U.S. oil and natural gas production stands a greater chance of experiencing disruption if a hurricane makes landfall during the 2013 Atlantic hurricane season, the U.S. Energy Information Administration (EIA) reported Friday.
The number of storms that have disrupted U.S. Gulf of Mexico oil and Gulf Coast natural gas production has declined in recent years as production has shifted to new regional inland U.S. basins, which are generally less affected by storms, EIA reported.
The National Oceanic and Atmospheric Administration's (NOAA) Climate Prediction Center estimates that a 70 percent chance exists of 13 to 20 named storms forming in the Atlantic Basin in the 2013 hurricane season, which starts June 1. Seven to 11 of those storms may strengthen to hurricanes, with three to six of those becoming Category 3, 4 and 5 hurricanes with winds greater than 111 miles per hour.
In 1997, 26 percent of the United States' natural gas was produced in the U.S. Gulf; last year, 6 percent of U.S. natural gas production came from the region. The U.S. Gulf's share of crude oil production also decreased from 26 percent in 2007 to 2011 to 19 percent in 2012, EIA noted.
EIA pointed out that Hurricanes Gustav and Ike, which both made landfall on the Gulf Coast in 2008, caused considerable damage to oil and gas infrastructure, resulting in an average 1.1 million barrels per day of oil production being shut-in and 5.5 billion cubic feet day (Bcf/d) of shut-in gas in September 2008.
Hurricane Isaac, a Category 1 hurricane that made landfall Aug. 28, 2012, caused 1.3 million barrels of oil per day (bopd) l production and 3 Bcf/d of gas production to be shut-in that day. Additionally, .9 million barrels of petroleum refinery capacity and 1.5 million barrels of petroleum pipeline capacity were temporarily shut down per day, as was over 10 Bcf/d of shut-in gas processing plant capacity.
The chance of a storm making landfall in the United States rises sharply when the Accumulated Cyclone Energy (ACE) index exceeds 165 percent of its 1981-2010 median value. NOAA estimates a 70 percent chance exists for the ACE range to be 120 percent to 205 percent of this median.
The surge in shale oil and gas exploration activity in the United States has changed the U.S. production profile to one in which unconventional oil and gas production comprises a greater share of overall U.S. production.
U.S. gas production has reached a record high thanks to shale activity, and by 2040, nearly 80 percent of North America gas supplies will be produced from U.S. shale plays, Exxon Mobil Corp. reported in March. Unconventional oil production from plays such as the Bakken and Eagle Ford has reversed the decades-long trend of relatively flat U.S. oil production. Unconventional oil production in North America is expected to rise through 2040, while conventional production is expected to continue declining.