Energy Economics Institute 'Global Energy Market Insights'
"Worst Natural Disasters in History Impact Energy Industry"
[Asia Economy Reporter Kim Bo-kyung] Natural disasters such as wildfires and hurricanes occurring consecutively in the United States have been found to have a significant impact on the energy industry.
According to the 'Global Energy Market Insights' published by the Korea Energy Economics Institute on the 28th, 23 tropical storms and hurricanes have occurred in the Atlantic this year. Among them, eight, including hurricanes 'Laura' and 'Sally,' have already swept through the southern coast of the United States, causing damage, and recently the 23rd tropical storm 'Beta' made landfall on the coast of Texas.
This year is expected to be recorded as the year the United States experienced the most tropical storms and hurricanes in 104 years.
In the Gulf of Mexico, hit hard by Hurricane Laura, disruptions in crude oil production facilities and refining facilities caused a shutdown of more than 1.5 million b/d (barrels per day), accounting for 85% of total crude oil production, and refining facilities with a capacity of 2.3 million b/d ceased operations.
In particular, power outages occurred in areas supplied by the energy company Entergy, leading to the suspension of operations at some refining facilities and LNG export terminals.
In preparation for Hurricane Sally, personnel were evacuated from 149 oil production platforms along the U.S. Gulf of Mexico coast. Among these, 37 platforms had not yet resumed staffing when another hurricane was forecast, causing some platforms to begin evacuation again from the 18th.
As of the 18th, offshore production in the U.S. Gulf of Mexico was halted for 397,000 b/d of oil and 435 MMcf/d of gas, accounting for 21.44% and 16.05% of the total, respectively.
The wildfires spreading in California, Oregon, and Washington states are the largest ever recorded. As of the 17th, the area affected by wildfires exceeded 5 million acres, releasing 110 million tons of carbon dioxide.
More than 2 billion dollars have been invested in wildfire suppression, and damages caused by the fires are expected to reach 50 billion dollars.
PG&E, which supplies power to northern and central California, announced that it would implement preventive power outages in some areas of northern California starting at 9 p.m. on the 7th to reduce the risk of fire outbreaks.
Preventive power outages are conducted based on forecasts of strong winds, gusts, and dry atmospheric conditions that could cause large fires. In California, they were introduced after major fires occurred in 2017-2018 for public safety.
The preventive outages affect approximately 172,000 customers across 22 counties, and power will be supplied to key facilities such as medical institutions using temporary generators and islanding operation.
The Korea Energy Economics Institute stated, "PG&E is introducing technology to limit the scale of outages and enhancing capabilities to detect climate threats in order to reduce the number of outages conducted for safety reasons."
Recently, other western regions including Oregon are also concerned about the possibility of large fires triggered by power infrastructure, similar to California.
The Korea Energy Economics Institute reported, "Power companies in Oregon have strengthened measures to reduce fire risk, such as proactively cutting power during strong winds and gusts," and "Last month, the Oregon Public Utility Commission (OPUC) began evaluating these power companies' plans to establish them as state guidelines."
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