on petrochemical industry likely to be minor

(Image by NASA)

Though it’s too early to determine the extent of the damage Hurricane Laura wreaked on the southwest Louisiana communities where it made landfall, the state’s petrochemical industry is well-prepared to weather massive storms and likely will emerge relatively unscathed, says David Dismukes, executive director at LSU Center for Energy Studies.

In Lake Charles, which bore the brunt of the storm, Sasol’s LNG facility was developed years after 2005’s Hurricane Rita, the last major hurricane to rip through the area, and is designed to withstand major hurricanes, Dismukes says.

One of the bigger challenges to the LNG sector will be the impact on the ship channel at Hackberry in Cameron Parish, where the hurricane came ashore overnight. Depending on the extent of the damage the channel sustained, it could create logistical challenges getting ships in and out.

The impact on the workforce is also expected to be significant, as potentially thousands of employees in the area could be displaced for weeks or months.

But major petrochemical companies have contingency plans for these disasters, including workforce housing, Dismukes says.

The fact that global demand for LNG products is low, due to the pandemic, will also likely lessen the negative impact of any supply disruption caused by the storm.

“The fact that this is happening when the industry is soft tells me there won’t be too much long-term impact,” he says. “And it will be a good way to test the resiliency of these plants.”

Dismukes is also optimistic the storm will not have too much impact on oil and gas exploration and production in the Gulf. Because of its track, Laura largely bypassed a batch of deep water rigs closer to the mouth of the river, leaving those largely unscathed.

Yet to be determined is the extent of damage to another batch of rigs that sit farther west in the Gulf off Cameron Parish, over which the hurricane directly passed.

“We’ll have to see what the extent of damage is to those offshore structures to know how long they’ll be offline,” he says. “It took a while after Katrina and Rita. But it shouldn’t impact global supplies very much. The Gulf is a major producer but because of the pandemic, there’s still plenty of supply right now.”