Hurricane Delta Resulted in Ongoing Petrochemical Production Disruptions

On October 9 at 19:00 local time, Hurricane Delta made landfall as a Category 2 storm in Creole, Louisiana, disrupting regional petrochemical producers. The storm made landfall 13 miles away from the location where Hurricane Laura made landfall on August 27. This further complicated the recovery process for local producers, adding unanticipated setbacks. Reports of property damage are likely to exceed USD 1 billion and are primarily concentrated in the area near the Texas-Louisiana border, spanning from Lafayette to Lake Charles, Louisiana where peak wind gusts of 101 miles per hour were recorded. Sections of Louisiana, Texas, Arkansas, and Mississippi all recorded rainfall totals between 6 to 12 inches, with a record of 17.57 inches of rainfall recorded in Calcasieu Parish, Louisiana.

Most notably, disruptions to power infrastructure as a result of Hurricane Delta have exceeded those from Hurricane Laura. A total of 850,000 customers were estimated to have lost power at some point, with the majority of outages recorded in Louisiana. At the time of publication, a total of 267,000 customers are known to remain without power in Louisiana, along with 47,000 in Texas and 22,000 in Mississippi.

As a result of these conditions, the Resilience360 Risk Intelligence team has recorded a total of 14 chemical and petroleum plants, in addition to 1 pipeline, that were or continue to be impacted (see Figure 1 attached). Several of the plants that are still recovering from damages as a result of Hurricane Laura (inducing multiple ongoing Force Majeure declarations) were hit directly by Hurricane Delta 43 days later, likely contributing to their delayed recovery schedules. These companies include Indorama Ventures, Chevron Phillips Chemical, Lotte Chemical, and Lyondellbassel. At this stage, no reports of severe damage have been reported at any major manufacturing facility.

Due to the record-setting intensification observed by Hurricane Delta before landfall in the United States, oil producers broadly enacted precautionary shutdowns and evacuated staff where necessary. In total, 92 percent of overall crude oil production and 62 percent of natural gas output in the Gulf of Mexico were taken offline. Offshore, oil producers shut off the most output capacity on record in the last 15 years. A total of 279 offshore facilities were evacuated and 15 drilling rigs were relocated away from the path of the storm. Offshore oil fields in the Gulf of Mexico produce approximately 15 percent of U.S. crude output and 5 percent of U.S. natural gas output.

Fortunately, most oil and natural gas operations were not permanently damaged by the storm, and logistics infrastructure was quickly restored, enabling production to resume.

Major port and rail operators also took steps to protect people and assets in anticipation of the storm. At this stage, the most critical outstanding impact on logistics are draft restrictions on the Calcasieu Waterway in Louisiana, preventing transit by LNG tankers. Additional infrastructural impact are listed in Figure 2.

In Louisiana, multiple tractor-trailer crashes due to dangerous driving conditions were reported on Interstate 10 on October 9, resulting in significant roadway disruption. Due to flooding and downed trees, widespread road closures were reported in the immediate aftermath of the storm in the Parishes of Vermilion, Cameron, Calcasieu Iberia, Lafayette, St. Martin, St. Mary, and St. Landry. In Lilburn, Georgia, 38 cars of a CSX freight train derailed and several caught fire on October 11 in an accident that was attributed to heavy rains from Hurricane Delta, triggering a local evacuation.

“Overall, impacts from Hurricane Delta are now subsiding,” said Corey Brincks, risk intelligence analyst, Resilience360. “Supply chain managers should continue to monitor the recovery on the Sabine-Neches waterway if necessary, in addition to ongoing power outages that may be disrupting local supplier operations. In retrospect, Hurricane Delta may in fact be remembered as an exemplary weather event in which local manufacturers took extra precautions to minimize impact.”