The Impact that Hurricane Ike
had on natural gas and electricity (power) demand in the Houston or southeast Texas vicinity. As of Friday 9/19/08
Conclusions and Highlights:
- About 2.9 Bcf/d of natural gas demand is estimated to have been lost in the aftermath of Hurricane Ike.
- Over 1.9 million electric customers are without power, accounting still for about 1 Bcf/d in lost gas demand.
- About 68% of refining and chemical capacity in Texas is reported to be down totaling about 1.7 Bcf/d in lost gas demand.
- All but one of the Louisiana refineries are running or in process of restarting operations.
- ERCOT reports 30 generating units, totaling about 2,500 MW, are unavailable due to the transmission problems.
Demand Loss Analysis:
The largest impact on gas demand as a result of Hurricane Ike is in the industrial sector, which under normal conditions at this time of the year consumes about 3.8 Bcf/d of gas. However, gas demand in the power sector also has been significantly impacted. More than 1.9 million customers currently are without power. Under normal mid-September conditions, gas consumption in Texas’s electric generation sector totals more than 4.0 Bcf/d. The residential sector represents less than 0.2 Bcf/d on average during the month of September.
Industrial Sector Gas Demand:
The chemical and refining sectors are the most gas-intensive sectors in Texas, accounting for about 1.9 Bcf/d and 0.6 Bcf/d, respectively. The other industries account for the balance of the 3.8 Bcf/d. About 80% of the chemical and refining capacity is located in Southeast Texas.
Since most of the operating refining capacity (estimated at 68%), is down, we estimate that about 0.4 Bcf/d of gas demand is lost.
Many chemical plants are attached directly to the refineries or are in close proximity to them. Therefore, we estimate that an equal portion of chemical plants will be impacted by Hurricane Ike. The net demand loss due to chemical plants in Texas is about 1.3 Bcf/d.
Other industrial users, which are in general less energy intensive, account for about 0.2 Bcf/d of demand, bringing the total demand destruction in the industrial sector to about 1.9 Bcf/d.
Demand Destruction in the Electric or Power Generation Sector: According to the Department of Energy (DOE), there are about 11 million electric customers in Texas, of which about 1.9 million or about 18% are without power. According to ERCOT, 11 plants with 30 generating units accounting for 2,500 MW of generation are unavailable. All of the nuclear generation is running and it is not clear how much coal generation is out of service, so we are estimating that most of the out-of-service generation is fueled by natural gas. The load shed due to Hurricane Ike is about twice the capacity lost. Therefore, the outages do not cause concern at this time. Accounting for the total demand loss and estimating how much of it is from natural gas generation, we believe that the total impact on demand from the power sector due to the Hurricane Ike is about 1 Bcf/d.
Note: As of Monday the refineries in the table below were shut down.
