Economic aftermath of Hurricane Harvey

Hurricane Harvey landed in Texas with a vengeance. News outlets are littered with photos that document the tragic flooding and dangerous conditions. While rescue efforts are already underway, the situation on the ground out in Texas is much more complicated than it appears. Hurricane Harvey is coming back around for a second pass which will leave much of the state crippled. As of Tuesday 8/29, Hurricane Harvey has dropped over 49 inches of rain on Houston and the worst is far from over. Local dams have started overflowing and today an alert was issued to South Houston to evacuate due to the failure of a levee.

Some already know that the state of Texas is known for it’s legendary BBQ and lax gun laws. However, Texas is also one of the states that produces crude oil and gasoline. While we haven’t started to see the effect of Hurricane Harvey in gasoline prices, experts predict it shouldn’t be long before price rise. Lets think about the consequences that come with the disruption of the oil supply. East Texas Oil Refineries have shut down for the time being due to immediate safety concerns. One Expert on CNBC estimates that this accounts for about 25% of the production in Texas. Shares of Carrizo Oil and Gas were down almost 6.5% for the day. The commissioner of the Texas Railroad Commission, that oversees all energy production in the state states “ Once you shut in a well, they don’t immediately come back online, It could take weeks for production to bounce back and refining capacity to ramp back up “.

However, It’s not all lost. Despite Hurricane Harvey being one of the most devastating storms to ever hit the area, there is a silver lining. According to The NY Times, economist state that the region should recover fairly quickly and we may even see growth from the rebuilding efforts to come.  There’s no official word on how much damage the hurricane has brought, but conservative estimates put the total damage at 40 billion. There’s a long road ahead to rebuild Houston, but there’s no doubt that the city will come back stronger than ever. What comes to mind when we think of Texans, is their resilient and overcome all attitude.